Standard Operating Procedure of India for Liquidation of Primary Agriculture Cooperative Societies (PACS)

Context:

A new standard operating procedure (SOP) has been issued regarding the liquidation of PACS and LAMPS, according to which a liquidator should not take more than 15 days to complete the process after taking custody of property, claims, books, records, and documents.

Key Highlights:

• A Standard Operating Procedure (SOP) is a set of written instructions that outline the steps required to complete a routine activity or process.
• 15-Day Deadline for Liquidators
  • The appointment of liquidators would be within a deadline of 15 days for conducting the entire process within 15 days.
• Seven-Day Deadline for Identification
  • A seven-day limit for the identification of dead PACS.
• Objective of the SOP
  • The objectives of the SOP are to ensure efficiency in the cooperative sector through easy and effective liquidation of the well-functioning LAMPs and defunct PACs.
    • The SOP aims to liquidate by March 31 of the financial year.
• Creation of New Societies
  • Fresh societies would be organized after the dissolution of the non-functional PACS.
• Guidance and Adoption
  • SOP was issued to all State Registrars of Cooperative Societies for their modification and adaptation.

Primary Agricultural Credit Societies (PACS)

Primary Agricultural Credit Societies (PACS) are the grassroots-level cooperative credit institutions in India that serve as a vital part of the country’s cooperative credit structure. They play a crucial role in providing financial assistance and credit to farmers, particularly in rural areas. PACS are an instrument of financial inclusion of rural India and empower farmers to get community support.

• Financial Role:
  • PACS grants short-term loans for agriculture, borrowing for consumption, education, and health to rural families.
• Membership
  • Any farmer, who is a member of that cooperative, may join, and the loans are typically disbursed through Kisan Credit Cards (KCC).
• Governed By
  • The management of the PACS is vested in an elected committee of representatives from the local farming community and reports to higher level institutions of the cooperatives.
• Functions Beyond Credit
  • Apart from lending services, the PACS is concerned with such non-lending activities as providing storage facilities, providing procurement services, consumer stores, or fertilizer outlets.
• Support by Government
  • The Government has various financial schemes in support of PACS that comprise interest subvention and other types of subsidy programs.

Large Area Multipurpose Cooperative Societies (LAMPS)

Large Area Multipurpose Cooperative Societies (LAMPS) are specialized cooperative organizations in India, primarily focused on promoting the welfare of tribals and people residing in hilly and remote areas. These societies are particularly important in rural and underserved regions, providing financial and non-financial services to their members.

• Target Group
  • Provides a service to any tribals and hill, forested, and other inaccessible areas of India.
  • Uplifts the downtrodden, offering them credit, procurement, and marketing services.
• Objectives
  • Tribal Development: Promotion of economic activities among tribals.
  • Credit Service: Provides short-term loans as a credit service to the tribal people.
  • Marketing Service: Helps in procurement and marketing of tribal products.
  • Social Welfare Programmes: Water and sanitation, education, health, and skills are encouraged among tribal people.
• Organization
  • Organized in the normal formats of cooperative societies with tribal participation as the main members and run by the elected board of directors from within the cooperative.

• Services Offered
  • Financial Services: Offers a variety of credit, savings, and insurance products.
  • Procurement and Marketing Services: Collects forestry and agriculture products and other local items from the tribals.
  • Training and Development: Training to tribals on agriculture, livelihood skills, business management, and sustainable practices.
• Governance and Regulation
  • Generally regulated by the State Governments and come under the purview of the State Cooperative Societies Act.
• Functionality of LAMPS in Rural and Tribal Development
  • Financial Inclusion: It would bring about bridging the gaps of economically marginalized spaces.
  • Livelihood Support: Provide access to resources for both farm and non-farm activities.
  • Market Access: Ensure that tribal products fetch better prices.
  • Community Development: Contribute towards social as well as economic upliftment of tribal communities.
• Government Support:
  • Different financial incentives, subsidies.