Centre to computerise 63,000 Primary Agricultural Credit Societies (PACS) with an outlay of Rs2516 Cr

Centre to computerise 63,000 Primary Agricultural Credit Societies (PACS) with an outlay of Rs2516 Cr
PACS account for 41 per cent of the KCC loans given by all entities and 95 per cent of these KCC loans are given to the small and marginal farmers

The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi has approved the computerisation of Primary Agricultural Credit Societies (PACS) with the objective of increasing the efficiency of PACS, bringing transparency and accountability in their operations; facilitating PACS to diversify their business and undertake multiple activities and services. This project proposes the computerisation of about 63,000 functional PACS over a period of five years with a total budget outlay of Rs. 2,516 crore with Government of India’s share of Rs.1528 crore.

What are Primary Agricultural Cooperative Credit Societies (PACS)?

According to the Government of India, 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 approximately 13 crore farmers as its members, which is crucial for the development of the rural economy. PACS account for 41 per cent (3.01 Cr. farmers) of the KCC (Kisan Credit Cards) loans given by all entities in the country and 95 per cent of these KCC loans (2.95 Cr. farmers) through PACS are given 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).

However, the 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 the DCCBs and StCBs.

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The 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 a nodal service delivery point for various services and provision of inputs like fertilisers and seeds. 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, faster audit and reduction in imbalances in payments and accounting with the state, a government statement said today.

The project comprises of development of cloud-based common software with cyber security and data storage, providing hardware support to the PACS, and digitisation of existing records including maintenance support and training. This software will be in vernacular language having the flexibility of customisation as per the needs of the states. 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 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 February 1, 2017.

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