Primary Agricultural Credit Societies (PACS)
Agriculture
- PYQs11
- Articles2
Background
PACS are fundamental to India's rural economy, agricultural credit, and the cooperative movement. Their modernization, diversification, and governance reforms are key policy initiatives impacting farmers' welfare, financial inclusion, and the effectiveness of government schemes.
Primary Agricultural Credit Societies (PACS) are the grassroots-level institutions of the short-term cooperative credit structure in India, directly providing credit and other services to farmers in rural areas. They form the base of the three-tier cooperative credit system.
Facts & tables
- Structure
- Base tier of the 3-tier Short-Term Cooperative Credit Structure (STCCS).
- Function
- Provide short-term and medium-term agricultural loans and other services to farmers.
- Significance
- Crucial for financial inclusion, rural development, and agricultural credit delivery.
- Modernization
- Government initiative for computerization (ERP onboarding) aims to enhance efficiency and transparency.
- Computerization Project
- Government of India is implementing a Central Sponsored Project for computerization of PACS, with 3,482 PACS sanctioned in Punjab.
- Diversification of Services
- PACS are diversifying their services, acting as Pradhan Mantri Kisan Samriddhi Kendras, Pradhan Mantri Bhartiya Janaushadhi Kendras, and Common Service Centres.
- Model Bye-laws
- Government circulated model bye-laws for PACS (Jan 2023) to ensure inclusive membership, including adequate representation for women and SCs/STs.
- Role in Grain Storage
- Identified to create storage capacity under the world's largest grain storage scheme, with FCI providing requirements.
| Type | Reference |
|---|---|
| Conceptual area | Digital Financial Infrastructure |
| Conceptual area | Welfare Schemes & Social Policies |
| Conceptual area | Cooperative Movement |
| Conceptual area | Rural Development |
| Body | Role |
|---|---|
| Ministry of Cooperation | Oversees policy and initiatives for cooperative societies |
| NABARD | Provides refinance and supervision to cooperative credit institutions |
| Government of India | Initiates and funds projects |
| Food Corporation of India (FCI) | Provides storage requirements |
Prelims angle
Prelims angle: Statement-based questions
Prelims angle: Institutional roles and functions
- Grassroots level of short-term cooperative credit structure.
- Provide direct credit and services to farmers.
- Crucial for rural financial inclusion and agricultural development.
- Computerization project (e.g., ERP onboarding) aims for efficiency and transparency.
- Overseen by Ministry of Cooperation; refinanced by NABARD.
| Year | Framing tags |
|---|---|
| 2023 | Statement-based questions, Conceptual understanding |
| 2021 | Factual recall, Institutional roles and functions |
| 2020 | Statement-based questions, Institutional roles and functions |
| 2020 | Multi-statement analysis, Conceptual understanding |
| 2020 | Statement-based questions, Conceptual understanding |
| 2020 | Multi-statement analysis, Factual recall |
| 2018 | Multi-statement analysis, Factual recall |
| 2016 | Multi-statement analysis, Policy measures |
| 2015 | Factual recall, Conceptual understanding |
| 2014 | Factual recall, Multi-statement analysis |
| 2013 | Factual recall, Institutional roles and functions |
Timeline
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Digital Financial Infrastructure
Conceptual area
-
Welfare Schemes & Social Policies
Conceptual area
-
Cooperative Movement
Conceptual area
-
Rural Development
Conceptual area
-
Prelims 2013
Factual recall, Institutional roles and functions
-
Prelims 2014
Factual recall, Multi-statement analysis
-
Prelims 2015
Factual recall, Conceptual understanding
-
Prelims 2016
Multi-statement analysis, Policy measures
-
Prelims 2018
Multi-statement analysis, Factual recall
-
Prelims 2020
Statement-based questions, Institutional roles and functions
-
Prelims 2020
Multi-statement analysis, Conceptual understanding
-
Prelims 2020
Statement-based questions, Conceptual understanding
-
Prelims 2020
Multi-statement analysis, Factual recall
-
Prelims 2021
Factual recall, Institutional roles and functions
-
Prelims 2023
Statement-based questions, Conceptual understanding
-
Multi-Purpose Cooperative Societies in Rajasthan
PACS are the foundational units of India's cooperative credit system, providing essential agricultural loans and services to farmers. Recent government efforts, including the computerization project, aim to improve their operational efficiency and transparency, crucial for rural financial inclusion.
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Strengthening of cooperative institutions in Punjab
PACS are village-level cooperative credit bodies undergoing computerization, diversification into various service centers, and governance reforms through model bye-laws to enhance inclusivity and efficiency in rural India.
See also
Past papers
2013–2021 · 10 questions
In the news
Strengthening of cooperative institutions in Punjab
PACS are village-level cooperative credit bodies undergoing computerization, diversification into various service centers, and governance reforms through model bye-laws to enhance inclusivity and efficiency in rural India.
Multi-Purpose Cooperative Societies in Rajasthan
PACS are the foundational units of India's cooperative credit system, providing essential agricultural loans and services to farmers. Recent government efforts, including the computerization project, aim to improve their operational efficiency and transparency, crucial for rural financial inclusion.
Try these PYQs
Consider the following statements:
1. In terms of short-term credit delivery to the agriculture sector, District Central Cooperative Banks (DCCBs) deliver more credit in comparison of Scheduled Commercial Banks are Regional Rural Banks
2. One of the most important functions of DCCBs is to provide funds to the Primary Agricultural Credit Societies.
Which of the statements given above is/are correct?
Statement 1 is incorrect. In terms of short-term credit delivery to the agriculture sector, Scheduled Commercial Banks (SCBs) and Regional Rural Banks (RRBs) generally deliver more credit compared to District Central Cooperative Banks (DCCBs). SCBs and RRBs have a larger network and resources to provide credit to the agriculture sector. Statement 2 is correct. One of the primary functions of DCCBs is indeed to provide funds to the Primary Agricultural Credit Societies (PACS). DCCBs act as the intermediary between the Reserve Bank of India (RBI) and PACS, facilitating the flow of credit from the central bank to the grassroots level through cooperative credit institutions. Hence, option B is the correct answer.
Which of the following grants/ grant direct credit assistance to rural households?
1. Regional Rural Banks
2. National Bank for Agriculture and Rural Development
3. Land Development Banks
Select the correct answer using the codes given below:
1. Regional Rural Banks (RRBs): RRBs are established to provide credit and banking facilities to rural areas, especially to small and marginal farmers, agricultural laborers, and rural artisans. They grant direct credit assistance to rural households. 2. National Bank for Agriculture and Rural Development (NABARD): NABARD primarily provides refinance facilities to banks and financial institutions for lending to rural sectors. It does not directly lend to rural households, except in very limited cases through pilot schemes. 3. Land Development Banks (LDBs): LDBs provide long-term credit to farmers for land development and agricultural improvements. They grant direct loans to rural households.
In India, which of the following can be considered as public investment in agriculture?
1. Fixing Minimum Support Price for agricultural produce of all crops
2. Computerization of Primary Agricultural Credit Societies
3. Social Capital development
4. Free electricity supply to farmers
5. Waiver of agricultural loans by the banking system
6. Setting up of cold storage facilities by the governments
Select the correct answer using the code given below:
Public investment in agriculture refers to government expenditures aimed at improving the agricultural sector, including infrastructure development, technological improvements, and providing institutional support. Statement 1 is incorrect: Fixing the Minimum Support Price (MSP) is a policy decision, not an investment. While it affects the agricultural sector, it is not a direct public investment in terms of capital expenditure. Statement 2 is correct: The computerization of Primary Agricultural Credit Societies (PACS) is a public investment because it involves government funds directed towards modernizing agricultural credit systems, enhancing efficiency, and accessibility for farmers. Statement 3 is correct: Social Capital development is a public investment in agriculture, as it involves building networks and community-based resources that help farmers improve productivity and access to resources. Statement 4 is incorrect: Free electricity supply is more of a subsidy, not a direct public investment in the form of capital expenditure. Statement 5 is incorrect: Waiver of agricultural loans is a policy measure aimed at alleviating farmer debt but does not qualify as an investment in infrastructure or capital. Statement 6 is correct: The setting up of cold storage facilities by the government is a direct public investment aimed at improving agricultural infrastructure and reducing post-harvest losses. Hence, option C is the correct answer.
With reference to organic farming in India, consider the following statements:
1. The National Programme for Organic Production' (NPOP) is operated under the guidelines and directions of the Union Ministry of Rural Development.
2. The Agricultural and Processed Food Products Export Development Authority' (APEDA) functions as the Secretariat for the implementation of NPOP.
3. Sikkim has become India's first fully organic State.
Which of the statements given above is/are correct?
Statement 1 is Incorrect: The National Programme for Organic Production (NPOP) is operated under the guidelines and directions of the Ministry of Agriculture and Farmers Welfare (MoA&FW), not the Ministry of Rural Development. Statement 2 is Correct: The Agricultural and Processed Food Products Export Development Authority (APEDA) does function as the Secretariat for the implementation of NPOP. APEDA plays a crucial role in promoting and certifying organic products in India. Statement 3 is Correct: Sikkim has indeed become India's first fully organic State. This achievement signifies India's efforts to promote sustainable agricultural practices. Therefore, the correct answer is 2 and 3 only.
Programme/ Project Ministry
1. Drought-Prone Area Programme: Ministry of Agriculture
2. Desert Development Programme: Ministry of Environment and Forests
3. National Watershed Development Project for Rainfed Areas: Ministry of Rural Development
Which of the above pairs are correctly matched?
Pair 1 is not correct: The drought prone area programme comes under Ministry of Rural Development. This programme aims to mitigate the impacts of droughts on crop production, livestock, land and water resources. Pair 2 is not correct: The Desert Development Programme comes under Ministry of Rural Development. The basic objective of the Desert Development Programme is to minimise negative effect of drought and control desertification. Pair 3 is not correct: The national watershed project for rainfed areas implemented by Ministry of Agriculture is an umbrella scheme under Pradhan Mantri Krishi Sinchayi Yojana.
Show 6 more PYQs
With reference to ‘Initiative for Nutritional Security through Intensive Millets Promotion’, which of the following statements is/are correct?
1. This initiative aims to demonstrate the improved production and post-harvest technologies and to demonstrate value addition techniques, in an integrated manner, with a cluster approach.
2. Poor, small, marginal and tribal farmers have a larger stake in this scheme.
3. An important objective of the scheme is to encourage farmers of commercial crops to shift to millet cultivation by offering them free kits of critical inputs of nutrients and micro-irrigation equipment.
Select the correct answer using the code given below.
Statement 1 is correct. The Initiative for Nutritional Security through Intensive Millets Promotion aims to demonstrate improved production and post-harvest technologies in an integrated manner with a cluster approach. Statement 2 is also correct. Millets are mainly grown in regions of low annual rainfall and poor arid soil. It is inadequate, small, marginal and tribal farmers, who cannot afford costly irrigation practices, depend on the cultivation of millets. Hence these farmers benefit from the scheme and have a larger stake in this scheme. Statement 3 is not correct. There is no such provision to encourage commercial crop farmers to shift to millet cultivation.
Under the Kisan Credit Card scheme, short-term credit support is given to farmers for which of the following purposes?
1. Working capital for maintenance of farm assets
2. Purchase of combine harvesters, tractors and mini trucks.
3. Consumption requirements of farm households
4. Post-harvest expense
5. Construction of family house and setting up of village cold storage facility.
Select the correct answer
Under the Kisan Credit Card (KCC) scheme, short-term credit support is provided to farmers for purposes that directly support agricultural activities and the farm household. Statement 1 is correct. The KCC scheme provides working capital for the maintenance of farm assets, which includes things like irrigation, fertilizers, and labor costs. Statement 2 is incorrect. The KCC scheme does not cover the purchase of capital-intensive assets such as combine harvesters, tractors, and mini trucks. These are typically financed through long-term loans, not short-term credit. Statement 3 is correct. The KCC scheme provides credit for consumption requirements of the farm household, like daily needs and family expenditures. Statement 4 is correct. The KCC scheme can also be used for post-harvest expenses, including costs for storage, transportation, and marketing of produce. Statement 5 is incorrect. The construction of a family house and setting up of village cold storage facilities are not covered under the KCC scheme, as these are typically considered long-term capital expenditures. The list of eligible activities for KCC are:
- To meet the short-term credit requirements for cultivation of crops
- Post-harvest expenses, - Produce marketing loan - Consumption requirements of farmer household. - Working capital for maintenance of farm assets band activities allied to agriculture like dairy animals, inland fishery etc. - Investment credit requirement for agriculture and allied activities like pumpsets, sprayers, dairy animals etc. Hence, option B is the correct answer.
Consider the following statements:
1. The Accelerated Irrigation Benefits Programme was launched during 1996-97 to provide loan assistance to poor farmers.
2. The Command Area Development Programme was launched in 1974-75 for the development of water-use efficiency.
Which of the statements given above is/are correct?
Statement 1 is incorrect: The Accelerated Irrigation Benefits Programme (AIBP) was indeed launched during 1996-97, but its objective was to provide central assistance to states to accelerate the pace of irrigation development, not specifically to provide loan assistance to poor farmers. Statement 2 is correct: The Command Area Development Programme (CADP) was launched in 1974-75, its primary focus was on improving the water-use efficiency and agricultural productivity in the command areas of major and medium irrigation projects.
Consider the following statements:
1. In the case of all cereals, pulses and oil-seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India.
2. In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise.
Which of the statements given above is/are correct?
Statement 1 is incorrect: Procurement at MSP is not "unlimited." While the government provides an open-ended procurement policy for certain cereals (like rice and wheat) in specific states, for most pulses and oilseeds, procurement is capped by targets, storage capacity, and the Price Support Scheme (PSS) guidelines. Statement 2 is incorrect: MSP is designed as a safety net (floor price), not a price ceiling. It does not prevent market prices from rising higher due to demand. Note on MSP Calculation: As per the Union Budget 2018-19, the Government of India follows the principle of fixing MSP at a level of at least 1.5 times the all-India weighted average cost of production (A2+FL). This formula is recommended by the Commission for Agricultural Costs and Prices (CACP) to ensure a minimum 50% return over the cost of production for farmers.
In the context of India’s preparation for Climate-smart Agriculture, consider the following statements:
1. The ‘Climate-Smart Village’ approach in India is a part of a project led by the Climate Change, Agriculture and Food Security (CCAFS), an international research programme.
2. The project of CCAFS is carried out under Consultative Group on International Agricultural Research (CGIAR) headquartered in France.
3. The International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) in India is one of the CGIAR’s research centres.
Which of the statements given above are correct?
Statement 1 is correct. The Climate-Smart Village (CSV) approach is an initiative under the CCAFS program, which focuses on improving climate resilience in agriculture through research and innovation. CCAFS operates in multiple countries, including India, and works on sustainable farming practices, resource efficiency, and climate adaptation strategies in rural areas. Statement 2 is correct. CCAFS is a global research initiative under the Consultative Group on International Agricultural Research (CGIAR), which is a network of international agricultural research organizations. However, CGIAR’s global headquarters is in Montpellier, France, making the statement factually accurate. Statement 3 is correct. ICRISAT, based in Hyderabad, India, is a major research institute focusing on improving dryland agriculture. It is indeed one of the CGIAR’s 15 global research centers, working on climate resilience, crop improvement, and food security in semi-arid regions.
Consider the following statements :
Statement-I : According to the United Nation's 'World Water Development Report, 2022', India extracts more than a quarter of the world's groundwater withdrawal each year.
Statement-II :India needs to extract more than a quarter of the world's groundwater each year to satisfy the drinking water and sanitation needs of almost 18% of world's population living in its territory.
Which one of the following is correct in respect of the above statements?
* Statement 1 is correct. According to the United Nations World Water Development Report 2022, with an estimated 251 km3 annual withdrawal from an estimated 20 million wells and tube wells, India is the world's greatest groundwater user. This accounts for more than a quarter of the total groundwater extracted internationally. * Statement 2 is incorrect. India uses about 89% of this groundwater for irrigation. Major share of total groundwater extracted by India is utilised for irrigation purposes and not for drinking and sanitation purposes.