Multi-State Cooperative Societies Act amendment bill introduced in Lok Sabha

Multi-State Cooperative Societies Act amendment bill introduced in Lok Sabha

Subject :Polity

Context:

• The Bill proposes to amend the Multi-State Co-operative Societies Act, 2002 in light of the 97th Constitutional Amendment Act of 2011 which inserted Part IXB in the Constitution.

Key highlights of the bill:

• Cooperative election authority: The Bill also seeks to establish a “cooperative election authority” to bring “electoral reforms” in the cooperative sector.
• As per the proposed amendment, the authority will consist of a chairperson, a vice-chairperson and a maximum of three members to be appointed by the Centre.
• Establishment of a Fund & concurrent audit: The Bill seeks to insert a new Section related to the “establishment of the Cooperative Rehabilitation, Reconstruction and Development Fund” for revival of “sick multi-state cooperative societies”.
• It also proposes to insert Section relating to “concurrent audit” for such multi-state societies with an annual turnover or deposit of more than the amount as determined by the Centre.
• Complaints redress: The government has proposed to insert a Chapter relating to “complaints redress”.
• This proposes to appoint one or more “cooperative ombudsman” with a territorial jurisdiction to inquire into members’ complaints.
• Role of the ombudsman: The ombudsman will complete the process of inquiry and adjudicate within a period of three months from the date of receiving the complaint and may issue necessary directions to the society during the course of inquiry.
• Monetary penalties and imprisonment: The government has also proposed to amend the existing Act to increase monetary penalties on multi-state co-op societies for violating provisions of the law to a maximum Rs 1 lakh.
• The imprisonment term has also been proposed from a maximum six months at present to up to one year in the proposed amendments.
• Cooperative information officer: The Centre has also proposed to make provisions for the “appointment of cooperative information officer” to provide information on affairs and management of the multi-state co-op society concerned to members of such society

About Co-operative societies

• A co-operative society is a voluntary association of individuals having common needs who join hands for the achievement of common economic interest.
• Its aim is to serve the interest of the poorer sections of society through the principle of self-help and mutual help.
• Multi-State cooperatives: Multi-State cooperatives are societies that have operations in more than one State — for instance, a farmer-producers organisation which procures grains from farmers from multiple States.
• The board of directors, which represents all the States where these collectives do business, is in charge of all administrative and financial decisions.
• In India, there are around 1,500 MSCSs registered, with Maharashtra having the most.

Is Cooperative Society in Concurrent List?

• The item “cooperative society” is a state subject and falls under the Second list in the seventh schedule meaningly that state has right to make law on and related subject matter of “cooperative society”.

97th Constitutional Amendment Act 2011:

• It established the right to form cooperative societies as a fundamental right (Article 19).
• It included a new Directive Principle of State Policy on the Promotion of Cooperative Societies (Article 43-B).
• It added a new Part IX-B to the Constitution titled “The Co-operative Societies” (Articles 243-ZH to 243-ZT).
• It authorizes the Parliament to establish relevant laws in the case of multi-state cooperative societies (MSCS) and state legislatures in the case of other cooperative societies.

Ministry of Cooperation

• The Union Ministry of Cooperation was formed in 2021, its mandate was looked after by the Ministry of Agriculture before.