8 January 2026·PIB

Ministry of Finance Year Ender 2025: Department of Expenditure

In this note

1. At a Glance

The Department of Expenditure (DoE) is the nodal department of the Ministry of Finance overseeing public financial management, central government expenditure, Finance Commission devolutions, pay/pension policy, and procurement rules [1].
The 2025 Year Ender highlights DoE's role in DBT via PFMS, capex push to states, GFR/procurement reforms, 8th Central Pay Commission, and 16th Finance Commission processes [1][2].
UPSC relevance: GS-II (governance, transparency) and GS-III (fiscal policy, budgeting, federal finance).

PIB Year Ender released on 8 January 2026 summarising DoE's FY 2025-26 achievements [1].
8th Central Pay Commission Terms of Reference approved by Cabinet in 2025; effect expected from 01.01.2026 [2].
16th Finance Commission (chaired by Dr. Arvind Panagariya) required to submit report by 31 October 2025 for the award period commencing 1 April 2026 [2].

DoE is one of the five departments of the Ministry of Finance; oversees General Financial Rules (GFR), Delegation of Financial Powers Rules, pay/pension, and the Controller General of Accounts (CGA) [1].
PFMS evolved from CPSMS (2009) into the backbone of DBT payments; integrated with Aadhaar-based payment bridges [1].
Scheme for Special Assistance to States for Capital Expenditure launched in 2020-21 with ₹12,000 cr; scaled massively over five years [3].
15th Finance Commission award covers 2021-22 to 2025-26; 16th FC constituted in 2023 under Dr. Arvind Panagariya [2].

Parent Ministry: Ministry of Finance; Department: Expenditure [1].
DBT schemes covered under PFMS in 2025-26: 966 schemes [1].
PFMS transactions in FY 2025-26: 210.56 crore transactions [1].
DBT amount disbursed FY 2025-26 (till 31 Dec 2025): ₹2.87 lakh crore [1][3].
DBT Open House launched 10.01.2024 to allow beneficiaries to raise grievances directly to PFMS [3].
CRM system handles >1,50,000 grievances annually across PFMS/CGA/DoE [3].
Special Assistance to States for Capex: outlay raised from ₹12,000 cr (2020-21) to ₹1,50,000 cr (2025-26) [3].
Central Government Capex (BE FY 2025-26): ₹11.21 lakh crore [2].
8th Central Pay Commission: Cabinet-approved ToR; recommendations effective from 01.01.2026 [2].
16th Finance Commission: Chair Arvind Panagariya; report due 31 Oct 2025; award period 1 Apr 2026 – 31 Mar 2031 [2].
DoE manuals: Manual for Procurement of Goods (2017), Consultancy/Services (2017), Works (2019) [4].

Economic / Fiscal

₹11.21 lakh crore capex in FY 2025-26 sustains the growth-via-capex strategy of the Union Budget [2].
DBT via PFMS reduces leakages, plugs ghost beneficiaries — cumulative savings highlighted across welfare schemes [1].

Administrative / Governance

PFMS provides real-time fund transfer and reconciliation across 966 schemes — embodies the Digital India vision [1].
DBT Open House and CRM operationalize citizen-centric grievance redress [3].

Federal / Constitutional

Article 280 mandates Finance Commission; 16th FC's recommendations will shape vertical and horizontal devolution from 2026-31 [2].
Special Assistance to States for Capex is a 50-year interest-free loan — strengthens cooperative fiscal federalism [3].

Legal / Procedural

GFR and DoE's three procurement manuals govern public procurement; recent revisions cover cartel mitigation, reverse auctions, rate contracts, L1 withdrawal [4].

08 Jan 2026: PIB Year Ender release on DoE [1].
2025: Cabinet approves 8th Central Pay Commission ToR [2].
FY 2025-26: Capex outlay for Special Assistance to States raised to ₹1,50,000 crore [3].
10 Jan 2024: DBT Open House initiative launched [3].
31 Oct 2025: Deadline for 16th Finance Commission report submission [2].

DBT under PFMS covered 966 schemes in 2025-26 [1].
PFMS recorded 210.56 crore transactions in FY 2025-26 [1].
₹2.87 lakh crore transferred via DBT in FY 2025-26 (till Dec 2025) [1].
Central Capex BE for FY 2025-26 is ₹11.21 lakh crore [2].
Special Assistance to States for Capex outlay = ₹1.50 lakh crore (2025-26) vs ₹12,000 cr (2020-21) [3].
16th Finance Commission Chair: Dr. Arvind Panagariya [2].
16th FC award period: 1 April 2026 to 31 March 2031 [2].
8th Central Pay Commission effect date: 1 January 2026 [2].
DBT Open House launched on 10 January 2024 [3].
DoE procurement manuals: 2017 (Goods), 2017 (Consultancy), 2019 (Works) [4].
PFMS is the nodal financial management system enabling DBT — operated by DoE under MoF [1].
Finance Commission constituted under Article 280 of the Constitution.

GS-II: Government policies and interventions; transparency and accountability; e-governance (DBT, PFMS).
GS-III: Indian economy — Government Budgeting; mobilisation of resources; fiscal federalism.
Possible stems:
"Discuss how PFMS has transformed Direct Benefit Transfer in India. (250 words)"
"Examine the role of capital expenditure-linked special assistance to states in cooperative fiscal federalism."
"Critically evaluate the institutional framework for public procurement in India in light of GFR reforms."

16th Finance Commission ToR — direct linkage to vertical/horizontal devolution.
FRBM Act, 2003 — fiscal deficit framework DoE monitors.
CGA & Indian Civil Accounts Service — DoE's accounting arm.
GeM (Government e-Marketplace) — procurement platform linked to GFR.
PM-Gati Shakti & National Infrastructure Pipeline — capex absorption channels.
JAM Trinity — backbone enabling PFMS-DBT plumbing.
Centrally Sponsored Schemes rationalisation — DoE-led appraisal exercise.
8th Central Pay Commission — pay/pension fiscal implications.

PFMS ≠ DBT: PFMS is the platform; DBT is the mode of transfer. Both administered by DoE (not DFS).
Finance Commission is under Article 280, NOT Article 270 (which deals with tax distribution).
Special Assistance to States for Capex is a 50-year interest-free loan, not a grant; distinct from FC grants.
CGA is under DoE, not Department of Economic Affairs.
8th CPC ToR ≠ implementation date; recommendations are expected from 01.01.2026, not automatically effective.