Programs in News: Govt approves computerization of 63,000 PACS

Brajesh Mohan
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Govt approves computerization of 63,000 PACS: The Centre decided to computerize all functional 63,000 Primary Agriculture Credit Societies (PACS) over the next five years with a budget outlay of Rs 2,516 crore in order to improve efficiency, transparency and accountability in their operations.

Computerization of Primary Agriculture Credit Societies (PACS)

Cabinet approves Computerization of Primary Agriculture Credit Societies (PACS)

  • 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.

The Primary Agricultural Cooperative credit societies (PACS) constitute the lowest tier of the three-tier Short-term cooperative credit (STCC) in the country comprising of approx.13 Cr. farmers as its members, which is crucial for the development of the rural economy.

  • PACS account for 41 % (3.01 Cr. farmers) of the KCC loans given by all entities in the Country and 95 % of these KCC loans (2.95 Cr. 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 the NABARD and brought on Common Banking Software (CBS).

About PACS

The project comprises of development of cloud based common software with cyber security and data storage, providing hardware support to the PACS, digitization of existing records including maintenance support and training.

Benefits of computerization

The scheme proposes computerization of about 63,000 functional PACS over a period of five years with a total budget outlay of Rs 2,516 crore, with the Centre's share of Rs 1,528 crore.

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

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 nodal service delivery point for various services and provision of inputs like fertilizers 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 digitalization in rural areas.
  • District Central Cooperative Banks (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 StCBs and DCCBs.

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 the case of states where computerization 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 February 1, 2017.
Govt approves computerization of 63,000 PACS

About PACS:

PACS are outside the purview of the Banking Regulation Act, 1949 and hence not regulated by RBI. PACS are regulated by State Government and the Registrar of Co-operative Societies appointed by the State.

  • A PACS is organized at the grass roots level of a village or a group of small villages. It is this basic unit which deals directly with the rural (agricultural) borrowers, gives them loans and collects repayments of loans given. 

PACS is the first building block of the century-old cooperative banking system of India. Each PACS was designed to be a village-level credit society into which the farmers brought in share capital, deposits and provided loans to each other. 

  • Elected members, one- member-one-vote, transparency, ground-level reach, ease of operations, speed, human connect—almost everything about the structure of a PACS makes for robust ‘public policy for credit’. 

Recently, NABARD has decided to develop 35,000 PACS into Multi Service Centres (MSCs) in mission-mode. The initiative will enable PACS to support farmers in post-harvest marketing activities and provide ancillary services to its members like creation of storage and processing facilities, custom hiring centers and collective purchase of inputs. This will also help in increasing non-fund based income of the PACS. On the sidelines, a PACS can also play a major role by integrating its warehouse with physical and financial supply chain of agro-commodities in the upcoming Gramin Agriculture Markets (GrAMs) or large warehouses in private sector.


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