Union Home Minister Amit Shah, who is also Cooperation Minister, on Friday advocated extending the network of Primary Agricultural Credit Societies (PACS) to each panchayat in a bid to increase l finance at Rs 10 lakh crore per year through cooperatives.
“Our target should be the disbursement of agricultural credit of Rs 10 lakh crore through the PACS. However, from ’92 to ’22, there was a decline in agricultural credit through the PACS. It is a matter of concern for all of us that the financing of agriculture through cooperatives is on the decline,” he told a National Rural Cooperative Banks conference in the nation’s capital.
With around 13 million members and 75,000 of the 95,000 PACS functioning well, these provide agricultural credit to farmers worth around Rs 2 lakh crore. Noting that there are nearly three lakh panchayats in the country, Shah pointed out that two lakh of them have no record of PACS. The Narendra Modi government’s target, he reiterated, was to increase the number of PACS to three lakh from the current 95,000 and credit disbursement from Rs 2 lakh crore to Rs 10 lakh crore.
To do this, the Ministry of Cooperation, which was separated from the Ministry of Agriculture by Prime Minister Narendra Modi last July, has already published model statutes on its website and asked for suggestions from all stakeholders. , mainly the states, since agriculture is a state subject, district and state rural banks, among others. Shah called on all rural bank presidents present at the conclave to reflect on these statutes and write to the ministry with their suggestions as the government aims to finalize the new model statutes in a fortnight.
Stressing the importance of credit companies for primary agriculture, Shah said these have a “human”, not “ruthless” approach to financing farmers. The country’s farmer needs a human approach to accessing credit, which only PACS can achieve, he said. “The PACS are the soul of our agricultural credit system. Until the PACS work well, the agricultural credit financing system will always be insufficient,” Shah stressed.
In a move that could change the face of grassroots agricultural finance, Shah revealed that it is proposed that rural cooperative banks can also finance medium and long-term loans through PACS. Currently, long-term and medium-term loans are funded directly and only short-term loans are funded through PACS. “If it’s done through the PACS, then the farmer doesn’t have to mortgage his land. The Pacs will have the farmer’s documents; our effort is to link the 3,00,000 PACS to district and state rural banks, under the supervision of NABARD,” the minister said.
However, it would not be enough to add numbers to the existing PACS without making them viable and for that deep reforms are necessary, he declared. “The first task of the district cooperative banks is to prepare a five-year plan for PACS in each panchayat. State cooperative banks should monitor the viability of this plan and NABARD, through its various departments, endorses it. The Government of India will support them through its various programs,” said the Minister of Cooperation, adding, “And therefore, the first decision that the government has taken is to computerize the PACS and consolidate the banks. district and state cooperatives on common software. ”
The government believes that computerization would automatically ensure the upgrading of human resources, financial prudence and better auditing of PACS. “Computerization is the cure for a hundred evils and it will succeed if only the managers of the neighborhood cooperative funds bring it to the base. Many have actually put an end to computerization. There is a need to have the country’s agricultural credit system on common software,” Shah stressed. The government has set aside Rs 2,500 crore for computerization.
Second, Shah said professionalism must be instilled in those who run the PACS. Insisting on the need to perpetuate the PACS, the Minister for Cooperation indicated that after the new statutes, the PACS will not be limited solely to the financing of agricultural activities. When three lakh PACS are formed, they must be made viable, he said. Twenty-two new economic activities authorized in the new standard statutes proposed for the PACS include gas distribution, water distribution, PCOs, FPOs and storage of agricultural products.
Reflecting on the 120-year-old history of the cooperative movement, Shah said there have been many achievements but there have also been many losses and this requires “introspection”. “I believe it is the best opportunity for the cooperative movement when Modiji is Prime Minister, because Modi ji has a vision that only through cooperatives can the financial sector reach the last man in society, through which the economy of the country and the last individual grows,” he said, emphasizing the urgency of the project.
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