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Results Framework Management System - Memorandum of Understanding (RFMS-MOU)

Paper by:
Ritvik Mishra & Shreya Dutt

1. About Memorandum of Understanding (MOU)

The Memorandum of Understanding (MOU) is a negotiated document between the Government, acting as the owner of Centre Public Sector Enterprise (CPSE) and the Corporate Management of the CPSE. It contains the intentions, obligations and mutual responsibilities of the Government and the CPSE, and is directed towards strengthening CPSE management by expressing a convergence of will between the parties, indicating an intended common line of action. It seeks to address three basic questions: (a) What are Public Enterprise’s main objectives for the year? (b) What actions are proposed to achieve these objectives? and (c) How to assess the degree of progress made in implementing these actio ns? That is, what are the relevant criterion and their targets?

The beginnings of the MOU system in India can be traced to the recommendation made by the Arjun Sengupta Committee on Public Enterprises in 1984. During the initial years of MOU implementation, Government of India laid greater emphasis on the core sectors like Steel, Heavy Engineering, Coal, Power, Petroleum and Fertilizers. In the year 1987-88, a pilot run of the MOU system was carried out with four . Over the years, the number of CPSE under the ambit of the MOU has increased exponentially.

Today, over 250 CPSEs (including subsidiaries and CPSEs under construction stages) have been brought into the fold of the MOU system. During this period, considerable modifications and improvements in the structure of and procedures for preparing and finalizing the MOUs have been made. These changes have been brought about on the basis of experiences in the working of the MOU system and supported by studies carried out by experts on specific aspects of the MOU system from time to time.

The major reasons for the survival of the MOU system over the years can be attributed to the vast impact it has had on the performance of the public enterprises, for example the dramatic and relatively steady impact of the MOU system on parameters such as surplus generated for the exchequer, increase in net profit since the introduction of the MOU system.

Figure 1: Showing the impact of MOU System

2. About RFMS 

The Results Framework Management System (RFMS) is a web based system, originally designed for the online preparation of the Results Framework Document (RFD). RFD is a performance contract documenting the understanding between a Minister (GoI) representing the people’s mandate, and the Secretary (GoI) of a Department responsible for implementing this mandate. Thus, the RFMS is designed and mapped on the basis of the guidelines for drafting RFDs issued by the Performance Management Division, Cabinet Secretariat, Government of India.

Figure 2: Screenshot of RFMS login page

The RFMS is developed by the National Informatics Centre (NIC) under the guidance of the Performance Management Division, Cabinet Secretariat. As this is a web application, the only basic requirement at the user end is – (i) a computer and (ii) internet connectivity. The system is technology neutral, built on open source platforms, compatible with all browsers and has strong authentication and authorization to prevent sensitive government data from getting leaked, making it extremely safe, user friendly and convenient. Another interesting feature of RFMS is that it can be used for both evaluate and monitor. The user can feed in monthly achievement for monitoring their progress and/or compute a composite score at the end of the year to evaluate their performance. Focused on ‘Managerial Performance’, it provides a unified, and single view of Performance.

As of 2014, 80 Government Departments/Ministries along with 800 Responsibility Centers (Subordinate offices) are using this software to prepare their RFDs every year making it one of the most popularly used  software in the Indian Government today. Some of the States implementing RFD, such as Government of Assam, Kerala, Haryana, are also using the RFMS to prepare their RFDs.

3. Need for RFMS

The basic reason for the development of a web based system for the preparation of an RFD was to ensure consistency, transparency and accountability amongst users. This became even more significant with the increase in the target population using the Software. The system provides a generic platform to all the Departments, Ministries and their subordinate offices for preparing their RFDs in a common format, hence when these documents are sent to the Cabinet Secretariat for evaluation they are in the same format making the criteria for evaluation and understanding generic.


In case of MOUs, the last e-development (electronic development) which took place was preparation of the MOU using the excel format, which happened in the early-mid 90s. Since then no substantive measures have been taken to develop a generic, e-platform. Furthermore, a cursory glance at MOUs of different CPSEs revealed inconsistencies in adhering to the guidelines, etc. This was also highlighted in the Mankud Committee Report (2012) which not only states that there was a need to ensure“…uniformity in approach…minimize the element of subjectivity in the selection of options…” Hence, like RFDs, it was observed that there is a need to make MOU on Software which is generic and consistent for all the CPSEs signing MOU. The committee also noted that there is a need for “better harmony, synchronization and synergies between the two systems (MOU and RFD system), whose ultimate objectives are similar”.

Figure 3: Screenshot of RFMS MOU

Access through:

As a matter of fact when one examines and compares the MOU prepared by different CPSEs it is startling to know that though they address the three basic questions (mentioned above) but the way these questions are addressed by different CPSEs differ. For example the criteria value that can be given in an RFD for any criteria has to be either number or a date hence maintaining consistency amongst different department whereas in case of a CPSE criteria value could be things other than numbers and date. Excerpts from a signed MoU is shown as an example:

Figure 4: Showing the variation in the unit of criteria in MOUs

From the above figure one can infer that that in the absence of a proper e-system it is difficult to maintain consistency amongst MOUs of various CPSEs. Thus, keeping in view the above mentioned issues, it was decided that rather than building a new software to address the issues mentioned above, an already existing software can be molded to fit the requirements of the MOU system as well. Furthermore, with an intention to build harmony between the MOU and the RFD system as suggested by the Mankud Committee, it was decided that the RFMS system should be used to make MOU.

5. How does REMS-MOU work - Details of the steps/stages

The RFMS MOU is broadly divided into six sections. Each section corresponds to a particular section in the existing Paper based MOU. Figure 5 gives a brief description of the six sections in RFMS MOU and its corresponding segment in the paper based MOU. One major addition to the existing MOU structure is the introduction of Section 6 in RFMS-MoU. The concept of this section is borrowed from the RFD system. This section urges CPSEs to think about the Outcome/Impact of the objectives that they are working towards.

Figure 5: Comparison of 6 Sections of RFMS-MOU and Paper Based MOU

corresponding segment in the paper based MOU. One major addition to the existing MOU structure is the introduction of Section 6 in RFMS-MoU. The concept of this section is borrowed from the RFD system. This section urges CPSEs to think about the Outcome/Impact of the objectives that they are working towards.

Section 1: Vision, Mission, Function and Objectives

Section 1 of the RFMS MOU entails the Vision, Mission, Function and Objectives. Vision, in short, may be defined as ‘What’ the CPSE wants to be in the long-run and is typically generic and grand. The Mission statement is the nuts and bolts of the vision. Mission is the ‘who, how and why’ of the vision. Function is related to what the CPSE is legally required to do – usually mentioned in the ‘Memorandum of Association’. Only the core functions should be mentioned here to give the reader an idea about the organization. Objectives represent the requirements to be achieved by the CPSE in a particular sector by a selected set of policies and programmes over a specific period of time (short-medium-long). Generally, objectives are classified into two types: (a) Outcome Objectives - address ends to achieve, and (b) Process Objectives - specify the means to achieve the objectives. As far as possible, the CPSEs should focus on Outcome Objectives. This outcome-orientedness is reiterated in section 6 which has been discussed later in the paper.   

An interesting fact about the RFMS MOU, is that, it is mapped in a way that sections are interlinked. An input in a particular section has subsequent relations with the following sections. This concept mirrors the underline concept of the MOU that each section should flow from one another – the mission flows from the vision and the mission determines the objectives that the organization needs to achieve in order to complete the mission. The RFMS-MOU is also made to reflect similar inter-linkages. For example, the system requires the user to define the objectives only once in Section 1, they are automatically reflected in the subsequent section 2, 3 and 6, criteria mentioned in Section 2 will automatically reflect in Section3, 4 and 5. To explain this further, all criteria defined in Section 2 are available for selection by users in Section 5 (Dependency).

In the RFMS-MOU there are 3 kinds of objectives –

  1. Mandatory objectives – This is a new concept borrowed from the RFD system. They are objectives which are approved by the High Power Committee (HPC) on MOU and are applicable to all CPSEs. Their criterions, its weights and its targets will also be fixed by the HPC and would be common to all. In the RFMS-MOU, they appear in light-pink field.   
  1. User Defined Objectives – These are objectives that may be specific to the organization. The user can add as many objectives as they like by clicking on the “add new” button at the bottom of the page. Once they are entered in the system, they would appear in the white coloured field.  
  1. Partially Mandatory Objectives - Unlike RFMS-RFD, RFMS MOU has a set of ‘partially mandatory’ objectives which are objectives that are common to all CPSEs but their weights, criteria, etc. are defined by the user or the category if CPSE as mentioned in the Department of Public Enterprises (DPE) guidelines for MOU. For example, ‘Sound Financial Management’ is an objective that is common to all CPSEs but its weightage depends on the whether it is a loss-making (weightage = 40) or profit making (weightage = 50). The partially mandatory appear in yellow coloured fields. Figure 6 shows the list of Partially Mandatory Objectives as given in the RFMS MOU.

Figure 6: Partially mandatory objectives in RFMS-MOU and its relation to the objectives in paper based MOU

Section 2: Inter se priorities among key objectives, success indicators and targets

Section 2 is the heart of the MOU. It captures the essence of what the CPSE plans to achieve in the said year. It enlists the objectives of the CPSE, the ‘actions’ it proposes to take to achieve the said objectives, ‘criterions’ which specify how the progress would be measured and the ‘targets’. Even though in both the formats - paper based MOU and the RFMS MOU – the targets are set on a 5-point scale, the one minor difference between is that, in RFMS-MOU is on a 100 point scale. The figure below gives the 6 columns that forms this section:

Table 1: Showing the columns composting section 2

Column 1

Column 2

Column 3

Column 4

Column 5

Column 6


Weight of Objective


Success Indicator


Weight of

Success Indicator

Target / Criteria Value























Objective 1


Action 1









Action 2









Action 3




















Objective 2


Action 1









Action 2









Action 3




















Objective 3


Action 1









Action 2









Action 3









Section 3: Trend Value

Section 3 in the RFMS MoU corresponds to Annex IV in the paper based MoU. It talks about the trend values of the Criterions. For every Criteria, the software allows the CPSEs to provide data for the past 5 years, projected values for the future two years and target value for the current year. The target value for the current year is automatically taken from the Very Good column of the criteria value in section 2 (as shown in the table above). Assuming that the user is preparing the MOU for the year 2014-14, the section 3 table would appear as given below:

Table 2: Showing the composition of Section 3








FY 09/10





FY 10/11





FY 11/12





FY 12/13





FY 13/14






FY 14/15




 FY 15/16

Projected Value


 FY 16/17













Objective 1

Action 1











Action 2











Action 3























Objective 2

Action 1











Action 2











Action 3
























Often it is asked, “does this section have to be complete?”, “Can we leave some fields blank?” Yes, an user can leave the fields blank, if an action is being initiated in the current year, then no values would be listed in the previous year column. Also, in case an action is going to be completed in the current year, then no values would be listed in the next 2 years. Kindly do not copy Section 2 figures here and care should be taken that the date values are for the relevant year listed in the column.

Section 4: Description and definition of success indicators and proposed measurement methodology

Section 4 in the RFMS MoU allows the CPSEs to give detailed definitions of various criterions mentioned in Section 2 and their proposed measurement methodology. Wherever required, the rationale for using the proposed criterion can be provided by the CPSE in this section. This section also gives users an option to upload any document in support of the specific criterion.

Table 3: Showing the composition of Section 4

SI. No.





General Comments













Section 5: Dependency

Section 5 in the RFMS MOU corresponds to the Annexure 3 used in the present paper based MoU system. This section aims to elicit the dependency that a CPSE may have on any other organization. The CPSE is required to claim the dependency on other Departments/ Ministries/ Organisation along the below mentioned format:

Table 4: Showing the composition of Section 5

Location Type


Organization Type

Organization Name

Relevant Criterion

What is your requirement from this organization

Justification for this requirement

Please quantify your requirement from this Organization

What happens if your requirement is not met



















Although every government would dream that its Department/Ministries/PSUs become independent and self-reliant, but in a developing and populous country like India, it becomes difficult to accomplish certain goals without the help of other Departments/Ministries/PSUs. Hence, Section 5 of the RFMS MOU enlists the Requirements a particular CPSE can claim from other Departments/Ministries/PSUs. By choosing this option department has to enter specific performance requirements from other departments that are critical for delivering agreed results. Another interesting feature of the RFMS MOU also gives a detailed printable report of Section 5. As indicated in Figure 7, a CPSE can not only see the dependency it has claimed on other Departments/Ministries/PSUs but also the dependency claimed by other partments/Ministries/PSUs from their organization can be seen.

Figure 7: Dependency report prepared by the software

Section 6: Outcome/Impact

This section contains the broad outcomes and the expected impact the CPSE has on national welfare. It aims to capture the very purpose for which the CPSE exists. This section has been added to the MOU system for information only and to keep reminding us about not only the purpose of the existence of the CPSE but also the rationale for undertaking the MOU exercise. However, the year-end evaluation is done only against the targets mentioned in Section 2. The whole point of MOU is to ensure that the CPSE serves the purpose for which they were created in the first place.

S. No

Outcome / Impact

Jointly responsible for influencing this outcome / impact with the following organisation (s) / departments/ministry(ies)





























The above completes the explanation of the 6 sections of RFMS-MOU. As can be seen from the above, the RFMS-MOU is nothing new. It has been introduced to codify the existing MOU system and to introduce uniformity and consistency amongst the MOU practitioners.

6. Current Status of RFMS MOU

The first OM on this subject, informing CPSEs about the introduction of RFMS-MOU was issued on March 18, 2014 by DPE, Government of India. The training on RFMS-MOU has been underway since March, 2014. Since then, around 240 officials from 116 CPSEs have been trained on RFMS-MOU.  More information on the RFMS training can be found on; www.performance

Currently, the RFMS-MOU is on a trail run. DPE has instructed all CPSEs to enter the 2013-14 (already signed MOUs) on the RFMS. This exercise is aimed at basically testing the software. Thus, the users’ feedback and suggestions are most crucial at this stage.

Each person who has been trained in the RFMS has also been made a part of a virtual Community of Practice (COP) on RFMS-MOU. This COP can be accessed through the following website:  This is a very active community of practitioners of RFMS-MOU. The Community is also an innovative way to resolve issues being faced by users. Over and above the COP, helpdesk services are also being provided to all the users. The details of the helpdesk are given below:

Performance Management Division, Cabinet Secretariat.

Mr. Ritvik Mishra


Ms. Shreya Dutt


Department of Public Enterprise


Mr. Ambikesh Mishra


Mr. Ajay Chaudhary


7. Benefits of RFMS-MOU

Below the points highlight the major benefits that introduction of RFMS aims to bring about:

  • RFMS facilitates CPSEs to prepare MoU online and input achievements
  • The RFMS MoU is based on the MoU guidelines issued by Department of Public Enterprise (DPE)
  • Access to RFMS MoU is restricted to officials nominated by CPSEs and is granted through highly secured User Id /Password
  • The User Ids are mapped with the organizational details such as kind of organization (Maharatna, Miniratna, Section 25 Company, Loss Making, etc.) in a way that it reflects the parameters pertaining to an organization as set by the DPE guidelines. For example for Sick and Loss making company the weight assigned to financial parameter by DPE is 40.When a Sick and Loss making organization keys in their user id in RFMS the weight for such parameters will automatically reflect as what DPE has defined in the MoU guidelines.
  • The CPSEs can take out prints, save and send electronic copy of the MoU they have prepared. The RFMS MoU provides output in PDF as well as excel formats. The CPSE can also see and take a printed copy of the dependency they have claimed on other organizations, ministry as well as the dependency others have claimed on their organization.
  • Online Availability of previous years MoU/Achievements/Composite Scores/Trend Values to the CPSE and Department of Public Enterprise.