Government Plans Long-Term Finance Through PACS to Empower Farmers, Says Amit Shah

Cooperation Minister Amit Shah announced plans to offer long-term financing through Primary Agricultural Credit Societies (PACS) to support farmers. Speaking at the National Federation of State Co-operative Banks Ltd (NAFSCOB) Diamond Jubilee Celebration, Shah emphasised the need for PACS to become more viable, transparent, and modern. He expressed concern over the weakening cooperative spirit in some state and district-level banks.

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Currently, PACS provide only short-term financial support to farmers. Shah highlighted the importance of strengthening these societies, which number 1.05 lakh, though only 65,000 are operational. He urged NAFSCOB to focus on technological upgrades and youth engagement while increasing low-cost deposits. The government plans to boost district cooperative banks by 50% from the current 300 in the coming years.

Focus on Cooperative Banking Reforms

Shah called on NAFSCOB to play a larger role in enhancing the cooperative banking sector. He stated that their responsibilities extend beyond meetings and resolving issues with the RBI and government. Their task is to ensure PACS are viable, transparent, and modern. Workshops should be conducted to help PACS adapt to new technologies.

The minister recommended studying successful models like Ahmedabad District Cooperative Bank and Gujarat State Cooperative Bank. These can serve as benchmarks for improvement. He also urged both state and cooperative banks to aim for higher deposit targets and annual profits by focusing on raising low-cost deposits locally.

Technological Advancements and Expansion Plans

Currently, district cooperative banks hold deposits worth Rs 4.31 lakh crore, while state cooperative banks have Rs 2.42 lakh crore. The sector generates a combined profit of approximately Rs 4,281 crore. A common software in eight languages has been implemented to link state and district cooperative banks with NABARD, showing the government's commitment to technological transformation.

There are 34 state cooperative banks, 352 district cooperative banks, and 1.05 lakh PACS across India. Shah outlined the Modi 3.0 government's approach, stressing that the cooperative sector must advance rapidly while addressing structural and legal challenges effectively.

The minister's emphasis on cooperation aims to revitalise the sector's spirit at all levels. By focusing on technology and youth engagement, the government seeks to modernise PACS and expand their reach, ultimately empowering farmers through improved financial support mechanisms.