All you need to know about the Ministry of Cooperation

Before the mega reshuffle of the Union Cabinet, Prime Minister Narendra Modi had announced the creation of a separate Union Ministry of Cooperation. It was handed over to Home Minster Amit Shah on July 7.

The Cooperation movement was looked after by the Ministry of Agriculture before it got its independent portfolio.

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What are the objectives of the Ministry of Cooperation?

According to a media release by the Press Information Bureau (PIB), the Ministry of Cooperation will work towards strengthening the cooperative movement in the country with a separate administrative legal and policy framework.

“It will help deepen Co-operatives as a true people-based movement reaching up to the grassroots. In our country, a Co-operative-based economic development model is very relevant where each member works with a spirit of responsibility. The Ministry will work to streamline processes for ‘Ease of doing business’ for co-operatives and enable the development of Multi-State Co-operatives (MSCS),” it read.

What is the cooperative movement?

Cooperatives are organisations formed at the grassroots level by stakeholders to attain the power of collective bargaining. The cooperative movement, which officially started with the introduction of the Cooperative Societies Act in 1904, has been seen in various sectors such as agriculture (cooperative dairies, sugar mills, spinning mills), banking and finance, and so on.

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Why was a separate Ministry for cooperations created?

Over the years, the cooperative institutions have experienced drying out of funding. While the capital came from the Centre, in the form of equity or working capital, only a few states like Maharashtra, Gujarat, Karnataka got to enjoy it, while other states could not receive much. It had become important to restore the structure of these cooperatives.

“Various studies conducted by institutions like Vaikunt Mehta Institute of Cooperative Management have shown the cooperative structure has managed to flourish and leave its mark only in a handful of states like Maharashtra, Gujarat, Karnataka etc. Under the new Ministry, the cooperative movement would get the required financial and legal power needed to penetrate into other states also,” Sanjiv Babar, former managing director of Maharashtra State Federation of Cooperative Sugar Mills said to The Indian Express.

How do these cooperative structures influence politics?

The cooperative institutions ranging from the village-level PACS or the urban housing societies have been the starting point of a lot of present leaders. That’s because these cooperatives elect their own board of directors.

Home Minister Amit Shah was the head of the Ahmedabad District Central Cooperative Bank (DCCBs) in Gujarat. Similarly in Maharashtra, around 150 ministers of the legislature have been in connection with the cooperative movement in the past. NCP chief Sharad Pawar and Deputy Chief Minister Ajit Pawar also started their political career through cooperative elections.

How much finance do the cooperative institutions control?

According to the NABARD’s annual report of 2019-20, there are 95,238 PACSs,363 DCCBs and 33 state cooperative banks across the country. The state cooperative banks have reported a total of Rs 6,104 crore paid-up capital and Rs 1,35,393 crore deposits. The paid-up capital at DCCBs was Rs 21,447 crore and the total deposit was Rs 3,78,248 crore.

While the DCCBs distributed Rs 3,00,034 crore in loans, the state cooperative banks disbursed Rs 1,48,625 crore as loans in the same year.