Panel wants co-ops to source funds via ECBs, public issues

Written by ASHOK B SHARMA | New Delhi, Sep 25 | Updated: Sep 26 2007, 05:10am hrs
A high-powered committee headed by noted co-operative expert Shivajirao G Patil has suggested that cooperative societies should be allowed to mobilise resources through external commercial borrowings (ECBs) and initial public offerings (IPOs).

The panel, in its interim report submitted to the government recently, has also recommended necessary changes in the law for facilitating the cooperative societies to go for ECBs and IPOs.

In a competitive liberalised economy all players should be given a level-playing field. If corporate houses can be allowed to source cheap funds through ECBs and IPOs, why should the cooperatives be debarred Patil told FE. The panel report also called for a separate chapter in the governments Plan document dealing exclusively on cooperatives.

Patil said the panel made clear recommendations to the government and asked for necessary amendments to the Act governing the cooperative institutions in the country.

There should be a single regulation in the country for cooperatives. The state governments should not be allowed to supercede the governance of cooperative societies on unjustified grounds. Cooperatives are grassroots public institutions and therefore should not remain under the control of the government and the bureaucracy. Immediate elections to the board should be conducted, he said.

The Patil panel has also suggested appropriate financial package for bailing out ailing cooperatives. If the government can bail out Unit Trust of India when it was affected by a scam, then why cant it do so for the sick cooperatives where public money is involved he said.

Patil has also chaired another panel set up by the National Cooperative Development Corporation (NCDC) to suggest measures for reviving the sick cooperatives. The report suggested detailed measures for bailing out ailing cooperatives in different sector like banking, sugar, tobacco, marketing, textiles.