The Multi-State Cooperative Societies (Amendment) Bill, 2023, which seeks to strengthen cooperatives by making them transparent and introduces a system of regular elections was passed by the Lok Sabha on July 25.
Key provisions
- The Bill seeks to reform the composition of the Board of multi-State co-operative societies, establishment of ‘Co-operative Election Authority’ which shall consist of a chairperson, vice-chairperson and members of the Union government alongside rehabilitation, reconstruction and development fund for the revival of “sick multi-State co-operative societies”.
- An independent body on the lines of the Election Commission will conduct elections in cooperatives which will reduce the interference of government. The board will have to compulsorily meet every three months.
- The Bill would impart more transparency to the composition of the board.
- The elections laws provisioned in the Bill is at par with those of the Election Commission. The chairman, vice-chairman and members of the committees will be required to call board meeting in 3 months.
- In order to bring transparency in the governance of the cooperative society, a provision has been made to give majority to the equity shareholders.
- Reservation to one Scheduled Caste or Scheduled Tribe and one woman in the committees has been provided in this bill which will increase representation of these sections in the committees. Right to Information has also been included in this bill.
About cooperatives in India
- The cooperative movement in India is about 115 years old and this movement has given the country many important enterprises, like Amul, Kribhco, IFFCO, which are source of employment for lakhs of people today.
- Cooperatives are a state subject under the Constitution, meaning they come under the state governments’ jurisdiction, but there are many societies whose members and areas of operation are spread across more than one state.
- For example, most sugar mills along the districts on the Karnataka-Maharashtra border procure cane from both states.
- The existing law — the Multi-State Co-operative Societies Act (MSCS) of 2002 — was enacted by the then Atal Bihari Vajpayee government for their management.
- Cooperatives of more than one state are registered under the MSCS Act.
- Their board of directors has representation from all states they operate in.
- Administrative and financial control of these societies is with the central registrar, with the law making it clear that no state government official can wield any control over them.
- Earlier, Cooperation was a department under the Ministry of Agriculture. However, on July 6, 2021, the government carved out a separate Cooperation Ministry and Amit Shah became the first Cooperation Minister of the country. Soon after taking charge of the Ministry, he announced the bringing in of a new National Cooperative Policy.
- The Constitution (97th Amendment Act), 2011 makes provisions for Co-operative societies in India. The Amendment provided legal status and protection to Co-operative societies. Part IXB was inserted in the Constitution through this amendment.
