Government Approves Computerisation of Primary Agriculture Credit Societies for Transparency, Accountability

Majority of the PACS till today are not computerised and functioning manually, resulting in inefficiency and trust deficit in these societies.

By Press Trust of India | Updated: 30 June 2022 01:42 IST

Government Approves Computerisation of Primary Agriculture Credit Societies for Transparency, Accountability

Photo Credit: Pexels

Amit Shah said the computerisation of PACS will prove to be a "boon" for the sector

Highlights

The scheme was approved by Prime Minister Narendra Modi
The scheme proposes computerisation of about 63,000 functional PACS
The initiative will benefit 13 crore farmers, mostly small and marginal

The Centre on Wednesday decided to computerise all functional 63,000 Primary Agriculture Credit Societies (PACS) over the next five years with a budget outlay of nearly Rs. 2,510 crore in order to improve efficiency, transparency and 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.

Majority of the PACS are not computerised and are still functioning manually, resulting in inefficiency and trust deficit in these societies.

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Hailing the CCEA decision, Cooperation Minister Amit Shah said the government is committed to bring reforms in the cooperative sector.

Shah said the computerisation 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 computerisation of about 63,000 functional PACS over a period of five years with a total budget outlay of nearly Rs. 2,510 crore, with the Centre's share of nearly Rs 1,520 crore.

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This is a landmark decision and a big reform in this sector, he said, adding that the initiative will benefit 13 crore farmers, mostly small and marginal.

Under the scheme, a cloud-based common software with cybersecurity and data storage will be put in place for PACS. It will also provide hardware support to the PACS and help in digitisation of existing records. This software will be in vernacular languages having flexibility of customisation as per the needs of states.

According to an official statement, PACS constitute the lowest tier of the three-tier Short Term Cooperative Credit (STCC) structure in the country comprising about 13 crore farmers as its members, which is crucial for the development of the rural economy.

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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 majority of PACS have so far been not computerised and still functioning manually resulting in inefficiency and trust deficit. In some of the states, standalone 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 DCCBs and StCBs.

PACS account 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 computerise 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 computerisation of PACS besides serving the purpose of financial inclusion and strengthening service delivery to farmers, especially small and marginal farmers will also become nodal service delivery point for various services and provision of inputs like fertilisers and seeds.

The scheme will help in improving the outreach of the PACS as outlets for banking as well as non-banking activities apart from improving digitalisation in rural areas.

"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, 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 cluster of about 200 PACS.

In the case of states where computerisation of PACS has been completed, Rs. 50,000 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 February1, 2017, the statement said.

Welcoming the decision, cooperative IFFCO Managing Director U S Awasthi, in separate statement, said the computerisation of PACS will help last mile connect of farmers to economy of the country.

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