Computerization and Strengthening of Primary Cooperative Societies

Government of India, in order to strengthen of Primary Agricultural Cooperative Societies (PACS), is implementing the Project for Computerization of functional PACS with a total financial outlay of ₹2,516 Crore, which entails bringing all the functional PACS onto an ERP (Enterprise Resource Planning) based common national software, linking them with National Bank for Agriculture and Rural Development (NABARD) through State Cooperative Banks (StCBs) and District Central Cooperative Banks (DCCBs). The ERP (Enterprise Resource Planning) based common national software brings about efficiency in PACS performance through Common Accounting System (CAS) and Management Information System (MIS). So far, proposals for computerization of 67,930 PACS from 30 States/ UTs have been sanctioned, for which a total of Rs 865.81 crore have been released to States/ UTs concerned including  Rs. 699.89 crore as GoI share to the States/UTs concerned and Rs 165.925 crore to NABARD being implementing agency as per the guidelines issued by Department of Expenditure, Ministry of Finance from time to time.

The details including the funds allocated and utilized during the last three years are attached as Annexure-I.

   The details on number of primary cooperative societies that have been computerised so far and that are yet to be computerised, State-wise are attached as Annexure-II.

   The Government of India has initiated a Centrally Sponsored Project to computerize functional Primary Agricultural Credit Societies (PACS) over a five-year period from 2022-23 to 2026-27. Thus, the sunset date of the project is 31.03.2027

   The number of PACS officials/employees who have received training on ERP is 26,882.  As per the project guidelines, there is no provision for financial support for hiring outsourced employees by PACS.

       The Ministry of Cooperation, since its inception on 6th July 2021, has taken many initiatives to strengthen and deepen the cooperative movement at the grassroots level including capacity building, infrastructure development and digital literacy training for various stakeholders of the cooperative sector, such as “Model Bye-Laws for PACS making them multipurpose, multidimensional and transparent entities”, “Establishing New Multipurpose PACS/ Dairy/ Fishery Cooperatives in uncovered Panchayats”, “Pilot project for World’s Largest Decentralized Grain Storage Plan in Cooperative sector”, “Computerization of the offices of Registrar of Cooperative Societies of States/ UTs”, “Computerization of Agriculture and Rural Development Banks (ARDBs)”, “Computerization of functional Primary Agricultural Credit Societies (PACS)”, “National Cooperative Database”, “Amendment of the Multi-State Cooperative Societies (MSCS) Act, 2002”, “Reliefs to Cooperative Societies in the Income Tax Act”, “Initiatives for revival of Cooperative Sugar Mills”, “Establishment of three new national-level multi-state cooperative societies for seed, organic products and exports”, etc.  The details on all these major initiatives are attached as Annexure-III.

   The Ministry of Cooperation (MoC) has adopted a multi-layered approach to evaluate the impact of computerisation at the grassroots level for ensuring effective implementation of these projects. Regular monthly review meetings are conducted with States/UTs to assess the progress of various initiatives including computerization of PACS.  Key stakeholders such as NABARD, NDDB, NFDB, and others have been roped in to review the progress of various initiatives through their National, State and District level officials and machinery. National Level Monitoring and Implementation Committee (NLMIC), State and District Level Implementation and Monitoring Committees (SLIMC and DLIMC) have been formed to review especially the PACS Computerization Project. Further, State Cooperative Development Committee (SCDC) has been constituted at the State level under the chairmanship of the Chief Secretary and District Cooperative Development Committee (DCDC) has been constituted at the district level under the chairmanship of the District Collectors to ensure effective implementation and monitoring of all the initiatives, including computerization of PACS of Ministry of Cooperation.

Further, NITI Aayog is evaluating the Centrally Sponsored Schemes (CSS) in the Agriculture & Allied Sector for which letter of Award has been issued to NABCONS (NABARD Consultancy Services Private Limited) on GeM portal on 21.10.2024. The impact assessment includes "Computerization of PACS" and "Strengthening of Cooperatives through IT interventions" projects of this Ministry.

Primary Agriculture Credit Societies (PACS) constitute the lowest tier of the Short-Term Cooperative Credit Structure (STCCS) in the country, primarily providing short-term and medium-term credit facility and other input services, like seed, fertilizer, pesticide distribution, etc. to member farmers. Presently, around 13 crore farmers are linked with PACS. Being the grassroots level cooperative institutions, PACS play a crucial role in sustaining the rural economy of the country by purveying institutional credit to small and marginal farmers. Computerization of PACS project improved governance and transparency in PACS, leading to speedy disbursal of loans, lowering of transaction cost, reduction in imbalances in payments, seamless accounting with DCCBs and StCBs. It enhances trustworthiness in the working of PACS among farmers, thus contributing towards realizing the vision of “Sahakar se Samridhi”.

31. Revival of Cooperative Sugar Mills
32. Relief from Income Tax to Sugar Cooperative Mills: Government has issued a clarification that cooperative sugar mills would not be subjected to additional income tax for paying higher sugarcane prices to farmers up to Fair and Remunerative or State Advised Price, from April, 2016 onwards.
33. Resolution of decades old pending issues related to Income Tax of Sugar Cooperative Mills: Government has made a provision in its Union Budget 2023-24, wherein Sugar cooperatives have been allowed to claim as expenditure their payments to sugarcane farmers for the period prior to assessment year 2016–17, giving them a relief of more than Rs.46,000 crore.
34. Rs.10,000 crore loan scheme launched for strengthening of Sugar Cooperative Mills: Government has launched a scheme through NCDC for setting up ethanol plants or cogeneration plants or for working capital or for all three purposes. So far, the Ministry has released Rs. 750 crore to NCDC (Rs. 500 crore in FY 2022-23 and Rs. 250 crore in FY 2024-25) under the scheme and as on 7.11.2024, NCDC has so far sanctioned Rs.7790.00 crore to 56 CSMs.
35. Preference to Cooperative Sugar Mills in purchase of ethanol: Cooperative Sugar Mills have now been put at par with private companies for ethanol procurement by Government of India under the Ethanol Blending Programme (EBP).

41. Reduction in GST on molasses from 28% to 5%: Government has decided to reduce the GST on molasses from 28% to 5% which will enable cooperative sugar mills to earn more profits for their members by selling molasses to distilleries with higher margins.

5. Three new National Level Multi-State Societies

42. New National Multi-State Cooperative Seed Society for certified seeds: Government has established a new apex multi-state cooperative seed society under the MSCS Act, 2002, namely Bharatiya Beej Sahakari Samiti Limited (BBSSL) as an umbrella organization for quality seed cultivation, production and distribution under a single brand. BBSSL so far has planted breeder seeds of Wheat, Mustard, and Pulses (Gram, Pea) on 366 Hectare land during Rabi season. Similarly, during Kharif season breeder seeds of Paddy, Moong, Soyabean, Groundnut, Jowar and Guar have been planted on 148.26 Hectare land. So far, 14,816 PACS/ Cooperative Societies have become members of BBSSL.
43. New National Multi-State Cooperative Organic Society for organic farming: Government has established a new apex multi-state cooperative organic society under the MSCS Act, 2002, namely National Cooperative Organics Limited (NCOL) as an umbrella organization to produce, distribute and market certified and authentic organic products. So far, 3,772 PACS/ cooperative societies have become members of NCOL. NCOL has launched 13 products i.e., Whole Wheat Flour, Moong Dhuli,  Moong Whole, Moog Chilka Dal, Moog Split, Arhar/Toor Dal, Urad Whole, Urad Dal, Masoor Whole, Masoor Malka,Brown Chana, Rajma Chitra, Chana Dal under ‘Bharat Organics Brand’.
44. New National Multi-State Cooperative Export Society for promoting exports: Government has established a new apex multi-state cooperative export society under the MSCS Act, 2002, namely National Cooperative Export Limited (NCEL) as an umbrella organization to give thrust to exports from cooperative sector. So far, 5,438 PACS/ cooperative societies have become members of NCEL. Till date, NCEL has achieved a total export quantity of commodities (rice, sugar, onion, wheat, maize and Jeera) of 11,62,728 Metric tonnes with an exported value of Rs. 4,581.7 crore.

6. Capacity Building in Cooperatives

45. Promotion of training and awareness through National Council for Cooperative Training (NCCT): By increasing its reach, NCCT has conducted 1,937 training programs and provided training to 1,09,021 participants till October 2024.

7. Use of Information Technology for ‘Ease of Doing Business’

46. Computerization of the Central Registrar’s Office: Central Registrar’s office has been computerized to create a digital ecosystem for Multi-State Cooperative Societies, which will assist in processing applications and service requests in a time bound manner.
47. Scheme for computerization of office of RCSs in States/Union Territories: To increase ‘Ease of doing business’ for Cooperative Societies and create a digital ecosystem for transparent paperless regulation in all the States/ Union Territories, a Centrally Sponsored Project for computerization of RCS Offices has been approved by the Government. Grants are provided for purchase of hardware, development of software, etc. to the States/ UTs. So far, proposals received from 35 States/ UTs have been sanctioned by GOI.
48. Computerization of Agriculture and Rural Development Banks (ARDBs): To strengthen the long-term cooperative credit structure, the project of computerization of 1,851 units of Agriculture and Rural Development Banks (ARDBs) spread across 13 States/ Union Territories has been approved by the Government. NABARD is the implementing agency for the project. So far, proposals from 10 States/UTs have been received and sanctioned. Further, GOI share amounting to Rs 4.26 crore has been released to 8 States/UTs in FY 2023-24 and FY 2024-25 for procurement of hardware, digitization and setting up of support system.
49. Other Initiatives
50. New National Cooperative Database for authentic and updated data repository: A database of cooperatives in the country has been prepared with the support of State Governments to facilitate stakeholders in policy making and implementation of programmes/ schemes related to cooperatives across the country. So far, data of more than 8 lakh cooperatives has been captured in the database.
51. Multi-State Co-operative Societies (Amendment) Act, 2023: Amendment has been brought in the MSCS Act, 2002 to strengthen governance, enhance transparency, increase accountability, reform electoral process and incorporate provisions of 97th Constitutional Amendment in the Multi State Cooperative Societies.
52. Cooperative Ombudsman: Following the amendment in the Multi–State Cooperative Societies (MSCS) Act, 2002, Cooperative Ombudsman has been appointed under Section 85A of the said Act vide gazette notification dated 05.03.2024. The Ombudsman office is fully functional and deals with complaints or appeals, from members of the MSCS regarding their deposits, equitable benefits of the Multi–State Co-operative Society’s functioning or any other issue affecting the individual rights of the concerned member.
53. Cooperative Election Authority (CEA): Following the amendment in the Multi–State Cooperative Societies (MSCS) Act, 2002, the Cooperative Election Authority has been set up to strengthen governance and accountability, with a mandate to conduct free and fair election in all MSCSs. Elections in more than 60 MSCS have been conducted successfully.

53. Inclusion of Cooperatives as ‘buyers’ on GeM portal:  Government has permitted cooperatives to register as ‘buyer’ on GeM, enabling them to procure goods and services from over 67 lakhs vendors to facilitate economical purchases and greater transparency. So far, 574 cooperative societies have been onboarded on GeM as buyers. To date, 2,406 transactions have been done with transaction amount of Rs. 273.62 crores.
54. Expansion of National Cooperative Development Corporation (NCDC) to increase its range and depth: NCDC has launched new schemes in various sectors such as ‘SwayamshaktiSahkar’ for SHGs; ‘Deerghavadhi Krishak Sahkar’ for long term agricultural credit and ‘Dairy Sahkar’ for dairy. During the current FY 2024-25, so far, total financial assistance of Rs. 52,533 crores has been disbursed by NCDC.

55. Financial assistance by NCDC for Deep Sea Trawlers: NCDC is providing financial assistance for projects related to deep sea trawlers in coordination with the Department of Fisheries, Government of India. NCDC has already sanctioned financial assistance of Rs. 25.95 crore for purchase of total 44 deep sea trawlers for the Fisheries Cooperative Societies of Maharashtra and Gujarat State.
56. Refund to Investors of Sahara Group of Societies: A portal has been launched for making payments to the genuine depositors of the cooperative societies of Sahara Group in a transparent manner. Disbursements have already started after proper identification and submission of proof of their deposits and claims. So far, Rs.1248.71 crores have been disbursed to 8.23 lakhs applicants.

    This was stated by the Minister of Cooperation, Shri Amit Shah in a written reply to a question in the Lok Sabha.