News Analysis India

Tag: Cooperative Societies

  • With cooperation ministry, BJP aims to gain foothold in rural India

    Express News Service
    MUMBAI/LUCKNOW/CHANDIGARH/PATNA/KOLKATA: Whether the opposition parties’ allegations that the setting up of a cooperation ministry, headed by home minister Amit Shah, is an attempt to undermine federalism is well founded or not is debatable, but it could give a leg-up to the Bharatiya Janata Party’s attempts to make inroads in cooperative sectors where it is not very strong.

    Generally, cooperative societies are influenced by whichever party is in power in a state. For instance, in Maharashtra, the Congress and the NCP dominate them, while the BJP has been a latecomer. Gujarat has over 81,000 cooperative societies, which benefitted the Congress for decades but are now being controlled by the BJP. Assembly polls are due in the state late next year.

    The political influence of cooperative societies stems from their enormous size and spatial coverage in the rural hinterland. Maharashtra has over 2 lakh cooperative societies with a membership of 50.5 million. 

    The influence also comes from their financial clout. Take for instance the recent scam in the Punjab and Maharashtra cooperative banks, the fraud is estimated at over Rs 4,000 crore. Many feel it could be game on in cooperative societies. 

    MAHARASHTRAThe state has more than 200 cooperative sugar factories whose annual turnover is around Rs 35,000 crore while the cooperative milk federation and allied businesses’ annual turnovers are collectively more than Rs 40,000 crore.

    A political observer said the BJP has not been able to dismantle the stranglehold of the Congress-NCP in the cooperative network. “The cooperative sector is the soul of NCP chief Sharad Pawar’s politics.” He said the BJP is heavily dependent on urban voters, who could be drifting away because of the handling of the Covid-19 pandemic. “If the BJP wants to come back to power then they have to find a new territory, the cooperative sector is one of them,” he added.

    Sanjeev Babar, a former CEO of the Maharashtra State Cooperative Sugar Federation, said the cooperative sector “ensures a steady flow of money to farmers and enables him to purchase seeds, start a business and pay for children’s education. Farmers get a loan at reasonable rates and their interests are protected.” 

    “The chairmen or directors of sugar factories handle large amounts of funds. So, when the Congress-NCP was in the opposition, the core rural vote remained loyal to their political leaders,” Babar said. The cooperative sector has nurtured several politicians, starting from the late chief minister Vasantdada Patil and incumbent deputy chief minister Ajit Pawar.

    UTTAR PRADESHThe cooperative sector has largely been a fiefdom of Samajwadi Party patriarch Mulayam Singh Yadav’s family. Its association with the sector started in 1977, when Yadav was the cooperative minister. During his three tenures as the CM, Yadav either kept the cooperative portfolio to himself or allocated it to younger brother Shivpal Singh Yadav.

    But it was in September 2020 that the SP’s stranglehold on cooperatives started declining. The BJP entered the sector in a major way with its candidates sweeping the polls for the UP Cooperative Land Development Bank, responsible for agricultural credit, by winning 293 of the 312 seats unopposed.

    PUNJABThe state societies are either controlled by the ruling Congress or the opposition Shiromani Akali Dal. The BJP stands nowhere, nor does it appear that it can influence the sector. An insider said the ruling political party ensures that their supporters are members of these societies.

    An official said cooperative banks with 802 branches offer loans worth around `12,000 crore to farmers. The Punjab State Cooperative Development Federation has had politicians as its head. They include late CMs Darbara Singh, Zail Singh and Beant Singh, who was also a director of the Central Corporative Bank, Ludhiana. 

    WEST BENGALThe Left Front in its 34-year rule never gave cooperatives much importance as they already had a strong cadre base in the rural areas. But Trinamool Congress supremo Mamata Banerjee, after wresting power in 2011, realized that cooperatives might be a useful tool to reach out the rural electorate. In 2013, she declared cooperative societies would not be empowered to attach the property of farmers defaulting in loan repay. “The creation of the cooperation ministry seems to be the BJP’s attempt to gain a foothold in rural parts by using the cooperative financial structure as a tool,” said a TMC leader.

    MADHYA PRADESHThe cooperative sector was largely dominated by the Congress till 2003 but after the BJP’s return, its people started replacing the Congress, particularly in the credit, distribution of agricultural inputs and marketing sectors. 

    It was during senior cabinet minister Gopal Bhargava’s tenure as cooperative minister between 2013 and 2018 that not only did the sector expand, but the BJP influence grew by leaps and bounds. A few months after toppling the Kamal Nath government, the Shivraj Singh Chouhan government passed the Cooperative Societies (Amendment) Ordinance, 2020, to allow MPs and MLAs to become chairmen and vice-chairmen of cooperatives. 

    BIHARThere are 34 state level cooperative orgainsations in handloom, dairy, agriculture, fertilisers, seeds and fisheries and they have an annual turnover of about Rs 30,000 crore. Till 2005, the Lalu Prasad-led RJD had a strong influence on these societies. With the power shift, the JD-U, BJP and others have made inroads into them.

  • Does 97th amendment denudes States from making laws on cooperative societies, Supreme Court examines

    By PTI
    NEW DELHI: The Supreme Court on Wednesday commenced hearing to examine whether 97th constitutional amendment denuded states of their exclusive power to enact laws to deal with management of cooperative societies, saying “slightest in-road will render the power of States as non-exclusive.”

    The 97th constitutional amendment, which dealt with issues related to effective management of the co-operative societies in the country was passed by Parliament in December 2011 and had come into effect from February 15, 2012.

    The change in the constitution has amended Article 19(1)(c) to give protection to the cooperatives and inserted Article 43 B and Part IX B, relating to them.

    A bench of Justices R F Nariman, K M Joseph and B R Gavai is hearing appeals filed by Centre and other parties against the Gujarat High Court order of April 22, 2013 by which it had quashed certain provisions of the constitutional amendment.

    During the hearing, the bench told Attorney General K K Venugopal that it wanted to examine if the amendment interfered with the exclusive power of the State under Article 246 (3) with regard to enacting law relating to cooperatives as it is the state subject.

    Venugopal said the amendment was enacted to bring in uniformity in the management of cooperative societies and it does not take away the powers of the State to enact laws with regard to them.

    The bench said if the Centre wanted to achieve uniformity then the only way available was to take the recourse under Article 252 of the Constitution which deals with power of Parliament to legislate for two or more States by consent.

    “You cannot short circuit this provision,” the bench said, adding that in effect what the government has done is that the power of States to enact laws with respect to cooperative society is no longer exclusive.

    It said, “Slightest in-road will render the power of States as non-exclusive.”

    Venugopal said that entry 44 of List I (union list) deals with multi-state cooperatives and there are several judgments dealing with the issue.

    Justice Joseph told Venugopal that entry 44 of List I does not have the word ‘cooperative societies’ while entry 32 of List II (State list) has the word ‘cooperative societies’.

    Senior advocate Prakash Jani, appearing for a Gujarat based cooperative, said that he supports the stand taken by the Centre and the amendment was brought by exercising constituent power of parliament to bring in uniformity in laws relating to co-operative societies enacted by different States.

    He said that Centre has from day one maintained that entry 32 of List II (State list) is not picked up and brought to List I (union list) as States still continue and are free to make any law with regard to the co-operative societies.

    Advocate Masoom K Shah, appearing for one Rajendra K Shah said that the High Court has taken a correct view that certain provisions of the constitution amendment violated the basic structure of federalism as it was not ratified by the States as required under Article 368 of the Constitution.

    The hearing remained inconclusive and would continue on Thursday.

    On April 22, 2013, the High Court, while striking down certain provisions of the 97th constitutional amendment, held that the Centre cannot enact laws or issue notification with regard to cooperative societies as it is a state subject.

    The High Court verdict came on a PIL challenging the legality of the 97th constitutional amendment on the ground that Centre had no legislative competence to enact law for cooperative societies which is exclusively a state subject under the scheme of the Constitution.

    The High Court had held that certain provisions of the amendment pertaining to cooperative societies violated the basic structure of federalism.

    The PIL petitioner have contended that as per the provisions of Article 368 of the Constitution, if Parliament intends to amend or delete any of the lists in the seventh schedule, such Amendment shall require to be ratified by the legislature of not less than one half of the states by resolution to the effect passed by those legislatures before the bill making provisions for such amendment is presented to the President for Assent.