Full Form of PACS

The full form of PACS is Primary Agricultural Credit Societies. PACS is the ground-level co-operative society that helps on credit to the farmers for the various agricultural and farming activities by providing agricultural, short-term, and medium-term purpose loan requirements to its members. It majorly focuses on gram panchayats and village-level farmers.

PACS helps its members to gain access to various financial or credit facilities, including assistance in the form of cash, storage facility or getting agricultural equipment and implements on hire basis. It is the body in India that acts as the link between the borrowers and the financing authorities, including the Reserve Bank of India (RBI) or National Bank For Agriculture and Rural Development (NABARD), etc.

The full form of PACs is Primary Agricultural Credit Societies. The name itself implies the reason behind the formation of this body in India. These are the credit structures developed at the grass root level for financial assistance to the people belonging to that level. PACS offer loans to the people in need and collect repayments from them. The finance they offer to borrowers comes from the higher financial authorities, like RBI, NABARD, etc.

PACS organizes at the village level or a group of small villages with the main purpose of helping the members of the society in their agricultural work. It helps fulfill the financial requirements of its members, so it should not stop their work due to the unavailability of the finances. It gives the farmers the loan requirements for agricultural, short-term, and medium-term purposes, thus helping them grow their businesses.

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The purpose with which PACS has been established are as follows:

• The PACS should provide the loan only to its members, the repayment schedule of which can be decided based on the purpose and tenure for which the members take the loan. Also, one should give the loan only for short and medium-term purposes.
• The PACS area should be limited only to the village level to which it belongs and for the benefit of its members.
• It should be of common interest if all the members of society and society demand all of its members’ contributions.
• One should give society membership only to those in the village where the credit society is established. Furthermore, there should be an unlimited liability for all PACS members.
• For the deposits as well as the loan which are there on its account, PACS is liable.

PACS is a unique initiative taken by the Government of India. However, there are certain traits that must be known to understand the reason behind this body being so unique. The characteristics of PACS, one of the most important entities in India helping the agriculturists and farmers grow, are as follows:

• The Primary Agricultural Credit Societies are the association of persons, unlike in the case of the Joint Stock Companies, where there is an association of capital.
• Association of persons in Primary Agricultural Credit Societies confers an equal level of rights on all society members without considering their holding of share and their social standing.
• Share of the societies is of small value so that poor persons can also become its members.

PACS is an organized body, segmented inti four divisions with different responsibilities. Let us have a look at what each division is accountable for:

• General Body of PACS: The general body members are the supreme authority for any the society and exercise control overboard and management. It has complete control over them and hence it has a significant role in the decision-making.
• Management Committee: The general body elects them to perform the work prescribed by the society’s rules, acts, and by-laws.
• Chairman, Vice-Chairman, and Secretary: Among the members, few appoint to the managing position as Chairman, Vice-Chairman, and Secretary of the society. They work for the benefit of the members by performing their roles and duties as assigned to them.
• Office Staff: These are the people responsible for performing their daily work. It includes clerks, peons, and supportive staff.

PACS has an important role to play in developing the section of the society that fully depends on agriculture but does not get an opportunity to grow because of financial restrictions or constraints. Listed below are the roles of this body in ensuring the progress of the agrarian population. Let us a have a look at them below:

• It is the basic unit organized at the village’s grass-root level with the main role of dealing with agricultural borrowers of the village by giving agricultural, short-term, and medium-term purpose loans to the borrowers and then collecting the repayments against those loans.
• They act as a link between the country’s higher financial agencies, who can resolve various issues of the members and the ultimate borrowers. It is important because it is very difficult for the farmers to directly approach the higher financial agencies for their problems. Thus, PACS helps them in that matter.

PACS serves a myriad of functions from taking care of the minor needs of the borrowers to ensuring the agrarian society progresses. Some of the functions of PACS are as discussed below:

• The main function of the PACS is to provide short and medium-term purpose loans to its members.
• Borrowing an adequate amount of funds from central financial agencies to help its members on time.
• It helps promote the economic interest of all its members, considering the society’s principality.
• Maintaining the supply of the hired light machinery for agricultural purposes.
• It is to promote savings habits among its members.
• Another function of the PACS is to arrange for supplying agricultural inputs. Examples of agricultural inputs include seeds, fertilizers, insecticides, etc. Along with this, they also supply required domestic products like kerosene, etc.
• It helps its members by providing marketing facilities that could enhance the sale of their agricultural products in the market at reasonable prices.

There are various advantages that PACS offers to borrowers from the grass root level. Let us have a quick look at some:

• Primary Agricultural credit society helps the farmers get credit for agricultural, short-term, and medium-term purposes and government-related funds distribution to eligible farmers.
• These credit societies also help implement government schemes related to farmers at their level and observe whether these schemes are attaining the purpose or not.
• PACS acts as a link between the higher financial agencies of the country who can resolve various issues of the members and the ultimate borrowers, thereby helping resolve the farmers' problems.

Though PACS offer a lot of benefits, it is not devoid of flaws. Given below are some of the limitations of the body for a better idea:

• Organizational Weakness: Though this cooperative society covers the major portion of the villages, there are still a few parts of villages, especially on the northeast side, not covered in this scheme. Thus, this may be a disadvantage.
• Over Dues: The larger over dues of this scheme are from landowners than the small cultivators. It means an undue advantage was taken by a few of the stronger farmers in the village against this scheme.
• Lack of Resources: No appropriate resources were given to the short-term and medium credits. Hence inappropriate resources cause a disadvantage to the scheme.

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This has been a guide to what is the Full Form of PACS. Here, we explain Primary Agricultural Credit Societies with objectives, features, role, and functions. You may refer to the following articles to learn more about finance: -

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