Bill to amend the Multi-State Cooperative Societies Act introduced in Lok Sabha

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CategoryPolity

Last Updated13/12/2022

The Bill to amend the Multi-State Cooperative Societies (MSCS) Act, 2002, was recently introduced in the Lok Sabha.
Opposition parliamentarians alleged that the Bill’s provisions encroached upon the rights of State governments, demanding that it be referred to a Standing Committee.

People-centered enterprises: jointly owned and democratically controlled by their members to realize common economic, social & cultural needs.
Have operations in more than one State: eg, a farmer-producers organisation which procures grains from farmers from multiple States.
Collective control of financing and administration: by the board of directors from all the States.
~ 1,500 MSCSs registered in India - highest in Maharashtra.

Avenue for patronage to supporters of ruling political parties: due to inclusion of cooperatives in the planning process .
Govt directly intervening in the autonomous working of cooperatives: “in the name of public interest” due to the policy of State governments to contribute to the share capital of the cooperatives.
Potency of cooperatives as an apparatus of political control: as seen in Maharashtra, Kerala, Gujarat, parts of Karnataka, TN, MP and West Bengal.
Trust issues: within the MSCSs instead of easing the operation of collectives throughout the country.
Top-down approach instead of a grassroot one: Monitoring from much above, it takes a top-down approach instead of grassroots one.
No required modifications done so far: The 1991 Choudhary Brahm Perkash Committee recommendations to reorganise MSCSs not implemented so far .

Introduction of more “transparency” and “ease of doing business”: To plug the “loopholes” in the MSCS Act.
Other reforms:
Improving governance
Reforming electoral process
Strengthening monitoring mechanisms
Enhancing transparency and accountability
Improving composition of the board and ensuring financial discipline: also enabling the raising of funds in multi-State cooperative societies.
Creation of a central Co-operative Election Authority: to supervise the electoral functions of the MSCSs.
Composition: a chairperson, vice-chairperson, and up to three members appointed by the Centre.
Creation of a Co-operative Rehabilitation, Reconstruction and Development Fund: for the revival of sick multi-State co-operatives societies.
Financed by existing profitable MSCSs - will deposit either ₹1 crore or 1% of the net profit into the Fund.
Grievance redressal and information sharing: Appointment of a Cooperative Information Officer and a Cooperative Ombudsman
Representation of women and SC/ ST members: to promote equity and facilitate inclusiveness

May lead to “the concentration of power of the Centre”: could impact the “autonomy” of MSCSs and create potential for “misuse”.