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The share of co-operatives in rural credit, which once stood at 60 per cent in 1990, has now declined to a paltry 15 per cent and therefore there is an urgent need to revitalise primary agricultural co-operatives (PACs) by converting them into multi-service centres, according to Jiji Mammen, the Chief General Manager of the NABARD, Hyderabad.
He was speaking here on Wednesday at the inaugural of a three-day workshop and awareness programme organised by the NABARD, the AP Co-operative Bank (APCOB) and the Visakhapatnam district central co-operative bank for the benefit of the PACs.
He said after the submission of the Vaidyanathan Committee report in 2004-05 a sum of Rs 1800 crores had been infused into the co-operative system in Andhra Pradesh and subsequently there was also the loan waiver scheme by the UPA Government. It enabled many PACs to come out of the red and they could be converted into multi-service centres for diversifying their activities and lending to different economic activities in the rural areas. "Still, a lot needs to be done both in Telangana and Andhra Pradesh to revitalise the PACs. Certain districts such as Nizamabad in Telangana have made considerable progress, whereas Visakhapatnam has a long way to go," he said.
He said credit discipline was absolutely necessary and the PACs should achieve at least 50 per cent loan recovery to enable them to function as multi-service centres by availing themselves of the refinance facility offered by the NABARD. Then they would be able to get finance at 11 per cent or so from the district co-operative bank and they can give term loans at 13 or 14 per cent. "It is not enough if PACs give only crop loans, as the margin is very less. They should be in a position to give term loans to various economic activities in the rural areas such as poultry, procurement of paddy, warehouse construction and related activities. Their financial health depends on these activities," he said.
T. Praveena, the district co-operative officer, pleaded for relaxation of norms to lend liberally to farmers in the rural areas. K. Tulasi Prasad, the Deputy General Manager of the APCOB, regretted that co-operatives were in a poor shape in spite of several steps taken to revitalise them after the submission of the Vaidyanathan committee report.
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