2 lakhs primary agri credit societies to come up in 5 years

Context: Union Home minister Amit Shah inaugurated 10,000 newly established
Multipurpose Primary Agricultural Credit Societies (MPACS), along with Dairy
and Fisheries Cooperative Societies. NABARD will establish 22,750 PACS in the
first phase and 47,250 in the second. Similarly, the National Dairy Development
Board (NDDB) will establish 56,500 new societies while strengthening 46,500
existing ones, and the National Fisheries Development Board (NFDB) will create
6,000 new fisheries cooperative societies and empowering the existing 5,500
ones and an additional 25,000 PACS will be contributed by the state cooperative
departments. Till date, 11,695 new PACS have been registered, most of these new
PACS have been established in Odisha, Uttar Pradesh, Rajasthan, Jammu &
Kashmir, Andhra Pradesh and Maharashtra.

Key points

·       Overview: Recently
Government of India approved a plan to establish two lacks new multipurpose
Primary Agricultural Credit Societies (PACS) /dairy/fishery primary cooperative
societies for covering all the remaining Panchayats/ villages in the country.

·       Primary
Agricultural Credit Societies (PACS): PACS is an association of
borrowers and non-borrowers residing in a particular locality. The funds of the
society are derived from the share capital and deposits of members and loans
from a central cooperative bank. The first PACS was established in 1904.

·       Regulations: PACS are
registered under the Co-operative Societies Act which means they are regulated
by the State government (specifically administrative aspects) and regulated by
the RBI. NABARD is a nodal refinancing agency for PACS including other
cooperative banks. They are governed by the “Banking regulation Act-1949” and
Banking Laws (Co-operative societies) Act 1965.

·       Cooperatives: International
Labour Organization (ILO) defines a cooperative as a group of people or
organizations who work together to achieve their common economic, social, and
cultural goals and objectives through a democratically governed
company/enterprise.

Ø  Cooperatives In
India: Constitutional Provisions - The Constitution (97th Amendment) Act of 2011
created a new Part IXB (Cooperatives) following Part IXA (Municipalities)
regarding cooperatives in India. In Part III of the Constitution, Article
19(1)(c), the word "cooperatives" was added after "unions and
associations” which enabled citizens the right to form cooperative societies as
their Fundamental Right. The Act protected cooperatives by inserting Article 43
B and Part IX B related to them.

Ø  Features - It is a
non-capitalist association of people. It is a business, not a charitable
organization. Members not only share the profit, but they also share the risk. It
is a non-profit organization with democratic management.

·       Objectives
of PACS: To raise the capital to meet the demands of its members. To collect the
deposits from its members. They also supply agricultural inputs and other
services (in the form of money or in-kind) to their members. They can also
provide a storage facility to produce its members.

·       Significance
of PACS: PACS accounts for 41% of all KCC loans provided by all entities in the
country. PACS is the main source of credit for rural marginal farmers because
95% of beneficiaries of PACS are small and marginal farmers.