A liquidator should not take more than 15 days to complete the liquidation of Primary Agriculture Cooperative Societies (PACS) after it takes custody of the property, claims, books, records and documents, a recent standard operating procedure (SOP) for liquidation of PACS and LAMPS (Large Area Multipurpose Societies) said.
Released a few days ago by Union Cooperatives Minister Amit Shah, the SOP also said that state cooperative department officers concerned should not take more than seven days to identify defunct PACS as per the criteria laid down by the respective State Cooperative Societies Acts.
The SOP was shared with all state Registrars of Cooperative Societies, with advice to modify it suitably and adopt.
"This would enable liquidation of identified defunct PACS and LAMPS to be completed within March 31, 2025," a senior official explained.
LAMPS are cooperative societies established by the government to support tribal development and people living in hilly areas.
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Once defunct PACS are liquidated, new ones can come up in their place, which would ensure that the target of setting up 200,000 new functional societies of this nature in the next five years is achieved at the earliest. At present, India has close to 1.05 lakh PACS, of which just around 65,000 are functional.
Of the 200,000 new PACS, Nabard will set up around 22,750 in the first phase and 47,250 in the second phase, National Dairy Development Board (NDDB) will set up 56,500 in the first phase and revitalise 46,500 existing ones. That apart, the National Fisheries Development Board (NFDB) will also set up 6,000 new PACS in the first phase and revitalise 5,500 existing ones.
PACS constitute the lowest tier of the three-tier cooperative credit structure in the country, comprising more than 13 crore farmers as its members.
As per a data shared a few years ago, PACS had then accounted for 41 per cent (3.01 crore farmers) of the Kisan Credit Card (KCC) loans given by all entities in the country. And, 95 per cent of these KCC loans (2.95 crore farmers) through PACS were given to small and marginal farmers.
In 2022, the Union Cabinet had approved an ambitious programme to strengthen around 63,000 PACS with a grant of over Rs 2,516 crore. That aside, the Centre has also allowed PACS to undertake a whole gamut of ancillary economic activities to make them viable.
Other than credit, PACS are now allowed to offer a host of such activities, which include developing cold storage facilities in villages, running PDS (public distribution system) shops, providing locker facility for rural depositors, acting as common service centres for government schemes, and enabling villagers to work in dairy, fishery, irrigation, and biogas sectors.
The SOP has also said that an officer appointed by the Registrar of Cooperative Societies should conduct a detailed inquiry into the causes for liquidation of an individual PACS and submit a report to the Registrar Office within 15 days.
“In case the officer recommends a revival of the said PACS, then preparation for a revival business plan should be done in seven days,” the SOP said.
It also said that after receiving the receipt of the winding-up proceeding report from the liquidator, an auditor shall be appointed to audit the liquidator account within seven days.
The SOP further laid down that all surplus assets of the liquidated PACS should be disposed of by the liquidator as per the Societies Act. No timeline has been given for the same.