The Centre on Wednesday decided to computerize all functional 63,000 Primary Agriculture Credit Societies (PACS) over the next five years with a budget outlay of nearly Rs. 2,510 crores to improve efficiency, transparency, and transparency accountability in their operations.
The scheme, approved by the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi, will also facilitate PACS to diversify their business and undertake multiple activities and services.
Most PACS are not computerized and are still functioning manually, resulting in inefficiency and trust deficit in these societies.
Hailing the CCEA decision, Cooperation Minister Amit Shah said the government is committed to bringing reforms in the cooperative sector.
Shah said the computerization of PACS will prove to be a “boon” for the sector and thanked the prime minister for this visionary decision.
Announcing the Cabinet decision, Information and Broadcasting Minister Anurag Singh Thakur said the scheme proposes computerizing about 63,000 functional PACS over five years with a total budget outlay of nearly Rs. 2,510 crores, with the Centre’s share of almost Rs 1,520 crore.
He said this is a landmark decision and a big reform in this sector, adding that the initiative will benefit 13 crore farmers, mostly small and marginal.
Under the scheme, cloud-based common software with cybersecurity and data storage will be put in place for PACS. This software will be in vernacular languages having the flexibility of customization as per the needs of states. It will also provide hardware support to the PACS and ddigitizeexisting records.
According to an official statement, PACS constitutes the lowest tier of the country’s three-tier Short Term Cooperative Credit (STCC) structure, comprising about 13 crore farmers as its members, which is crucial for developing the rural economy.
The other two tiers — State Cooperative Banks (StCBs) and District Central Cooperative Banks (DCCBs) — have already been automated by NABARD and brought on Common Banking Software (CBS).
However, the government said most PACS has not been computerized and still functioning manually, resulting in inefficiency and a trust deficit. In some of the states, standalone and partial computerization of PACS has been done.
There is no uniformity in the software they use, and they are not interconnected with DCCBs and StCBs.
PACS accounts for 41 percent (3.01 crore farmers) of the KCC loans given by all entities in the country, and 95 percent of these KCC loans (2.95 crore farmers) through PACS are to the small and marginal farmers.
The scheme to computerize all PACS will bring them on a common platform at the national level and have a Common Accounting System (CAS) for their day-to-day business.
The computerization of PACS, besides serving the purpose of financial inclusion and strengthening service delivery to farmers, especially small and marginal farmers, will also become a nodal service delivery point for various services and provision of inputs like fertilizers and seeds.
The scheme will help improve the outreach of the PACS as outlets for banking and non-banking activities, besides enhancing digitalization in rural areas.
“DCCBs can then enroll themselves as one of the important options for taking up various government schemes (where credit and subsidy are involved), which can be implemented through PACS.
“It will ensure speedy disposal of loans, lower transition cost, faster audit and reduction in imbalances in payments and accounting with State Cooperative Banks and District Central Cooperative Banks,” the statement said.
Project Management Units (PMUs) will be set up at the central and state levels.
District-level support will also be provided at a cluster of about 200 PACS.
In states where PACS has completed computerization, Rs. 50,000 per PACS will be reimbursed provided they agree to integrate with/adopt the common software; their hardware meets the required specifications. The software was commissioned after February 1, 2017, the statement said.
Welcoming the decision, cooperative IFFCO Managing Director U S Awasthi, in a separate statement, said the computerization of PACS will help the last mile connect farmers to the economy of the country.
