Cabinet approves Computerization of Primary Agriculture Credit Societies (PACS)

New Delhi [India], June 29 : The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved computerization of Primary Agricultural Credit Societies (PACS) to increase their efficiency and bring transparency and greater accountability in their operations.
The move is also aimed at facilitating PACS to diversify their business and undertake multiple activities. The project proposes computerization of about 63,000 functional PACS over five years with a total budget outlay of Rs 2,516 crore and Centre's share of Rs 1,528 crore. The decision will benefit about 13 crore farmers most of which are small and marginal.
Cloud-based unified software with data storage, cyber security, hardware, digitization of existing records, maintenance and training are the main components of the initiative.
The Cabinet Committee on Economic Affairs meeting was chaired by Prime Minister Narendra Modi.
An official release said that Primary Agricultural Cooperative credit societies constitute the lowest tier of the three-tier short-term cooperative credit (STCC) in the country comprising of about 13 crore farmers as its members, which is crucial for the development of the rural economy.
PACS account for 41 per cent (3.01 crore farmers) of the KCC loans given by all entities in the country and 95 per cent of these KCC loans (2.95 crore 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).
However, the majority of PACS have so far been not computerized and still functioning manually resulting in inefficiency and trust deficit.
"In some of the states, stand-alone and partial computerization 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."
The release said that under the guidance of Minister of Home and Cooperation Amit Shah, it has been proposed to computerize all the PACS throughout the country and bring them on a common platform at the national level and have a Common Accounting System (CAS) for their day-to-day business.
Computerization of PACS, besides serving the purpose of financial inclusion and strengthening service delivery to small and medium farmers will also become nodal service delivery point for various services and provision of inputs like fertilizers 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," the release said.
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 project comprises the 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.
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 computerization of PACS has been completed, Rs. 50,000 per PACS will be reimbursed provided they agree to integrate with the common software, their hardware meets the required specifications, and the software was commissioned after February 1, 2017.