Ground Report | New Delhi: The government, last Monday, announced the formation of a separate Union Ministry of Cooperation. The ministry “will provide a separate administrative legal and policy framework for strengthening the cooperative movement in the country”, a release from Press Information Bureau said. Cooperatives, so far under the Ministry of Agriculture, will now fall under this new ministry headed by Amit Shah. While the government has stressed on the much felt need for a separate ministry for cooperatives, several opposition leaders have alleged that the move is tailor-made to fit the needs of the BJP in the upcoming Gujarat and Maharashtra elections. Moreover, it has been alleged that this decision also undermines federalism.
Need for a Cooperation Ministry
Cooperatives are grass-root-level organisations owned and run by and for its comprising members. The goal of cooperatives is to help its members realise their common socio-economic and cultural needs. They rely on the pooled resources of farmers to give them greater bargaining power. In India, the cooperative movement was formally launched in 1904, although cooperatives, in one form or another, have existed for far longer in the country. These institutions largely operate within the agriculture and rural financing sectors in India.
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According to National Dairy Development Board’s Annual Report (2019-20), India has 1,94,195 cooperative dairy societies and 330 cooperative sugar mill operations. NABARD’s report for the same year counts 95,238 primary agricultural credit societies (PACSs), 363 district central cooperative banks (DCCBs) and 33 state cooperative banks in the country. The economic transactions of these agriculture and financing cooperatives collectively values in thousands of crores. Thus, cooperatives are of immense importance to the country.
However, the cooperative sector hasn’t been able to reach its full potential in most Indian states. In most states, funds for cooperatives have been dwindling. A central ministry that can provide the needed financial and legal help to and overcome the challenges that state administrations couldn’t, some feel, is the need of the hour.
Opposition leaders have opined that the Union Ministry of Cooperation has been created to benefit the ruling BJP government. Since the cooperative model is a source of political power in states such as Maharashtra and Gujarat, having control over them right before the elections is likely to yield benefits. Amit Shah, BJP’s star electoral strategist, being in command of the ministry has only fueled these apprehensions. Currently, several cooperatives, especially in Maharashtra, are under the influence of the opposition. Senior BJP leaders have talked of uprooting “political monopolies” in the sector.
Senior Congress leader Chennithala said this was a move to “hijack” the cooperative movement while Sitaram Yechury alleged that the centre has their eye on the cash reserves of rich cooperatives. The opposition has also alleged that the move undermines federalism as cooperatives are a subject in the state list. While the BJP highlighted the need for the ministry to ensure the development of multi-state cooperative societies, the opposition pointed out that this is already governed by a Central act enacted in 2002.