The Centre for Social and Economic Progress held a seminar on “The need for an overarching PFM Law and other practical steps”, which is the third and final session in a three-part series on India’s Public Financial Management (PFM) System – Post-COVID-19 need and opportunities for reforms organised by the Centre for Social and Economic Progress (CSEP) in coordination with the World Bank. The seminar took place virtually on September 27th, 2021, 5:00 p.m. – 6:30 p.m. (17:00 – 18:30) IST.

About the series: International evidence has shown that a strong PFM system is critical for operational and allocative efficiency and sustainability of public expenditure. Indian PFM systems, across the centre and the states, have undergone sporadic, disparate, and incremental changes over a number of years. The COVID-19 pandemic has exposed the vulnerabilities of the PFM system and has forced governments to adopt rapid remedial measures such as reprogramming / reprioritising expenditures, easing procurement processes, expediting execution modalities, and arranging for liquidity with all the attendant risks. The pandemic has, thus, highlighted the need to deepen and strengthen the PFM architecture and, thereby, change the way governments manage public money.

In building the post-COVID-19 recovery, the nature of fiscal governance and the quality and direction of public spending, especially infrastructure investment, will play a key role. Across countries, and especially in India, with resources being tight, governments will need to carefully redirect spending to the productive sectors with higher multiplier effects on rebuilding inclusive growth. For this, all tiers of government will need better fiscal governance—strong institutions and frameworks to plan, allocate, implement, report, and assess the quality of public spending and public infrastructure. The fiscal challenges brought on by the pandemic have heightened the urgency to strengthen the PFM system in India.

The details and recordings of the previous seminars can be found here: Part 1 and Part 2.

About the event: To bridge the gap between the Constitution’s high-level PFM framework and the detailed guidelines, rules, regulations, and manuals, a law that provides statutory backing to PFM principles and processes is needed. Drafting such a law would also enable a review and rationalization of the existing PFM rules and make them consistent across the Centre and States. Given India’s federal structure, how can an overarching PFM law that is both uniform across governments but allows for flexibility in some cases, be drafted? Consultation with the States and other stakeholders is required for both designing such a law and determining the manner of its implementation. This webinar will explore the possible next steps towards establishing a comprehensive PFM legislation.

With this event, we are delighted to bring together the following five distinguished speakers to share their thoughts on PFM reforms:

• Manal Fouad, Chief, Public Financial Management II Division, Fiscal Affairs Department, International Monetary Fund
• S. Krishnan, Additional Chief Secretary (Finance), Government of Tamil Nadu
• Ashok Meena, Principal Secretary (Panchayati Raj & Drinking Water), Government of Odisha
• Subodh Mathur, Former Additional Controller General of Accounts, Office of Controller General of Accounts

Mohan Gopalakrishnan, Senior Financial Management Specialist, World Bank, will moderate the session. Vikram Singh Mehta, Chairman and Distinguished Fellow, CSEP, will deliver the opening remarks and Hideki Mori, India Manager (Operations), World Bank, will deliver closing remarks.

Please take a look at the agenda for more details about the series.

Please reach out to Kevin James at kjames@csep.org for general queries and Zehra Kazmi at zkazmi@csep.org for media queries.

All content reflects the individual views of the speakers. The Centre for Social and Economic Progress (CSEP) does not hold an institutional view on any subject.