Rs. 5.03-crore package for their revival
Centre to bear Rs. 4.71 crore and State Government Rs. 32.62 lakh
KCGCS not be eligible for benefits: report
MADIKERI: The Vaidyanathan Committee report, which is aimed at reviving the short-term cooperative credit structure involving primary agriculture cooperative societies (PACS), will benefit 24 PACS, which are called as Vyavasaya Seva Sahakara Sangha Niyamita (VSSSNs) in Kodagu, to the tune of Rs. 5.03 crore.
The package recommended by the Vaidyanathan Committee is aimed at reviving the short-term rural cooperative credit structure (CCS) by wiping out the accumulated losses of PACS and make them a well managed, vibrant medium to serve the credit needs of rural India, especially small and marginal farmers. As many as 24 PACS, nine in Madikeri taluk, eight in Somwarpet taluk and seven in Virajpet taluk, will benefit from the package in the district. Of the Rs. 5.03 crore, the Centre will bear Rs. 4.71 crore, which pertains to 100 per cent loss arising out of the agriculture credit business of PACS. The State Government will bear Rs. 32.62 lakh, which will be 50 per cent of the losses incurred by PACS, pertaining to loss in business arising out of sale of fertilizers, agriculture implements, loans given to public distribution system agencies and others, Managing Director of Kodagu District Central Cooperative (KDCC) Bank A.C. Diwakar told The Hindu on Thursday.
The accumulated loss of PACS in Kodagu, pertaining to direct advances made by them or invested on their own in any business stood at Rs. 1.17 crore, which would have to be borne by PACS themselves, he said.
However, the fate of the Kodagu Coffee Growers’ Cooperative Society (KCGCS), which functions on the lines of PACS, remains uncertain. It has an accumulated loss of Rs. 14 crore. According to the Vaidyanathan Committee report, KCGCS will not be eligible for benefits. But it is learnt that based on the request of the KCGCS, the Government is mulling over the proposal submitted by it to waive the losses.
The Governor signed the Vaidyanathan Committee proposal submitted by the State Government a couple of days ago by amending the Karnataka Cooperative Societies Act. It had become an Ordinance now, Mr. Diwakar said. The liability for funding the financial package would be shared by the Centre, State Government and the CCS based on the origin of loss and existing commitments.
The package seeks to provide financial assistance to bring the loss-making PACS to an acceptable level of health, introduce legal and institutional reforms for their democratic, self reliant and efficient functioning, and take measures to improve the quality of management. All these components will be equal in importance and implemented as an integrated package. The proposed financial assistance will be one time. The States have been given the option whether to participate or not in the package. Financial restructuring will start with bringing PACS through cleansing of the balance sheets and strengthening capital base. There are 68 VSSSNs in Kodagu.
Assistance under the package will be available for wiping out the accumulated losses, covering invoked, but un-paid and un-invoked guarantees given by the State to the CCS and increasing the capital to a specified minimum level. In order to ensure that the CCS continued on a sound financial, managerial and governance norms technical assistance will also be provided to upgrade institutional and human resources of the CCS.