Cabinet approves computerisation of primary agriculture credit societies
04 Jul 2022
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The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi on Thursday approved computerisation of all 63,000 functional primary agricultural credit societies PACS across the country, with overall budget outlay of Rs2,516 crore.
The decision will help increase the efficiency of PACS, bringing transparency and accountability in their operations and facilitate diversification of their business by undertaking multiple activities/services.
This will benefit approximately 130 million farmers, most of whom are small and marginal farmers.
This project proposes computerization of about 63,000 functional PACS over a period of 5 years with a total budget outlay of Rs. 2516 crore with Government of India share of Rs. 1528 crore.
Primary Agricultural Cooperative credit societies (PACS) constitute the lowest tier of the three-tier Short-term cooperative credit (STCC) in the country comprising about 130 million farmers as its members, which is crucial for the development of the rural economy.
PACS account for 41 per cent (30 million farmers) of the KCC loans given by all entities in the country and 95 per cent of these KCC loans (29.5 million farmers) through PACS are to the small and marginal farmers. The other two tiers, viz, state cooperative banks (StCBs) and district central cooperative banks (DCCBs) have already been automated by NABARD and brought on common banking software (CBS).
A majority of PACS have not been computerised and still function manually resulting in inefficiency and trust deficit. In some of the states, stand-alone and partial computerisation of PACS has been done. There is no uniformity in the software being used by them and they are not interconnected with the DCCBs and StCBs. Under the able guidance of minister of home and cooperation Amit Shah it has been proposed to computerise all the PACS throughout the country and bring them on a common platform at national level and have a common accounting system (CAS) for their day-to-day business.
Computerisation of PACS, besides serving the purpose of financial inclusion and strengthening service delivery to farmers, especially small and marginal farmers (SMFs) will also become nodal service delivery point for various services and provision of inputs like fertilisers, seeds etc. The project will help in improving the outreach of the PACS as outlets for banking activities as well as non-banking activities apart from improving digitalisation in rural areas. The DCCBs can then enrol themselves as one of the important options for taking up various government schemes (where credit and subsidy is involved) which can be implemented through PACS. It will ensure speedy disposal of loans, lower transition cost, augment audit and reduction in imbalances in payments and accounting with state. Cooperative banks and district central cooperative banks.
The project comprises development of cloud based common software with cyber security and data storage, providing hardware support to the PACS, digitisation of existing records, including maintenance support and training. This software will be in vernacular language having flexibility of customisation as per the needs of the states. Project Management Units (PMUs) will be set up at central and state levels. District level support will also be provided at cluster of about 200 PACS. In the case of states where computerisation of PACS has been completed, Rs50,000 per PACS will be reimbursed provided they agree to integrate with/adopt the common software, their hardware meets the required specifications, and the software was commissioned after 1 February 2017.
