Cooperative Societies in Agriculture Sector: An Operational Model in India

Preparation of an authentic and updated data repository of cooperatives in the country started to facilitate stakeholders in policy making and implementation.

The agricultural sector in India has a rich history of cooperative societies working towards the welfare of farmers and rural development. With over 1,00,428 Primary Agricultural Credit Societies (PACS), Large Area Multi-Purpose Societies (LAMPS)/Farmers Services Societies (FSS) and 619 State Cooperative Agriculture and Rural Development Banks (SCARDB) and Primary Cooperative Agriculture and Rural Development Banks (PCARDBs), the cooperative movement has been instrumental in providing credit and other services to farmers.

In order to further strengthen and expand the cooperative model in the country, the Ministry has taken up the formulation of a new National Cooperation Policy. The policy aims to promote cooperative-based economic development, deepen the reach of cooperatives up to the grassroots level and strengthen the cooperative movement in the country. The Ministry has already held consultations with stakeholders and invited suggestions for the new policy from various departments, states, national cooperative federations and the general public.

A national-level committee has been constituted under the chairmanship of Suresh Prabhakar Prabhu, consisting of experts from the cooperative sector, representatives from various cooperative societies and officers from central ministries/departments to formulate the draft of the new policy based on the feedback and suggestions received.

ADVERTISEMENT

In order to strengthen and promote cooperative ecological system in various sectors including the agriculture based cooperative societies, the Ministry of Cooperation since its formation in July 2021 has taken various initiatives such as:

Regenerate response

In order to strengthen and promote cooperative ecological system in various sectors including the agriculture based cooperative societies, the Ministry of Cooperation since its formation in July 2021 has taken various initiatives such as: 

Computerization of PACS

Process to onboard 63,000 functional PACS on an ERP based common national software with an outlay of Rs. 2,516 Crore started. Model byelaws for PACS: Model byelaws prepared and circulated for their adoption as per the respective State Cooperatives Act to enable PACS to undertake more than 25 business activities like dairy, fishery, setting up of godowns, LPG/ Petrol/ Green energy distribution agency, banking correspondents, CSC, etc.

PACS as Common Service Centres (CSC)

MoU signed between the Ministry of Cooperation, Ministry of Electronics and Information Technology, NABARD and CSC – SPV to facilitate functioning of PACS as CSCs to improve their viability, provide e-services at village level and generate employment.

National Cooperative Database

Preparation of an authentic and updated data repository of cooperatives in the country started to facilitate stakeholders in policy making and implementation.
Establishment of Multi-Purpose PACS, Dairy and Fisheries Cooperative Societies in every Panchayat/Village: A plan has been approved by the Government to set up 2 lakh new multi-purpose PACS, dairy and fisheries cooperatives covering every Panchayat/Village in the next five years by taking advantage of various existing schemes.

National Cooperative Policy

A National level committee composed of experts and stakeholders drawn from all over the Country constituted to formulate the New Cooperation Policy to create an enabling ecosystem to realize the vision of ‘Sahakar-se- Samriddhi’.
Amendment of MSCS Act, 2002: Bill introduced in the Parliament to amend the centrally administered MSCS Act, 2002 to incorporate provisions of 97th Constitutional Amendment, strengthen governance, enhance transparency, increase accountability and reform electoral process in the Multi State Cooperative Societies.

National Cooperative Development Corporation

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. 34,221 Crores disbursed in FY 2021-22.

Member Lending Institutions in Credit Guarantee Fund Trust

Non-scheduled UCBs, StCBs and DCCBs notified as MLIs in CGTMSE Scheme to increase share of cooperatives in lending.

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.

Reduction in surcharge on cooperative societies

Surcharge reduced from 12 % to 7% for co-operative societies having income between Rs. 1 to 10 Cr.

Reduction in Minimum Alternate Tax

MAT reduced for cooperatives from 18.5% to 15%.

Relief under Section 269ST of IT Act

A clarification has been issued to remove difficulties in cash transactions by cooperatives under Section 269ST of IT Act.

Lowering tax rate for new cooperatives

Announcement made in the Union Budget 2023- 24 to charge flat lower tax rate of 15%, compared with current rate of upto 30% plus surcharge, for new cooperatives commencing manufacturing activities till March 31, 2024.

Increase in limit of deposits and loans in cash by PACS and PCARDBs

Announcement made in the Union Budget 2023-24 to increase the limit from Rs. 20,000 to Rs. 2 lakh per member for deposits and loans in cash by PACS and PCARDBs.

Increase in limit for TDS

Announcement made in the Union Budget 2023-24 to increase cash withdrawal limit for cooperatives from Rs. 1 Crore to Rs. 3 Crore, per annum, without being subjected to TDS.

Relief to Sugar Cooperative Mills

Sugar cooperative mills not to be subjected to additional income tax for paying higher sugarcane prices to farmers upto Fair and Remunerative or State Advised Price.

Resolution of chronic pending issues of Sugar Cooperative Mills

Announcement made in the Union Budget 2023-24 to allow sugar cooperatives 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.

New National Multi-State Cooperative Seed Society

New apex national multi-state cooperative seed society being established under the MSCS Act, 2002 as an umbrella organization for quality seed cultivation, production and distribution under a single brand.

New National Multi-State Cooperative Organic Society

New apex national multi-state cooperative organic society being established under the MSCS Act, 2002 as an umbrella organization to produce, distribute and market certified and authentic organic products.

New National Multi-State Cooperative Export Society

New apex national multi-state cooperative export society being established under the MSCS Act, 2002 as an umbrella organization to give thrust to exports from the cooperative sector.

The Ministry of Cooperation is responsible for providing an administrative, legal and policy framework for strengthening the cooperative movement in the country. However, information related to procurement of vegetable or fruits or any kind of agricultural produce by the cooperative societies is not available with this Ministry.

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

State-wise list of cooperative societies is annexed as Annexure.

         Annexure

Functioning of Primary Agriculture Credit Societies (PACS)

A State-wise list of functional Primary Agricultural Credit Societies (PACS) is annexed as Annexure.

A Centrally sponsored project for Computerization of functional PACS/ Large Area Multipurpose Cooperative Societies (LAMPS)/ Farmers Service Societies (FSS) across the country with a total financial outlay of Rs. 2,516 Crore is under implementation. The project entails bringing all the functional PACS on ERP (Enterprise Resource Planning) based common software, linking them with NABARD through State Cooperative Banks (StCBs) and District Central Cooperative Banks (DCCBs).

At present, proposals for computerization of 54,752 PACS has been received from the States/UTs and central share amounting to Rs. 201.18 crore has been released for the procurement of hardware, digitization of legacy data and establishing support system. During the project period, a support system would be established for providing handholding support to the PACS. Maintenance of the hardware installed at PACS will be responsibility of the respective PACS, DCCBs/StCBs on an ongoing basis even after completion of the project period. The central infrastructure facility and common software will be maintained and updated by NABARD periodically.

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

State-wise list of functional PACS*

The term ‘functional PACS’ is understood to cover those PACS that have been audited as on 31^st March, 2022

*  Survey done by NABARD

** In case of Tamil Nadu, total number of PACS reported as 4532, has been indicated as 7 because the audit reports have not been finalised due to conduct of special audit with regard to State Debt Waiver Scheme.

(India CSR)