Every year, India faces a silent but massive challenge — shortage of food grain storage. As agricultural production rises, post-harvest losses also increase, exposing gaps in infrastructure, especially in rural and high-rainfall regions. This problem gave birth to a historic initiative — the World’s Largest Grain Storage Plan in the Cooperative Sector, approved by the Government on 31 May 2023.
What makes this scheme extremely important for UPSC is that it goes far beyond building godowns. At its core lies a transformative idea — converting PACS (Primary Agricultural Credit Societies), the backbone of rural finance, into multipurpose rural service hubs. Along with storage facilities, PACS are now envisioned to host custom hiring centres, processing units, and fair price shops — all under one roof.
The scheme follows a strong convergence approach, integrating multiple government initiatives like AIF, AMI, SMAM, and PMFME — a keyword UPSC examiners love. However, the pilot phase revealed serious challenges such as outdated construction cost norms, lack of uniform subsidies, weak SOPs, limited financial capacity of PACS, and uneven state participation.
Responding to this reality check, the government introduced major reforms — doubling construction cost norms, enhancing subsidy to 33.33%, reducing margin money to 10%, extending repayment timelines, and most importantly, providing a 9-year hiring assurance by FCI for large godowns. This ensures guaranteed income for PACS, making the model financially viable.
As of 15 November 2025, hundreds of PACS have been identified, dozens of godowns constructed, and nearly 60,000 MT of storage capacity created — with states like Rajasthan and Maharashtra leading the way. The scheme holds special relevance for humid and high-rainfall regions, particularly the North-East, where higher subsidies reflect the geography-linked risk of post-harvest losses.
Ultimately, this is not just a storage scheme. It strengthens India’s food security architecture from the bottom up through decentralised procurement, local MSP operations, reduced wastage, and rural job creation. If scaled effectively, India could soon host the world’s largest decentralised grain storage network, redefining food security for the next decade.
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