The government on Wednesday approved Rs 2,516 crore for computerisation of functional 63,000 Primary Agriculture Credit Societies (PACS) aimed at promoting financial inclusion.
The decision was taken by the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi.
The computerisation programme is aimed at increasing efficiency of PACS, bringing transparency and accountability in their operations, facilitating these societies to diversify their businesses and undertake multiple activities/ services.
Addressing media after the Cabinet meeting, Information and Broadcasting Minister Anurag Singh Thakur said this project proposes computerisation of about 63,000 functional PACS over a period of 5 years with a total budget outlay of Rs 2,516 crore, with the Centre’s share of Rs 1,528 crore.
This will benefit 13 crore farmers, mostly small and marginal, he said.
Thakur said this is a landmark decision and a big reform in this sector.
The project comprises development of cloud-based common software with cyber security and data storage. It will also provide hardware support to the PACS and help in digitisation of existing records. This software will be in vernacular language 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) in the country comprising about 13 crore farmers as its members, which is crucial for the development of the rural economy.
The 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 — 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.
“Under the able guidance of Amit Shah, Minister of Home and Cooperation, it has been proposed to computerise all the PACS throughout the country and bring them on a common platform at National level and have a Common Accounting System (CAS) for their day to day business,” the statement said.
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, seeds etc.
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.
“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 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 February1, 2017, the statement said.