New Union Ministry of Cooperation
✅Why in news : As part of the latest Cabinet reshuffle, the government announced the formation of a separate Union Ministry of Cooperation, a subject that was till date looked after by the Ministry of Agriculture.
▪️What is the cooperative movement?
✅ Simply, 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.
✅Village-level primary agricultural credit societies (PACSs) formed by farmer associations are the best example of grassroots-level credit flow.
✅There are also cooperative marketing societies in rural areas and cooperative housing societies in urban areas.
✅As market conditions are evolving, cooperatives in States such as Kerala have got into complex operations: running IT parks and medical colleges.
✅More avenues for expansion, such as insurance, remain untapped and the regulatory regime must evolve in step.
✅Though not uniform across India, cooperatives have made significant contributions in poverty alleviation, food security, management of natural resources and the environment.
▪️How are cooperative societies governed?
✅ The legal architecture of the sector began evolving since 1904 under colonial rule.
✅ In 2002, the Multi State Cooperative Societies Act was passed, taking into account the challenges arising out of liberalisation.
✅Agriculture and cooperation are in the state list.
✅So, a majority of the cooperative societies are governed by laws in their respective states.
✅The MultiState Cooperative Societies Act, 2002 allowed for registration of societies with operations in more than one state.
✅The Central Registrar of Societies is their controlling authority. But on the ground, the State Registrar takes actions on his/her behalf.
▪️What is the need for a new Ministry?
✅ Policy focus - Alongside the state and the market, cooperatives play a vital role in the country‘s development.
✅ But they are seldom the focus of policy planning.
✅The creation of a new Union Ministry will redeem the cooperatives sector from this negligence.
✅ Management - Despite regulatory oversight by the RBI and States, there is considerable autonomy for the
sector which is often misused.
✅ Consequently, the cooperatives sector has become an instrument of patronage and pilferage.
✅Mismanagement and corruption destroyed the sector in some States.
✅Cooperatives are also effective in mediating politics at the local level, outside of the parliamentary system.
✅It is thus essential to restore the importance of the cooperative societies for their intended purposes.
✅ Funding - The cooperative structure has managed to flourish and make an impact only in a handful of states.
✅These include states like Maharashtra, Gujarat, Karnataka etc.
✅ Cooperative institutions get capital from the Centre, either as equity or as working capital, for which the state governments stand guarantee.
✅This formula had seen most of the funds coming to a few states while other states failed to keep up.
✅Over the years, the cooperative sector has witnessed drying out of funding.
✅Under the new Ministry, the cooperative movement would get the required financial and legal power to penetrate into other states also.
