A Study on the Contributions of PACS towards Inclusive Growth of Rural Economy

Abstract

Credit cooperatives are regarded as an important source of agricultural credit for the vast majority of farmers in rural India. Institutions of Cooperative Credit had their launching in India after the enactment of Cooperative Societies Act of 1904 with the objective of emancipating the farmers from the clutches of money lenders. After independence a lot of efforts have been made by the Government of India and the State Governments to make the credit cooperatives efficient and farmer friendly. Indian economy is primarily agrarian in nature with more than 70% of the people living in rural areas. Agriculture happens to be the mainstay of livelihood for about 50% of the population of the country. Over the years cooperative credit has made phenomenal expansion in terms of membership coverage, credit advance etc. Primary Agricultural Cooperative Society (PACS) operates at the village level to cater to the credit needs of the farmers in rural areas. It may be observed that, the PACS is the foundation on which the entire cooperative structure is built upon. However many PACS suffer from small size, infrastructural weakness, operational inefficiency and structural flaws. In this context a number of Committees have been formed since 1945 starting from Cooperative Planning Committee to the latest, the Vaidyanathan Committee where recommendations were made to strengthen the cooperatives in the country. On the above backdrop the present article attempts to study the growth of cooperative credit particularly Primary Agricultural Credit Society (PACS) in terms of number of societies, membership, deposits, number of borrowers, loan advanced in India. It also focuses on the measures taken by different committees to revamp and revitalize the PACS. The study is primarily based on secondary data collected from the National federation of State Cooperative Banks Ltd. (NAFSCOB) and other published sources.