PACS May Be Allowed To Sell Petroleum Products, Run PDS Shops

At present, the majority of PACS have not computerised their operation and still functioning manually resulting in inefficiency and trust deficit

The Centre has proposed to allow primary agriculture credit societies (PACS) to undertake activities like dealership of petroleum products, running PDS shops, and developing hospital and educational institutions, in addition to their regular functions. In this regard, the Ministry of Cooperation has floated a draft ‘Model By-laws of PACS’ on which it has invited suggestions from the state governments and other stakeholders by July 19.

The existing framework does not allow PACS to diversify in other areas apart from their core business. The draft model by-laws propose that PACS should be allowed to work as Bank Mitras and common service centres (CSCs), provide cold storage and godown facilities, set up PDS shops besides enabling them to work in dairy, fishery, irrigation and green energy sectors.

The draft also says that PACS would be permitted to provide community-based service in the field of education, health, tourism and environmental and sustainable development activities. The objective of the Society, as per the draft, is to provide to its members timely and adequate short-term and medium-term credit for development activities related to agriculture, loan for consumption or medical purpose against collateral/pledge financing, maintaining the financial norms in the operational area.

The PACS, as per the draft, can “engage in service or business operations (like infrastructure development, community centres/ hospital or education institutions, procurement of food grains, Fair price shop, or any Govt scheme,… “Dealership/agency/Distributorship or supply of LPG/Petrol/Diesel/Green energy/ farm or household Consumables/ farm machinery, training of members for skill improvement, etc) which may enhance the facilities and income of Society or its members.”

Addressing a conference to commemorate the 100th International Day of Cooperatives on Monday, Cooperation Minister Amit Shah said the central government has floated a draft model by-laws for PACS, and has sought suggestions from state governments. PACS falls in the domain of states. He said the computerisation of PACS will bring transparency to their overall functioning, including in accounting and book-keeping. The Centre on Wednesday decided to computerise 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.

The scheme, approved by the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi, will also facilitate PACS to diversify their business and undertake multiple activities and services. At present, the majority of PACS have not computerised their operation and still functioning manually resulting in inefficiency and trust deficit.

PACS constitute the lowest tier of the three-tier short-term cooperative credit in the country comprising 13 crore farmers as its members. At present, there are 63,000 PACS in the country and the Centre has a target to set up 3 lakh PACS by 2025. Besides model bylaws for PACs, the government is working on a new cooperation policy, setting up a university and developing a database of cooperatives.