By Binod Anand Secretary General, Confederation of NGOs of Rural India (CNRI); Founder, World Cooperative Economic Forum; Member, PM’s High-Power Committee on MSP, Crop Diversification and Natural Farming
We have spent the better part of three years giving India’s Primary Agricultural Credit Societies a digital spine. More than sixty-five thousand PACS are being computerised onto a common ePACS platform, wired into a national cooperative database, and readied to sell everything from credit and fertiliser to insurance, LPG and common service centre services. Computerisation gave the PACS a nervous system. The Model HR Policy released this June, under the banner of Sahkar se Samriddhi, finally asks the question the hardware could never answer on its own: who, exactly, is going to run all this — and on what terms?
That the Ministry of Cooperation has attempted a uniform HR architecture at all deserves to be said first and said plainly. For decades the human side of the PACS has been the movement’s blind spot — ad-hoc appointments, a single overworked Secretary doubling as accountant and peon, no career ladder, no appraisal, no training, and pay decided by whoever happened to chair the board. A model policy that standardises designations, ties staffing to audited business size through the A+-to-F categorisation, insists on merit-based recruitment through IBPS or a state board, builds an HRIS on top of ePACS, and even accommodates the constitutional distinctiveness of the Fifth and Sixth Schedule areas of the Northeast is a genuine step forward. The maker-checker floor of two staff, the three alternative salary models that respect the wide gulf in states’ fiscal capacity, the tapering support fund for weak-but-viable societies, and the LMS-based training framework are all thoughtful. This is the most serious attempt yet to professionalise the last mile of rural credit.
Having welcomed it, I must also, as the policy itself invites us to, evaluate it critically. A model that will govern the working lives of lakhs of rural employees cannot be adopted on its merits alone; it must be adopted with its eyes open to its own gaps. Several are serious.
The dignity paradox
The policy lists “employee dignity, welfare and career progression” among its core objectives — and then proposes a pay structure that quietly contradicts it. A PACS Secretary is the single most accountable individual in a society that may be turning over several crore rupees, carrying statutory audit responsibility, ERP compliance and disciplinary authority. Under Model A that Secretary enters at a basic pay of ₹15,000 a month and rises by ₹1,000 a year; under Model B the consolidated figure is ₹20,000–25,000. In many states this is at or barely above the statutory minimum wage for semi-skilled labour. We are asking for a professional and offering the compensation of a helper.
The retirement end of the ladder is starker still. Gratuity is capped at ₹2.5 lakh — against a statutory ceiling of ₹20 lakh under the Payment of Gratuity Act — meaning a Secretary who gives thirty years to the movement walks away with a fraction of what the law allows any other worker. Pension and provident fund, the two instruments that would actually make a long professional career possible, are left as things the state “may consider” or “may design.” You cannot demand a thirty-year vocation and offer it on an optional pension. If we want the PACS Secretary to be a career professional rather than a way-station, the compensation floor, the gratuity cap and the pension architecture must be revisited before, not after, adoption.
The viability cliff and the unfunded mandate
The entire financial logic rests on a clean assumption: within three years, PACS revenues plus a tapering subsidy (100 per cent in year one falling to 20 per cent by year five) will cover salaries. On paper the taper is elegant. In practice, a very large share of PACS are dormant or chronically loss-making, and the policy’s own non-compliance clause is unforgiving — a society that has not reached profitability by year three or self-sufficiency by year five faces withdrawal of support and “review of staffing structure, including redeployment or downsizing.” That is a cliff, and it is placed precisely under the weakest societies in the remotest areas, which are the ones the movement most needs to keep alive.
Worse, the money to build the ramp is itself fragile. Contributions to the assistance funds depend on the profitability of the State and District Cooperative Banks; where both are in loss, the burden falls “fully” on the state government. In the states where PACS are weakest, the cooperative banks tend to be weakest too and the treasuries tightest — so the support is thinnest exactly where the need is greatest. The document carries no aggregate fiscal note, no estimate of what the funds will require annually, and no committed source. Without that, a “model policy” risks becoming an unfunded mandate that states quietly decline to implement.
A definitional muddle that could break the benchmarks
The cost-efficiency benchmarks — staff cost capped at 30 per cent, administrative expenses at 50 per cent — are sound in principle. But the categorisation table sizes a PACS by business level (total credit plus non-credit turnover), while the benchmarks are expressed as a share of revenue and income. Turnover and income are not the same thing, and for a small society the difference is decisive. A Category D PACS with a crore of turnover may earn only a few lakh in actual income; thirty per cent of that will not cover a single Secretary’s salary. Unless the policy defines its denominator precisely, the benchmark that is meant to enforce discipline will instead make compliant staffing arithmetically impossible for the smaller categories.
Governance: who guards the guards?
Recruitment has rightly been handed to independent examiners. But approval of appointments, transfers, disciplinary appeals and fund allocation all sit with the DLPC and SLPC — bodies chaired by the elected presidents of the District and State Cooperative Banks. Concentrating recruitment approval, the power to transfer, the disciplinary appellate function and the purse in politically elected cooperative leadership reproduces the very patronage the policy sets out to end. A Secretary’s disciplinary appeal, remarkably, lies to the same DLPC that recruited and can transfer him. There is no independent staff ombudsman, no grievance channel outside this chain. Professionalisation without separation of powers is incomplete.
The transition landmine, and the people left out
Clause 6.2 gives serving Secretaries and Assistant Executives who lack the prescribed qualifications five years to acquire them — but only those with more than ten years of service remaining, and it is silent on what happens to those who cannot, and on those with less than ten years left. This is exactly the ambiguity in which implementation dies and litigation is born. A generation of long-serving, politically embedded, under-credentialed staff will read this clause with justified anxiety, and their federations — whom the policy commendably promises to consult — will not accept vagueness. A clear, humane grandfathering and absorption framework is essential.
Two further silences stand out. For an institution meant to be “inclusive,” the policy offers women little beyond maternity leave and a gender-sensitisation module — no representation targets, no childcare, and, strikingly, no mention of Sexual Harassment (POSH) Act compliance in a frontline rural workplace. And for a system built on daily digital compliance, ePACS logs and online training, it makes optimistic assumptions about connectivity and the digital literacy of older staff outside the Northeast; tying increments and promotions to “100 per cent digital compliance” risks penalising employees for infrastructure failures they cannot control. Finally, performance-linked pay that rewards ≥20 per cent “business volume growth” without an explicit loan-quality guardrail invites exactly the reckless lending that creates tomorrow’s NPAs.
What needs to be done
None of this is an argument against the policy. It is an argument for finishing it. Before states are asked to notify and adopt, I would urge the MoC Committee to:
- Re-anchor the pay floor to dignity, not survival — benchmark the Secretary’s entry pay to a defined multiple of the state minimum wage or the DCCB clerical scale, raise the gratuity ceiling toward the statutory limit, and make a funded, portable pension and provident fund mandatory rather than optional.
- Replace the year-five cliff with a glide path — for weak-but-viable PACS, convert automatic downsizing into a mandatory revival plan with a named, committed funding source, and publish an aggregate fiscal note so states know what they are signing up to.
- Fix the denominator — define “revenue” and “income” precisely and re-test every cost benchmark against real small-PACS balance sheets, so the norms are achievable in Categories C to F.
- Build in separation of powers — create an independent staff grievance and appellate mechanism outside the DCCB-chaired committees, and firewall recruitment, transfer and discipline from fund control.
- Publish a clear transition framework — humane grandfathering, an absorption pathway, and explicit provision for staff who cannot meet new qualifications, co-drafted with the employee federations.
- Make inclusion real — women’s participation targets, POSH compliance, and childcare, written in rather than assumed.
- Guard the incentives — attach loan-quality and NPA guardrails to every growth-linked incentive, and shield staff from penalties for connectivity failures.
- Phase the rollout — pilot category-wise in a few states, learn, and scale, with a concrete national timeline and a DPDP-compliant data-governance annexure for the HRIS.
The larger point
In cooperative economics we say that the PACS is the riverbed through which rural credit reaches the field. Computerisation deepened that bed. But a riverbed carries nothing without water, and the water here is human — the Secretary, the accountant, the clerk who opens the shutter each morning in a village most policy never visits. If we hand them a professionalised mandate but an unprofessional wage, a career ladder but no pension, and accountability without a fair hearing, we will have built a magnificent digital channel and left it dry.
The Model HR Policy is a foundation worth building on precisely because its ambition is right. Let us hold it to that ambition. Sahkar se Samriddhi — prosperity through cooperation — cannot be delivered by underpaid, insecure hands. Get the human policy right, and the thousands of crores invested in computerisation become a living network. Get it wrong, and they become stranded assets in sixty-five thousand villages. On the road to Viksit Bharat 2047, the last mile of the cooperative movement will be walked by these employees or by no one. They deserve a policy equal to the work we are asking of them.
