Published: 15th Dec, 2022
Context
The government has recently introduced the Multi-State Cooperative Societies (Amendment) Bill, 2022, to improve governance and bring transparency & accountability. The Bill aims to amend the MultiState Cooperative Societies (MSCS) Act, 2002.
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What are multi-state cooperatives?
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What are the issues with the cooperative sector?
- Issues regarding trust: This has brought MSCSs under multiple controls from the Centre.
- Monitoring: Monitoring from much above, takes a top-down approach as opposed to a grassroots one.
What does the Bill seek to change?
- To plug Loopholes in the MSCS Act: Bill seeks to amend the 2002 law for more “transparency” and “ease of doing business”.
- To strengthen governance, reform the electoral process, improve the monitoring mechanism, and ensure ease of doing business in multi-State cooperative societies.
- To improve the composition of boardsand ensure financial discipline, besides enabling the raising of funds in the multi-State cooperative societies.
- Creation of a central Cooperative Election Authority: The Bill provides for the creation of a central Cooperative Election Authority to supervise the electoral functions of the MSCSs.
- Its composition:
- A chairperson
- vice chairperson
- up to three members appointed by the Centre
- Insertion of a new Sectionrelated to the “establishment of the Cooperative Rehabilitation, Reconstruction and Development Fund” for the revival of “sick multi-state cooperative societies”.
- The merger of “any cooperative society” into an existing multi-state cooperative society.
Issues in the Bill
- Misuse of power: The Bill may lead to “the concentration of power of the Centre”, which could impact the “autonomy” of MSCSs and create the potential for “misuse”.
- Encroachment: Bill’s provisions encroach on the rights of State governments. It infringed on the cardinal principle of autonomous functioning as provided in Article 43B of the Constitution.
Related Constitutional Provisions:
- 97thConstitutional Amendment Act 2011
- The right to form cooperative societies is a fundamental right (Article 19).
- New Directive Principle of State Policy on the Promotion of Cooperative Societies (Article 43-B).
- A new Part IX-B to the Constitution is titled “The Co-operative Societies” (Articles 243-ZH to 243-ZT).
- Creation of a new Ministry of Cooperation– which gave more acknowledgment to cooperative societies.
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Ministry of Cooperation:
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