Ministry of Cooperation

Ministry of Cooperation

Subject: Polity

Context: On Monday, the government announced the formation of a separate Union Ministry of Cooperation, a subject that till date was looked after by the Ministry of Agriculture.

Concept:

• A Co-operative based economic development model is very relevant where each member works with a spirit of responsibility. Cooperative institutions like village-level PACS or the urban cooperative housing societies, elect their leaders democratically, with members voting for a board of directors.
• Cooperative institutions get capital from the Centre, either as equity or as working capital, for which the state governments stand guarantee. The cooperative movement would get the required financial and legal power needed to penetrate into other states also.
• Cooperative sugar mills account for 35% of the sugar produced in the country.
• In banking and finance, cooperative institutions are spread across rural and urban areas.

Cooperative movement

• Cooperatives are organisations formed at the grassroots level by people to harness the power of collective bargaining towards a common goal.
• In agriculture, cooperative dairies, sugar mills, spinning mills etc are formed with the pooled resources of farmers who wish to process their produce.
• Village-level primary agricultural credit societies (PACSs) formed by farmer associations are the best example of grassroots-level credit flow.
• These societies anticipate the credit demand of a village and make the demand to the district central cooperative banks (DCCBs).
• State cooperative banks sit at the apex of the rural cooperative lending structure. Given that PACSs are a collective of farmers, they have much more bargaining powers than an individual farmer pleading his case at a commercial bank.
• There are also cooperative marketing societies in rural areas and cooperative housing societies in urban areas.

Need and Objective of new Ministry

• The Ministry of Cooperation will provide a separate administrative legal and policy framework for strengthening the cooperative movement in the country.
• It will help deepen Co-operatives as a true people based movement reaching upto the grassroots.
• The Ministry will work to streamline processes for ‘Ease of doing business’ for co-operatives and enable development of Multi-State Co-operatives .

Laws governing cooperative societies

• Subjects like agriculture, cooperation is in the concurrent list,
• A majority of the cooperative societies are governed by laws in their respective states, with a Cooperation Commissioner and the Registrar of Societies as their governing office.
• In 2002, the Centre passed a MultiState Cooperative Societies Act that allowed for registration of societies with operations in more than one state. These are mostly banks, dairies and sugar mills whose area of operation spreads across states.
• The Central Registrar of Societies is their controlling authority, but on the ground the State Registrar takes actions on his behalf.