The author, Shaji K V, is Chairman of National Bank for Agriculture and Rural Development (NABARD)
Even as the world braces up to welcome the ‘International Year of Cooperatives’ in 2025, India’s cooperative sector finds itself on a strong foothold with a new, robust and fast-spawning array of Primary Agricultural Credit Societies (PACS) spreading across the nation. Equipped with a slew of economic and administrative reforms, these PACS are now all set to shape Prime Minister Modi’s vision of ‘Sahkar Se Samriddhi’ into a reality in rural, agricultural India.
Although India boasts of a glorious history of its cooperative sector, its growth has all along been punctuated by instances of mismanagement, lack of adequate government support during times of crisis and absence of the required reforms. However, the winds of change began to blow soon after Prime Minister Narendra Modi formed the Ministry of Cooperation in his second term anointing his trusted associate Amit Shah at the helm.
Minister of Cooperation Amit Shah, known as the pioneer of the reforms that reshaped the cooperative movement in Gujarat, brought about drastic reforms in the national cooperative scenario soon after taking charge, making the world look up to the sector. Of late, the potential of cooperatives is increasingly seen as shaping the country’s future. In the recent budget consultations with the Ministry of Finance, the National Cooperative Union of India (NCUI) had recommended leveraging the broad-based network of cooperatives to enhance service delivery in key sectors.
As an old hand, Amit Shah is well acquainted with the underpinnings that obstruct the growth of the cooperative sector. Among these impediments was the lack of diversification of the PACS, which made them almost unviable.
One of the foremost tasks that Amit Shah performed with the PACS was bringing in changes in their bye-laws. Emphasis is being laid on making PACS multi-purpose by bringing model bye-laws to get rid of their problems. This has helped them diversify their business into more than 25 business activities. Now they are working as Common Service Centers (CSC), providing more than 300 e-services in rural India, such as banking, insurance, Aadhaar enrolment/updation, health services, PAN card and IRCTC/bus/air tickets etc. So far, more than 35,000 PACS have started providing CSC services to rural citizens. Also, they are now being enabled to function as Pradhan Mantri Kisan Samriddhi Kendras (PMKSK), water committees, LPG distributors, retail petrol/diesel outlets, Farmer Producer Organizations (FPOs) etc. PACS are now also functioning as Pradhan Mantri Bhartiya Jana Aushadhi Kendras (PMBJAK) for the distribution of quality generic medicines at affordable rates in villages, thereby generating another source of income while making affordable medicines available for the rural population. All these efforts are going to increase the income of PACS and make them economically viable.
The ministry’s next formidable task was to win back people’s trust in the sector which was plagued by instances of mismanagement for decades. The computerization of 63,000 PACS is underway to ensure transparency. So far, more than 23 thousand PACS have been integrated with Enterprise Resource Planning (ERP) software. The computerization of PACS will enable them to be linked directly to the National Bank for Agriculture and Rural Development (NABARD). Common Accounting System (CAS) and Management Information System (MIS) will further infuse uniformity of operations. This will enhance public confidence in PACS operations.
With the newfound confidence and agility, the cooperative sector is now functioning in an organized manner, much to its benefit. The Minister of Cooperation Amit Shah has called upon all associated with the cooperative sector to open bank accounts in District Cooperative Banks to make them viable.
According to him, Cooperation amongst Cooperatives is a strong economic principle that is primordial to building a strong cooperative sector. Taking charge for the second time of the Ministry of Cooperation in 2024, Amit Shah vowed to strengthen the sector by effectively implementing policies at the grassroots. He had said that in his previous term, the focus was to create a policy framework and in the present tenure his priority is going to be to take these policies to the grassroots level.
One of the most important initiatives taken by the Ministry of Cooperation is the launch of the ‘World’s Largest Decentralized Grain Storage Programme’ in the cooperative sector. The scheme aims to create decentralized warehouses, custom hiring centers, primary processing units and other agricultural infrastructure for grain storage at the PACS level. Merging various schemes of the government like Agriculture Infrastructure Fund (AIF), Agricultural Marketing Infrastructure (AMI), Sub-Mission on Agricultural Mechanization (SMAM), Pradhan Mantri Formalization of Micro Food Processing Enterprises (PMFME) etc, the scheme seeks to build a gargantuan storage capacity for the nation. This will reduce wastage and transportation costs of food grains, farmers will get better prices for their produce and various agricultural needs will be met at the PACS level itself.
Since PACS are the backbone of rural development, their fortification and revival are bound to fuel the growth of the rural economy very shortly. While the seasonal unemployment is expected to end due to the rise of PACS-related activities, it will also benefit 13 crore farmers who are directly linked to about 1 lakh PACS, especially in employment and income generation in rural areas.
