Lok Sabha Question No. 3041 (UNSTARRED), answered on 2023-08-08
Subject: Functioning of PACSs
Ministry: COOPERATION
Asked by: Arun Sao, Vijay Baghel, Mohan Mandavi, Jugal Kishore Sharma, Chunni Lal Sahu, Kirit Premjibhai Solanki

## GOVERNMENT OF INDIA MINISTRY OF COOPERATION

## LOK SABHA UNSTARRED QUESTION NO. 3041 TO BE ANSWERED ON 08/08/2023

## Functioning of PACSs

## †3041. SHRI ARUN SAO:

SHRI VIJAY BAGHEL:

SHRI MOHAN MANDAVI:

SHRI JUGAL KISHORE SHARMA:

SHRI CHUNNI LAL SAHU:

DR. (PROF.) KIRIT PREMJIBHAI SOLANKI:

Will the Minister of COOPERATION ( सहकाįरता मंũी ) be pleased to state:

- (a) the steps taken by the Government to empower the primary level cooperative societies;
- (b) the  manner  in  which  the  model  by-laws  are  likely  to  help  in  providing  benefits  to  the farmers in the rural areas;
- (c) the plan towards computerization of primary Agricultural Credit Societies (PACSs);
- (d) the measures taken by the Government to expand the coverage of Credit Societies in the country;
- (e) the steps taken to diversify the business of PACSs; and
- (f) the  way  the  farmers  are  likely  to  be  benefitted  by  diversification  of  business  though PACSs ?

## ANSWER

## THE MINISTER OF COOPERATION सहकाįरता मंũी (SHRI AMIT SHAH)

- (a) to (f):  In order to strengthen cooperative movement in the country, deepen its reach to the grassroots,empower  the  primary  level  cooperative  societies,  expanding  the  coverage  of  credit societies in the country and to provide benefits to the farmers by diversification of business of PACS,various  initiatives  have  been  taken  by  the  Ministry  of  Cooperation  across  the  country including rural areas, such as:
- A. Diversifying the business of Primary Agricultural Credit Soceities (PACS) and making Primary Cooperative Socities transparent and economically vibrant (14 initiatives)
1. Model  Bye-Laws  for  PACS  making  them  multipurpose,  multidimensional  and transparent entities :  Prepared and circulated to all the States/ UTs for adoption as per their  respective  State  Cooperatives Act. These Model byelaws  for PACS will diversify

their business activities and enable them to undertake more than 25 economic activities which, inter alia, include dairy, fishery, floriculture, setting up of godowns, procurement of  foodgrains,  fertilizers,  seeds,  LPG/CNG/Petrol/Diesel  distributorship,  short-term  & long-term credit, custom hiring centers, common service centers, Fair Price Shops (FPS), community  irrigation,  Business  Correspondent  activities,  etc.  Diversification  of  PACS will  help  in  expanding  their  revenue  streams,  thereby,  increasing  the  income  of  the farmers. So far, Model byelaws have been adopted by 30 States/ UTs.

2. Strengthening of PACS through Computerization :  Process to onboard 63,000 PACS on an ERP based national software, with an outlay of ₹2,516 Crore started. Proposals for computerization  of  60,685  PACS  received  from  28  States  and  Union  Territories  have been  sanctioned.  Software  has  been  developed  by  NABARD.  Hardware  procurement, onboarding of system integrator and digitization of legacy data by the States and Union Territories Administration are under process.
3. New Multipurpose PACS/ Dairy/ Fishery Cooperatives in uncovered Panchayats : A plan  has  been  approved  to  set  up  2  lakh  new  multi-purpose  PACS  or  primary  dairy/ fisheries cooperatives covering every Panchayat/ village in the next five years.
4. World's Largest Decentralized Grain Storage Plan in Cooperative Sector to ensure food security :  Pilot  Project  is  under implementation to create godowns and other agriinfra for grain storage at PACS level.
5. PACS as Common Service Centers (CSCs) for better access to e-services : More than 18,000  PACS  onboarded  as  CSC  to  improve  their  viability,  provide  e-services  and generate employment in rural areas.
6. Formation of new Farmer Producer Organization (FPOs) by PACS : 1,100 additional FPOs to be formed by PACS in those blocks where FPOs have not yet been formed or the blocks are not covered by any implementing agency.
7. PACS given priority for Retail Petrol/ diesel outlets : PACS have been included in the Combined Category 2 (CC2) for allotment of retail petrol/ diesel outlets. Existing PACS with wholesale petrol pump license permitted to convert into retail outlets.
8. PACS eligible for LPG Distributorship for diversifying its activities : PACS have now been allowed to apply for LPG Distributorships.
9. PACS as Jan Aushadhi Kendra for improving access to generic medicines at rural level : PACS have been allowed to operate Pradhan Mantri Bhartiya Janaushadhi Kendras which will provide additional income source to them.
10. PACS  as  Pradhan  Mantri  Kisan  Samriddhi  Kendras  (PMKSK)  for  fertilizer distribution: PACS  have been allowed to operate PMKSK  for  ensuring easy accessibility of fertilizer & related services to farmers in the country.
11. Convergence of PM-KUSUM at PACS level for energy security : Farmers associated with PACS can adopt solar agricultural water pumps and install photovoltaic modules in their farms.
12. PACS to carry out O&M of rural piped water supply schemes (PWS) : PACS have been allowed to carry out the Operations & Maintenance (O&M) of PWS in rural areas.
13. Micro-ATMs to Bank Mitra Cooperative Societies for providing doorsteps financial services : Micro-ATMs now being given to cooperative societies like Dairy, Fisheries by the Cooperative Banks.
14. Rupay Kisan  Credit  Card  to  Members  of  Milk  Cooperatives :  Rupay  Kisan  Credit Cards  being  provided  to  the  members  of  cooperatives  through  Cooperative  Banks  for providing credit at comparatively lower interest rates.

## B. Strengthening the Urban and Rural Cooperative Banks (9 initiatives)

15. UCBs have now been allowed to open new branches to expand their business.
16. UCBs have been allowed by RBI to offer doorstep services to their customers.
17. Cooperative Banks have been allowed to make one-time settlement of outstanding loans, like Commercial Banks.
18. Time limit increased to achieve Priority Sector Lending (PSL) targets given to UCBs.
19. A Nodal Officer designated in RBI for regular interaction with UCBs.
20. Individual  housing  loan  limit  more  than  doubled  by  RBI  for  Rural  and  Urban  Cooperative Banks.
21. Rural Co-operative Banks will now be able to lend to commercial real estate/ residential housing sector, thereby diversifying their business.
22. License  fee  for  onboarding  Cooperative  Banks  to  'Aadhaar  Enabled  Payment  System' (AePS) has been reduced by linking it to the number of transactions.
23. Non-scheduled  UCBs,  StCBs  and  DCCBs  notified  as  Member  Lending  Institutions (MLIs) in CGTMSE Scheme to increase share of cooperatives in lending.
- C. Relief to Cooperative Societies in Income Tax Act (6 initiatives)
24. Surcharge reduced from 12 % to 7% for co-operative societies having income between Rs. 1 to 10 Cr.
25. MAT reduced for cooperatives from 18.5% to 15%.
26. A clarification has been issued to remove difficulties in cash transactions by cooperatives under Section 269ST of IT Act.
27. A flat  lower tax rate of 15% will be charged, compared with current rate of upto 30% plus surcharge, for new cooperatives commencing manufacturing activities till March 31, 2024.
28. Limit increased from Rs. 20,000 to Rs. 2 lakh per member for deposits and loans in cash by PACS and PCARDBs.
29. Increase in cash withdrawal limit for cooperatives from Rs. 1 Crore to Rs. 3 Crore, per annum, without being subjected to TDS.

## D. Revival of Cooperative Sugar Mills (4 initiatives)

30. Relief from Income Tax to Sugar Cooperative Mills : Sugar cooperative mills not to be subjected to additional income tax for paying higher sugarcane prices to farmers up to Fair and Remunerative or State Advised Price.
31. Resolution of decades old pending issues related to Income  Tax  of Sugar Cooperative Mills : Sugar cooperatives allowed to claim as expenditure their payments to sugarcane  farmers  for  the  period  prior  to  assessment  year  2016-17,  giving  a  relief  of nearly Rs. 10,000 crores.
32. Rs.  10,000  crore  loan  scheme  launched  by  NCDC  for  strengthening  of  Sugar Cooperative  Mills :  Scheme  can  be  used  for  setting  up  ethanol  plants  or  cogeneration plants or for working capital or for all three purposes.
33. Preference  to  Cooperative  Sugar  Mills  in  purchase  of  ethanol :  Cooperative  Sugar Mills will be put at par with private companies for ethanol procurement by Government of India under the Ethanol Blending Programme (EBP).

## E. Three new Multi-State Societies at the National Level (3 initiatives)

34. New National Multi-State Cooperative Seed Society for certified seeds :  New apex multistate cooperative seed society established under the MSCS Act, 2002 as umbrella organization for quality seed cultivation, production and distribution under a single brand.
35. New National  Multi-State  Cooperative  Organic  Society  for  organic  farming :  New  apex multi-state  cooperative  organic  society  established  under  the  MSCS  Act,  2002  as  umbrella organization to produce, distribute and market certified and authentic organic products.
36. New National Multi-State Cooperative Export Society for promoting exports :  New apex multi-state  cooperative  export  society  established  under  the  MSCS  Act,  2002  as  umbrella organization to give thrust to exports from cooperative sector.

## F. Capacity Building in Cooperatives (3 initiatives)

37. Establishment  of  the  World's  Largest  Cooperative  University: National  Cooperative University  being  established  for  Cooperative  education,  training,  consultancy,  research  and development and a sustainable and quality supply of trained manpower.
38. New  Scheme  of  Cooperative  Education  and  Training :  To  strengthen  the  cooperative movement,  build  capacity  of  faculty  of  VAMNICOM,  NCCT  and  JCTC,  promote  quality research and studies on important areas of Cooperative sector, etc.
39. Promotion of training and awareness through National Council for Cooperative Training (NCCT) :  NCCT conducted 3,287 training programs and provided training to about 2,01,507 participants in FY 2022-23.
- G. Use of Information Technology for 'Ease of Doing Business' (2 initiatives)
40. Computerization  to  strengthen  the  Central  Registrar's  Office :  This  will  create  a  digital ecosystem for Multi-State Cooperative Societies, which will assist in processing applications and service requests in a time bound manner.
41. Scheme for computerization of office of RCSs in States and Union Territories : To increase ease of doing business for Cooperative Societies and create a digital ecosystem for transparent paperless regulation in all States/Union Territories.

## H. Other Initiatives (7 initiatives)

42. New  National  Cooperative  Database  for  authentic  and  updated  data  repository : Preparation of a database of cooperatives in the country started to facilitate stakeholders in policy making and implementation.
43. Formulation  of  New  National  Cooperative  Policy :  A  National  level  committee comprising 49 experts and stakeholders drawn from all over the Country constituted to formulate  the  New  National  Cooperative  Policy  to  create  an  enabling  ecosystem  to realize the vision of 'Sahakar-se-Samriddhi'.
44. Multi-State  Co-operative  Societies  (Amendment)  Act,  2023 :  Amendment  has  been brought  in  the  MSCS  Act,  2002  to  incorporate  provisions  of  97 th Constitutional Amendment, strengthen  governance,  enhance  transparency,  increase  accountability  and reform electoral process in the Multi State Cooperative Societies.
45. Inclusion  of  Cooperatives  as  'buyers'  on  GeM  portal :    Cooperatives  permitted  to register as 'buyer' on GeM, enabling them to procure goods and services from nearly 40 lakh vendors to facilitate economical purchases and greater transparency.
46. Expansion of National Cooperative Development Corporation to increase its range and depth : New schemes for cooperatives launched by NCDC in various sectors such as 'Swayamshakti  Sahkar' for  SHG;  'Deerghavadhi  Krishak Sahkar' for long term agricultural  credit;  'Dairy  Sahkar'  for  dairy  and  'Neel  Sahkar'  for  fisheries.  Total financial assistance of Rs. 41,024 Crores disbursed by NCDC in FY 2022-23.
47. Computerization  of  Agriculture  and  Rural  Development  Banks  (ARDBs) :  To strengthen the Long-term Cooperative Credit structure, the project of computerization of Agriculture and Rural Development Banks (ARDBs) is being undertaken.
48. Refund  to  Investors  of  Sahara  Group  of  Societies :  A  portal  has  been  launched  for making payments to the bona fide depositors of the cooperative societies of Sahara Group in  a  transparent  manner  after  proper  identification  and  submission  of  proof  of  their deposits and claims.

*****