Accusing the Union government of attempting to dismantle the country’s federal system through amendments to the Multi-State Cooperative Societies Act, Kerala’s Minister for Cooperation V.N. Vasavan on Friday said the latest amendments would usurp the powers of the States with regard to cooperatives.
The Lok Sabha had on Wednesday passed the Multi-State Cooperative Societies (Amendment) Bill and is expected to be taken up for Rajya Sabha’s consideration soon.
The Minister said the Supreme Court’s Constitution Bench, in a landmark judgment related to the 97th Constitutional Amendment, had unequivocally stated that cooperation is a State subject. The Supreme Court had also clearly stated that the cooperative sector was a State subject under Entry 32 of the Seventh Schedule of the Constitution. The Union government has come out with the latest amendments to overcome this legal setback and bypass the verdict. This is an approach which undermines democracy, he alleged.
“State governments have no control over multi-State cooperatives. Even the primary obligation of cooperative societies to provide security for investments or to extend credit to common people may not exist under the new law,” Mr. Vasavan said.
“The Union government has also included provisions under which even statutory societies functioning under the State cooperative registrar can be abolished and converted into multi-State societies. Any cooperative society can be converted into a multi-State society by a decision of the governing body and by a majority vote in the general body meeting. To make this process easier, the condition that the State registration must have been cancelled before becoming a multi-State association has been omitted and the condition that it will be cancelled naturally has been included,” he said.
Mr. Vasavan said that the existing restrictions on the cooperative’s assets and capital also would cease to exist. The society will be forced to utilise its assets and income as per the directives of the Union government or big corporate investors, a move which will hamper assistance to the common people and make the cooperatives inaccessible to them as well as small farmers, he added.
The primary purpose of cooperatives as a local economic resource that anyone can rely on at any time will be destroyed with these institutions turning into a work culture similar to the new generation commercial banks that operate only for profits, said the Minister.
Mr. Vasavan said the Supreme Court took a favourable stand towards the States because it was convinced of these issues. It blocked the Union government’s move when it became clear that it was a violation of federal principles.
The cooperatives were always considered as a State subject even when amendments were made over the years to the Cooperative Societies Act of 1912. This has helped formulate local laws that incorporate the particularities and economic conditions of the respective regions, he said.
Cooperatives also played a role in the economic progress of the States as well as in advancements in the agricultural sector. The amendments will be a threat to even those cooperative societies from Kerala which have become a model for the rest of the world through their innovative interventions, he said.
