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Somatirtha Purohit

The Cabinet Committee on Economic Affairs on Wednesday approved Rs 2,516 crore for computerisation of functional 63,000 Primary Agriculture Credit Societies (PACS) aimed at promoting financial inclusion.

Addressing the media after the Cabinet meeting, Information and Broadcasting Minister Anurag Singh Thakur said this move of the Cabinet will benefit 13 crore farmers, mostly small and marginal.

This project proposes computerisation of about 63,000 functional PACS over a period of 5 years with a total budget outlay of Rs 2516 crore with Centre's share of Rs 1528 crore.

PACS account for 41% (3.01 crore farmers) of the KCC loans given by all entities in the Country and 95% of these KCC loans (2.95 crore farmers) through PACS are to the Small and Marginal farmers. The other two tiers viz. State Cooperative Banks (StCBs) and District Central Cooperative Banks (DCCBs) have already been automated by the NABARD and brought on Common Banking Software (CBS).

However, majority of PACS have so far been not computerised and still functioning manually resulting in inefficiency and trust deficit. In some of the states, stand-alone and partial computerisation of PACS has been done. 
There is no uniformity in the software being used by them and they are not interconnected with the DCCBs and StCBs. 

"Under the guidance of Home Minister Amit Shah, it has been proposed to computerise all the PACS throughout the Country and bring them on a common platform at National level and have a Common Accounting System (CAS) for their day to day business," read an official release.

Computerisation of PACS, besides serving the purpose of financial inclusion and strengthening service delivery to farmers especially Small and Marginal Farmers (SMFs) will also will become nodal service delivery point for various services and provision of inputs like fertilizers, seeds etc. The project will help improve the outreach of the PACS as outlets for banking activities as well as non-Banking activities apart from improving digitalisation in rural areas. 

The DCCBs can then enroll themselves as one of the important options for taking up various government schemes (where credit and subsidy is involved) which can be implemented through PACS. It will ensure speedy disposal of loans, lower transition cost, faster audit and reduction in imbalances in payments and accounting with the State. 

The project comprises development of cloud-based common software with cyber security and data storage, providing hardware support to the PACS, digitisation of existing records including maintenance support and training. This software will be in vernacular language having flexibility of customisation as per the needs of the States. 

Project Management Units (PMUs) will be set up at Central and State levels. District Level Support will also be provided at cluster of about 200 PACS. In the case of states where computerisation of PACS has been completed, Rs 50,000 per PACS will be reimbursed provided they agree to integrate with/adopt the common software, their hardware meets the required specifications, and the software was commissioned after February 1, 2017.

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