GOVERNMENT OF PUNJAB

DEPARTMENT OF COOPERATION

Material for Speech of Hon,ble Chief Minister of Punjab for

the Annual Plan 2013-14.

Overview

Cooperatives in Punjab have played a significant role not only

in ushering in green and white revolution but also in
sustaining the same. The Cooperative Department has taken
various measures to increase efficiency in operations with the
object to reduce the cost of services to the farmers and to help
them in diversification of their activities.
1. Financial /Physical Progress on the projects /Schemes during the
11th Five Year Plan
Milkfed :-
Milkfed operates with the objective of promoting
production,procurement processing and marketing of milk
and milk products for economic development of dairy
farmers Milkfed, Punjab has strong network of about 7103
milk producers Cooperative Societies at Village level
having more than 4.04 lacs Milk Producers members.
a) Financial Assistance to Dairy Cooperatives for
rehabilitation of Milk Unions:
Govt. of India has sanctioned a project for 6 weak
Cooperative Milk Unions identified under the scheme with
a total outlay of 75.68 Crores for their rehabilitation. A sum
of Rs.42.40 Crores has been released by Govt. of India and
Govt. of Punjab on 50:50 sharing basis. These funds have
 been utilized for up gradation of Plant & Machinery,
procurement and marketing infrastructure.
b) Strengthening Infrastructure for quality & clean Milk
Production:
To improve the quality of fresh milk the Govt. of India has
sanctioned a project under the scheme “Strengthening
Infrastructure for Quality & clean Milk Production” for 8
Cooperative Milk Plants with total outlay of Rs.22.68
Crores for installation of 157 Bulk Milk coolers and other
equipments at village level Milk Producers’ Cooperative
Societies. Till date a sum of Rs.12.79 Crores has been
released by Govt. of India and Govt. of Punjab on 75:25
sharing basis. 102 Bulk Coolers have been installed so far
with this amount.
c) Financial Assistance to Dairy Cooperatives for providing
Milking Machines & Milking Parlours. C.N-02/03
The objective of the Scheme is to improve the yield of Milk
& Health of calves. This is a State Plan Scheme. During
the period 2010-11, 400 milking machines have been
provided to milk producers at 50% subsidized rates during
the year 2011-12 a sum of Rs.0.50 lac has been received
against budgeted provision of Rs.100.00 lacs. During the
year 2012-13 no amount has been received under the
scheme.
d) Financial Assistance to Dairy Cooperatives for making
silage pits for milk producers C.N-03/05
To meet the shortage of green fodder during the month of
May-June and Oct.-November it is proposed that silage
making pits should be encouraged to check the downfall
during these months. This is a State Plan Scheme. Under
this scheme subsidy @ 50% is provided to Milk producers
 & Dairy Farms to make pucca silage pits for storage of
fodder. During the year 2011-12, a sum of Rs.0.50 lacs has
been received against budgeted provision of Rs.100.00 lacs.

e) Centrally sponsored Fodder and Feed Development

Scheme of Govt.of India.

This is a Centrally sponsored scheme being funded by

Govt.of India and Govt.of Punjab in the ratio of 75.25.The
scheme is being implemented through Animal Husbandary
Department of Govt.of Punjab under this scheme,hand
driven & machine driven cheff cutters are to be provided to
milk producers and also subsidy to be provided for making
silage pits. Govt.of India has sanctioned this project with
total outlay of Rs.378.75 lacs in the year 2010-11 out of
which Rs.189.37 lacs has been disbursed to Milkfed.

f) WEAVCO

Financial achievement during the 11th five years plan is as

under:
(Amt in lacs)
year Name of the scheme Fund received from Expenditure
GOI
State Centre

2007- Nil Nil Nil Nil

08
2008- CS (CN)-7 15.00 15.00 Rs.30.00
09 Assistance to Apex and Lacs has
Primary handloom weavers been
Cooperative Societies received by
under Deen Dyal Weavco.
Hathkrgha Protsahan
Yojna (50:50)
 2009- CS (CN)-6 Nil 14.45 Rs.14.45
10 Financial assistance to Lacs has
handloom agencies as One been
time rebate @ 10% on the received by
sale of handloom Weavco
product(100%).

2010- CS (CN)-6
11 Financial assistance to Nil Rs.10.94
handloom agencies as One 10.94 Lacs has
time rebate @ 10% on the been
sale of handloom received by
product(100%). Weavco

2011- Nil Nil Nil Nil

12

2. Finacial & Physical achievement during the year 2012-13

MILKFED
a) Financial Assistance to Dairy Cooperatives for
rehabilitation of Milk Unions:
Govt. of Punjab has released Rs.5.00 Crores on 29.3.2013.
NDDB has been requested to release matching share
already released by Govt. of India. These funds will be
utilized for up gradation of Plant & Machinery,
procurement and marketing infrastructure.

b) C.N-05 “ Financial Assistance to Dairy Cooperatives for

Strengthening/augmentation of dairy processing and
production capacities in Cooperative Sector” in Punjab.
This is new State Plan Scheme and during the year
2012-13 budgetary provision for Rs.16.00 Crores was made
for modification of Ludhiana and Jalandhar Plants so as to
ensure viability and growth of Milk Union by converting
 surplus milk into products and ensure their maketing. Out
of this, only Rs.5.00 Crores have been released on
30.3.2013.

3. With regard to issues and constraints which require the

attention of State Government for taking up with the
Govt.of India are reported as under :-

Rate of interest on re-finance by NABARD

As per directions of Government of India/NABARD, the short term
agriculture loans are being advanced @ 7% with effect from
1.4.2006.The rate of interest on re-finance from NABARD which was
available at 2.5% in the year 2006-07 has been enhanced to 3% in the
year 2007-08, 3.5% in the year 2008-09, 4% in the year 2009-10 and
4.5% in the year 2011-12. The increase in rate of interest on refinance
has adversely affected the profitability of Central Coop. Banks and
PACS. Since the PACS in the three-tier structure of Cooperative Credit
System are playing a pivotal role in providing multifarious and
extremely useful services to the farmers, therefore, in order to strengthen
the PACS and the cooperative credit system in the State of Punjab,
NABARD may be stressed upon to reduce the rate of interest on
refinance to 2.5% as applicable on 1.4.2006.

Exemption from Section 80(P) of Income Tax Act 1961 to

Cooperative Banks.

With the amendment of Finance Act,2006, the income of Central

Cooperative Banks have been brought into the ambit of Income Tax Act.
Since Central Cooperative Banks are providing short term agriculture
loans to the PACS at 5% rate of interest for further lending to the
farmers at 7%, therefore, these banks are functioning at a very thin
margin. Levy of Income tax on the income of these banks has further
aggravated their financial position. Govt. of India may therefore be
stressed upon to restore exemption for payment of Income Tax under
section 80(P) of the Income Tax Act to the Central Cooperative Banks
as available before amendment of Finance Act,2006.

Interest Subvention Scheme of G.O.I for Crop Loan.

In order to compensate the Cooperative Banks for providing
Agriculture loans @ 7% to the farmers, Government of India has
introduced a scheme of interest subvention in the year 2006-07.
Government of India was providing interest subvention @ 2.0% in the
year 2006-07 which was enhanced to 3% in the year 2008-09, but
subsequently, interest subvention was again reduced to 2% in the year
2009-10 and further reduced to 1.50% in the year 2010-11. Now the
interest subvention has marginally increased to 2.0% during the year
2011-12.
Therefore, it is requested that Government of India may be
prevailed upon to enhance the interest subvention in the same ratio at
which the rate of interest on refinance is enhanced by NABARD.
A special scheme should be formulated to allot cooking gas
agencies to PACS in the rural area. This will not only strengthen the
Cooperatives but will also prove to be a boon to the rural masses.
Besides the above, the issues raised by Hon,ble Chief Minister
Punjab with the Finance Minister Government of India vide his
D.O No.FCC.12/451 dated 14th March,2012 is being attached
herewith for information.
 Milkfed has procured on an average 12.30 lac ltrs of Milk per
day against 11.47 lacs ltrs of milk per day during the year
2011-12.
 There is enough improvement in city supply and Milkfed has
been able to market on an average 8.63 lac ltrs of milk per
day during the year 2012-13 in comparison of 8.60 lac litres
per day during last year 2011-12.
 Apart from liquid milk, other milk products like
Ghee,Paneer,Curd,Kheer, Plan & Namkeen Lassi, indigenous
sweets, UHT Milk, Sweet Lassi, Sweet flavoured milk, Ice
cream, Milk Powder, etc. are also made available to the
consumers at reasonable price.
 To make available quality Cattle feed to the Milk Prosducers,
Milkfed has two Cattle Feed Plants having a capacity of 300
TPD. By taking financial assistance from NDDB the work of
expansion of capacity of these Plants to 500 MT/PD has been
entrusted.
 During the year 2012-13 the Federation exported milk
products to the tune of Rs. 17.22 crores (upto Feb,2013) in
comparison of Rs.16.50 Crores during the year 2011-12.
 Milkfed has implemented a project for establishment of
Integratged Buffalo Development Centres (IBDC) through
NGOs i.e. M/S J.K. Trust and M/S BAIF funded under RKVY
Till February,2013 these IBDC,s have done 4.54 lacs A.I,s
and 85994 calves have been delivered.
  To meet increasing demand of city supply, the job for
enhancing the milk handling capacity of Milk Plant Mohali
from existing 3.L.L.PD to 5 L.L.PD handling has been
awarded to NDDB on turnkey basis.
 The Net profit of Milkfed and affiliated milk Union for 2011-12
is Rs.26.96 Crores and during the current year (upto
Feb,2013) Profit is to the tune of Rs.2.07 Crores.
 There is no pending issue regarding Milkfed to be raised by
the Hon,ble Chief Minister of Punjab during this meeting.

WEAVCO
(Amt in lacs)
year Name of the scheme Fund received from Expenditure
GOI

State Centre

2007- Nil Nil Nil Nil

08
2008- CS (CN)-7 15.00 15.00 Rs.30.00
09 Assistance to Apex and Lacs has
Primary handloom weavers been
Cooperative Societies received by
under Deen Dyal Weavco.
Hathkrgha Protsahan
Yojna (50:50)

2009- CS (CN)-6 Nil 14.45 Rs.14.45

10 Financial assistance to Lacs has
handloom agencies as One been
time rebate @ 10% on the received by
sale of handloom Weavco
product(100%).

2010- CS (CN)-6
11 Financial assistance to Nil Rs.10.94
handloom agencies as One 10.94 Lacs has
time rebate @ 10% on the been
sale of handloom received by
product(100%). Weavco

2011- Nil Nil Nil Nil

12
 2012- Nil Nil Nil Nil
13

3. With regard to issues and constraints which require the

attention of State Government for taking up with the
Govt.of India are reported as under :-

Rate of interest on re-finance by NABARD

As per directions of Government of India/NABARD, the short term
agriculture loans are being advanced @ 7% with effect from
1.4.2006.The rate of interest on re-finance from NABARD which was
available at 2.5% in the year 2006-07 has been enhanced to 3% in the
year 2007-08, 3.5% in the year 2008-09, 4% in the year 2009-10 and
4.5% in the year 2011-12. The increase in rate of interest on refinance
has adversely affected the profitability of Central Coop. Banks and
PACS. Since the PACS in the three-tier structure of Cooperative Credit
System are playing a pivotal role in providing multifarious and
extremely useful services to the farmers, therefore, in order to strengthen
the PACS and the cooperative credit system in the State of Punjab,
NABARD may be stressed upon to reduce the rate of interest on
refinance to 2.5% as applicable on 1.4.2006.

Exemption from Section 80(P) of Income Tax Act 1961 to

Cooperative Banks.

With the amendment of Finance Act,2006, the income of Central

Cooperative Banks have been brought into the ambit of Income Tax Act.
Since Central Cooperative Banks are providing short term agriculture
loans to the PACS at 5% rate of interest for further lending to the
farmers at 7%, therefore, these banks are functioning at a very thin
margin. Levy of Income tax on the income of these banks has further
aggravated their financial position. Govt. of India may therefore be
stressed upon to restore exemption for payment of Income Tax under
section 80(P) of the Income Tax Act to the Central Cooperative Banks
as available before amendment of Finance Act,2006.
Interest Subvention Scheme of G.O.I for Crop Loan.
In order to compensate the Cooperative Banks for providing
Agriculture loans @ 7% to the farmers, Government of India has
introduced a scheme of interest subvention in the year 2006-07.
Government of India was providing interest subvention @ 2.0% in the
year 2006-07 which was enhanced to 3% in the year 2008-09, but
subsequently, interest subvention was again reduced to 2% in the year
2009-10 and further reduced to 1.50% in the year 2010-11. Now the
interest subvention has marginally increased to 2.0% during the year
2011-12.
Therefore, it is requested that Government of India may be
prevailed upon to enhance the interest subvention in the same ratio at
which the rate of interest on refinance is enhanced by NABARD.
A special scheme should be formulated to allot cooking gas
agencies to PACS in the rural area. This will not only strengthen the
Cooperatives but will also prove to be a boon to the rural masses.
Besides the above, the issues raised by Hon,ble Chief Minister
Punjab with the Finance Minister Government of India vide his
D.O No.FCC.12/451 dated 14th March,2012 is being attached
herewith for information.
 GOVERNMENT OF PUNJAB
DEPARTMENT OF COOPERATION

Material for speech of Hon,ble Chief Minister of Punjab for

the Annual Plan 2013-14.

Overview

1. Cooperatives in Punjab have played a significant role not

only in ushering in green and white revolution but also in
sustaining the same. The Cooperative Department has taken
various measures to increase efficiency in operations with
the object to reduce the cost of services to the farmers and
to help them in diversification of their activities.
Formation of Agro Service Centers in Primary Agricultural
Societies :-
  There are 3510 Primary Agricultural Societies in the State. Out of
these 3210 Societies are formed as multipurpose Societies.

 Up till now, 1229 Agro Service Centers have been established in

Primary Agricultural Cooperative Societies (PACS). In these
Centers there are 1229 Tractors,1217 Laser Land Leveler and
10916 other agricultural implements. These implements are given
to the members of the societies on cheaper hiring rates. Punjab
Farmer’s Commission has released Rs.39.52 Crore as subsidy for
establishing Agro Service Centers.

2. Targets Achieved during the 11th five years plan

a) Punjab State Cooperative Bank: (PSCB)

Short Term Agriculture loans @ 7% interest are given to
the farmers by the Punjab State Cooperative Bank through
P.A.C.S.Year-wise detail of loans given is as under :-
(Figures in Crores)
Year 2007-08 2008-09 2009-10 2010-11 2011H12
Achievements 5828.27 5494.29 7536.33 8497.15 9459H75
Target 6000.00 6740.00 6800.00 8300.00 9300H00

b) The Punjab State Cooperative Agriculture

Development Bank(PSADB)\
The Punjab State Cooperative Agriculture Development
bank is providing long term loans for Agriculture and its
allied activities and non-farm activities .Year-wise detail of
loans is as under :-
(Figures in Crores)
Year 2007-08 2008-09 2009-10 2010-11 2011-12
Achievements 331.41 339.13 458.89 496.41 513.12
Target - 575.00 652.25 650.77 676.70
c)Milkfed :
7101 Milk Producing Cooperative Societies in which 3.90 lac
milk producers are members are working with Milked. Year-
wise Sales turnover is as under:-
(incrores)
Year 2007-08 2008-09 2009-10 2010-11 2011-12
Achievement 931.07 1115.98 1253.95 1523.58 1742.00
s

d)Housefed
Loan is being advanced by Housefed to its members through
housing societies. Year-wise detail is as under :-
(Amount in lacs)
year 2007-08 2008-09 2009-10 2010-11 2011-12
Achievement 2833H02 2230H00 1704H00 2782H00 4802H00
s
Targets ^ 7500H00 5000H00 5000H00 5000H00

e) Markfed
Markfed being Autonomous body in the Cooperative Sector is
engaged in production & Marketing of items used in farming such
as seeds, fertilizer, Pesticides, Cattle feed etc. Markfed is also
engaged in procurement of food grains. Year-wise detail is as
under:-
(lacs M.T.)
 Year 2007- 2008-09 2009-10 2010-11 2011-12
08
Wheat Achievement 19.05 24.80 25.68 23.88 25.96
Target 19.80 23.10 23.00 23.00 24.20
Paddy Achievement 24.25 27.76 28.66 27.01 26.01
Target 24.18 27.75 28.44 26.29

Besides that sale of fertilizer and agro chemicals and cotton seed
have also been made. Details of which is as under :-
)
Particular Units 2007- 2008- 2009-10 2010- 2011-12
s 08 09 11
FertilizerLacs 7.54 10.35 12.60 11.01 11.15
M.Ts
Agro Rs. 34.51 46.51 62.00 60.00 49.09
Chemicals Crores
Cotton Packets 81000 174000 158000 48000 332603
Seed

3. Finacial targets and achievement during the year 2012-13

a) Punjab State Cooperative Bank(PSCB):

During the year 2012-13 loan amounting to Rs.10741.48crores
was advanced against the target of Rs.10250.00crores
Under the one time settlement scheme which was approved to
recover the non performing assets in the co-operative
sector,5247 cases were settled and an amount of Rs.1849.74 lac
was recovered under this scheme
b) The Punjab State Cooperative Agriculture
Development Bank(PSADB)
During the year 2012-13 loan amounting to Rs.465.54crores was
advanced against the target or 628.40 crores.
Under the one time settlement scheme 14382 cases were settled
and an amount of Rs.9445.78 lac was recovered under this
scheme
c) Milkfed :
i) Financial Assistance to Dairy Cooperatives for
rehabilitation of Milk Unions:
Govt. of India has sanctioned a project for 6 weak
Cooperative Milk Unions identified under the scheme with
a total outlay of 75.68 Crores for their rehabilitation. A sum
of Rs.42.40 Crores has been released by Govt. of India and
Govt. of Punjab on 50:50 sharing basis. Apart from this
Govt. of Punjab has released Rs.5.00 Crores on 29.3.2012.
NDDB has been requested to release matching share
already released by Govt. of India. These funds have been
utilized for up gradation of Plant & Machinery,
procurement and marketing infrastructure.
ii) Strengthening Infrastructure for quality & clean Milk
Production:
To improve the quality of fresh milk the Govt. of India has
sanctioned a project under the scheme “Strengthening
Infrastructure for Quality & clean Milk Production” for 8
cooperative Milk Plants with total outlay of Rs.22.68
Crores for installation of 157 Bulk Milk coolers and other
equipments at village level Milk Producers’ Cooperative
Societies. Till date a sum of Rs.12.79 Crores has been
released by Govt. of India and Govt. of Punjab on 75:25
sharing basis. 102 Bulk Coolers have been installed so far
with this amount.
During the year 2012-13 Milkfed has fixed target of milk sales
turnover of 2100.00 crores but actual turnover during this year was
1722.00 cores(upto 2/2013).

d) Housefed
During the year 2012-13 loan amounting to Rs.40.49 crores was
advanced against the target of 55.00 crores.
e) Markfed
During the year 2012-13 28.75 lacs M.Ts. wheat and 29.15 lacs
M.Ts. paddy was procured against the target of 23.00lacs M.Ts.
and 27.80 lacs M.Ts. respectively. Besides that sale of 15.50 lacs
M.TS. fertilizer Rs. 44.55crore Agro chemical and112933 packets
of cotton seed have also been made duringthe same period.

4. With regard to issues and constraints which require the

attention of State Government for taking up with the
Govt.of India are reported as under :-

Rate of interest on re-finance by NABARD

As per directions of Government of India/NABARD, the short term
agriculture loans are being advanced @ 7% with effect from
1.4.2006.The rate of interest on re-finance from NABARD which was
available at 2.5% in the year 2006-07 has been enhanced to 3% in the
year 2007-08, 3.5% in the year 2008-09, 4% in the year 2009-10 and
4.5% in the year 2011-12. The increase in rate of interest on refinance
has adversely affected the profitability of Central Coop. Banks and
PACS. Since the PACS in the three-tier structure of Cooperative Credit
System are playing a pivotal role in providing multifarious and
extremely useful services to the farmers, therefore, in order to strengthen
the PACS and the cooperative credit system in the State of Punjab,
NABARD may be stressed upon to reduce the rate of interest on
refinance to 2.5% as applicable on 1.4.2006.

Exemption from Section 80(P) of Income Tax Act 1961 to

Cooperative Banks.

With the amendment of Finance Act,2006, the income of Central

Cooperative Banks have been brought into the ambit of Income Tax Act.
Since Central Cooperative Banks are providing short term agriculture
loans to the PACS at 5% rate of interest for further lending to the
farmers at 7%, therefore, these banks are functioning at a very thin
margin. Levy of Income tax on the income of these banks has further
aggravated their financial position. Govt. of India may therefore be
stressed upon to restore exemption for payment of Income Tax under
section 80(P) of the Income Tax Act to the Central Cooperative Banks
as available before amendment of Finance Act,2006.

Interest Subvention Scheme of G.O.I for Crop Loan.

In order to compensate the Cooperative Banks for providing
Agriculture loans @ 7% to the farmers, Government of India has
introduced a scheme of interest subvention in the year 2006-07.
Government of India was providing interest subvention @ 2.0% in the
year 2006-07 which was enhanced to 3% in the year 2008-09, but
subsequently, interest subvention was again reduced to 2% in the year
2009-10 and further reduced to 1.50% in the year 2010-11. Now the
interest subvention has marginally increased to 2.0% during the year
2011-12.
Therefore, it is requested that Government of India may be
prevailed upon to enhance the interest subvention in the same ratio at
which the rate of interest on refinance is enhanced by NABARD.
A special scheme should be formulated to allot cooking gas
agencies to PACS in the rural area. This will not only strengthen the
Cooperatives but will also prove to be a boon to the rural masses.
Besides the above, the issues raised by Hon,ble Chief Minister
Punjab with the Finance Minister Government of India vide his
D.O No.FCC.12/451 dated 14th March,2012 is being attached
herewith for information.