Over the past few decades, Governments have made tremendous progress in digitizing PFM Systems. However, there is a need to take a fresh look based on the new ideas and technologies in the PFM domain. We believe that there is a scope for applying some of these digital tools and principles to resolve the challenges in public finance in general and public expenditure in particular.
Using some of these PFM principles and relevant technology tools, MSC has created the ‘PFM Readiness Index’. The index will help decision-makers gauge the maturity of the PFM ecosystem and chart a course for reforming PFM systems, with a focus on public expenditure. The index can also act as a leading indicator to address the plumbing problems in the systems across various levels in Government.

The PFM Readiness Index rates a government system on parameters aligned to four principles: Just-in-time funding, Single source of data, Observability and De-monopolizing access to public funds and services. The rank received by a government agency on a PFM Index will provide a clearer pathway to improved accountability, lower administrative burden, and frictionless expenditure.