Cabinet nod to amend act to bring in transparency in cooperatives sector | The Financial Express

Cabinet nod to amend act to bring in transparency in cooperatives sector

The proposed legislation also seeks to improve the composition of the board and ensure financial discipline, besides enabling the raising of funds in the multi-state cooperative societies, he said.

Cabinet nod to amend act to bring in transparency in cooperatives sector
Currently, there are around 0.8 million cooperative societies of which around 1,500 are MSCS.

The Union Cabinet on Wednesday approved amendments to the Multi-State Cooperative Societies (MSCSs) Act to bring in transparency and accountability in their governance structure.

“The amendments have been introduced to improve governance, reform the electoral process, strengthen monitoring mechanisms and enhance transparency and accountability,” Anurag Thakur, union minister for information and broadcasting said after the Cabinet meeting.

Currently, there are around 0.8 million cooperative societies of which around 1,500 are MSCS.

The government is planning to introduce the Multi-State Cooperative Societies (amendment) Bill, 2022 in the forthcoming winter session of the parliament. The Act was last amended in 2002.

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Thakur said the proposed amendments have been brought in to improve the ease of doing business. The bill also proposes to introduce electronic submission and issuance of documents for ensuring digital ecosystem.

The proposed legislation also seeks to improve the composition of the board and ensure financial discipline, besides enabling the raising of funds in the multi-state cooperative societies, he said.

The bill will incorporate the provisions of the 97th constitutional amendment act, 2011, which have the provisions for co-operative societies in the country.

Cooperation minister Amit Shah had on several occasions stressed the role of cooperatives in dairy, fertiliser, sugar, fisheries, agri-credit sectors and urged for diversification of these bodies to other sectors.

The proposed legislation has specific provisions for setting up of election authority, information officer and ombudsman for the cooperatives.

There are more than 100 multi-state cooperative diaries and 70 multi-state cooperative banks.

For all other operational issues, the MSCS Act and its new amendments will be at play.

For cooperative banks, the banking functions will be governed by the banking regulation act.

For creating a professional management structure, the bill has provisions for bringing in directors with experience in the field of banking, management and finance.

Out of 1500 odd MSCSs in 30 states and union territories engaged in various economic activities including in the dairy, fertilizer and several other sectors. Major chunk of these bodies are in Maharashtra (655), Uttar Pradesh (154), Tamil Nadu (123), Gujarat (42).

The multi-state cooperative societies act, 2002 was enacted with a view to facilitate democratic and autonomous working of these cooperatives.

To boost the export potential of cooperatives where nearly 300 million people are associated with it, the ministry of cooperation (created in July, 2021) is working towards creation of a dedicated exports house. A national database of cooperatives is being prepared.

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First published on: 13-10-2022 at 04:15 IST