Context:
Union Minister of Home Affairs and Cooperation Amit Shah urged stakeholders in cooperative societies to support the establishment of primary agricultural credit societies (PACS) in all villages and blocks of the country.
Relevance:
GS III- Indian Economy
Dimensions of the Article:
- Summary of the recent announcements regarding cooperatives by Union Minister of Home Affairs and Cooperation
- About Primary agricultural credit societies
- Objectives of PACS
- Functions of PACS
Summary of the recent announcements regarding cooperatives by Union Minister of Home Affairs and Cooperation :
- Union Minister Amit Shah addressed an event in Gandhinagar marking the 102nd International Day of Cooperatives.
- The government plans to establish Primary Agricultural Credit Societies (PACS) in every village and block across India.
- Currently, about 2 lakh gram panchayats lack PACS, which the government aims to address.
- Shah urged cooperative societies to open bank accounts with local banks and support local dairies to bolster the cooperative sector.
- The Ministry of Cooperation has initiated a drive to establish 2 lakh dairies and PACS in gram panchayats.
- In March 2024, the National Cooperative Database was launched to identify and address gaps in cooperative societies.
- The government aims to form PACS in every village by 2029 and plans to introduce a new national cooperative policy within a month to strengthen the cooperative movement, replacing the existing 2002 policy.
About Primary agricultural credit societies:
- PACS is the smallest cooperative credit institution in India and a basic unit.
- The initial Primary Agricultural Credit Society (PACS) was founded in 1904.
- It has a grassroots effect (gram panchayat and village level).
- PACS serves as the last point of contact between the primary borrowers, or rural residents, and the higher agencies, such as the Central Cooperative Bank, State Cooperative Bank, and Reserve Bank of India.
- PACS are governed by the RBI and registered under the Co-operative Societies Act.
- The “Banking Regulation Act-1949” and the “Banking Laws (Co-operative societies) Act 1965” are in charge of them.
Objectives of PACS
- To raise capital for the purpose of making loans and supporting members’ essential activities.
- To collect deposits from members with the goal of improving their savings habit.
- To supply agricultural inputs and services to members at reasonable prices,
- To arrange for the supply and development of improved breeds of livestock for members.
- To make all necessary arrangements for improving irrigation on land owned by members.
- To encourage various income-generating activities through supply of necessary inputs and services.
Functions of PACS
- PACS typically offer the following services to their members:
- Input facilities in the form of a monetary or in-kind component
- Agriculture implements for hire
- Storage space
