Implications of Model Byelaw of PACS in Kerala – Cooptalks

Cooperatives in Kerala by Cooptalks

The state of Kerala has a very strong cooperative movement. It can be classified into short-term cooperative credit structure and long-term cooperative credit structure and non-agricultural credit cooperatives. 2082 primaryagricultural credit societies/farmers service cooperative societies/ rural cooperative societies/banks /agricultural improvement societies and 76 primary
cooperative agricultural and rural development banks (PCARDBs) are providing short-term and long-term credit to the farmers respectively.  Cooptalks brings a deeper study of this for you.

Both the Kerala State Cooperative Bank and Kerala Cooperative Agricultural and Rural Development Banks are refinancing the primaries to sustain agricultural lending. 165 urban cooperative banks (both under Banking Regulations Act and
others) and 911 employees credit societies are serving its members.. Further the non-credit cooperative movement has many innovative cooperatives such as 98 hospital and dispensary cooperatives, 157 college cooperatives, 288 housing cooperatives, 1110 coir cooperatives, 20 consumer cooperatives, 3328 milk cooperatives, 657 fisheries cooperatives, 25 youth cooperatives, tourismcooperatives, information technology cooperatives etc.

Uniqueness of PACS in Kerala

1. PACS in Kerala are mostly called service/primary cooperative banks (SCB). They mobilize deposits and lend money to the members.
2. The PACS carry out several non-banking businesses like input supply(distribution of seeds, seedlings, fertilizers, pesticides, manures, agricultural implements, and so on), providing production support system(bunding and levelling of lands, desilting and tilling of lands, planting, irrigation, weeding, manuring, protection and harvesting), processing and marketing of agricultural produce(paddy processing, coconut processing etc.,) , running of fair price shops, textile shops, health clinics, laboratories, computer and secretarial services, petrol bunks, supermarkets, Ambulance Services, etc.,)
3. Mostly they do business both banking and non-banking with their own funds and are dependent on their federal organisations. Since, Kerala adopts two tier short term credit structure, they are all members of the state cooperative bank (Keralabank).
4. Membership of the Kerala PACS includes individual members, any other society, a local self-government, the government, and any body of persons, whether incorporated or not and whether or not established by or under any law, if such body is approved by the government in this behalf by general or special order.
5. Section 14 A of the Kerala Cooperative Societies Acts states that ‘A co- operative society may by a resolution passed at general body meeting by a majority of members present and voting, promote one or more subsidiary institutions, which may be registered under any law for the time being in force, for the furtherance of its stated objects with the prior approval of the Registrar’.
6. Section 14 B of the Kerala Cooperative Societies Acts states that ‘Any two or more co-operative societies with prior permission of the Registrar, may by resolution passed by the majority of the members present and voting at a general body meeting of each of such co-operative societies, may enter into partnership to carry out any one or more specific business.
7. The PACSs may participate in consortium lending schemes promoted by the government.
8. The recruitment of employees of the PACS is undertaken through the Co-operative Service Examination Board.
9. The Board of Directors are elected through a democratic process by the State Co-operative Election Commission.

Uniqueness of PACS Model Byelaw

The Ministry of Cooperation, Government of India has issued a Model bylaw on 5 th January 2023.

1. The Model Byelaw is highly inclusive and permits the PACS to carryout agriculture and rural development activities for vibrant and sustainable development.
2. The following proposed objectives of the PACS in India will take the cooperative movement in a new direction.
3. The model byelaw envisages a provision for admitting state government or any other government body as members in addition to the individuals.
4. The model bylaw further ensures participation of the following underprivileged segments in the Board
   a. Scheduled Castes
   b. Scheduled Tribe
   c. Women and
   d. Small and marginal farmer members of the Society
5. In order to professionalise the management of cooperatives, the Board of Directors may decide to induct/ co-opt maximum up to two professional
6. directors having experience and expertise in the field of agriculture and allied activities.
7. Democratic management of cooperatives is possible through the provision, ‘The Board of Directors may constitute sub-committees such as Village Committee, Finance and Audit Committee, recruitment/ Selection/ Appointment Committee, Youth/ Women Committee, Business/ Trade Promotion and Entrepreneurship/ Industrialization Committee, Sustainable/ Community Development Committee.
8. The byelaw facilitates the organisation of subsidiary enterprises like Farmer Producer Organizations with 100% funding from the Society for the furtherance of its stated objectives, and such organisations may be registered under any law for the time being in force, as approved by the
   General Body.

Implications of Model Byelaw of PACS in Kerala

The Model Byelaws will have following impact in the development of cooperative movement in the state of Kerala ;

1. Integrated Rural Development: Since the PACSs are utilising the local resources and are involved in all the productive functions of the village economy, they will act as catalysts of economic transformation.
2. Inclusive Growth: The Government of India’s vision of ‘SabkaSaath, SabkaVikas’is possible by implementing the new model bylaw throughthe respective PACSs. Since the intended activities include every citizen of that locality, no one will be excluded from the economic development
   process. Ultimately the people will be empowered economically, socially and politically.
3. Cooperativisation of Rural Economy : ‘The main mandate of the Ministry of Cooperation is realization of vision ‘from cooperation to prosperity’, strengthening of cooperative movement in the country & deepening its reach up to the grassroots, promotion of cooperative-based economic development model and creation of appropriate policy, legal and institutional framework to help cooperatives realize their potential.’ The model byelaw is in line with the above objective and if implemented properly, cooperativisation of rural economy is possible and within our reach.
4. Value Addition of Agricultural Produces and Warehousing : Doubling farmers’ income is the prime motto of the government. The major impediment for accomplishing the vision is lack of an effective
   arrangement for value addition and storing of agricultural produce for
   better realization of the price. This initiative of the government will be of
   great help in strengthening the cooperative movement. Many programs
   have been started for processing and warehousing through the PACSs.

5. Cooperative Education: The Government wants to build a $5trillion economy with the strategy of Atmanirbhar Bharat (Self-reliant India). As part of the strategy, the Government of India declared AmritKaal with a long-term perspective. Professionalizing cooperative education is the need of the hour. The model bye-law gives an added impetus to strengthen cooperative education.