Govt notifies Co-op Act to strengthen cooperatives

The government has notified the Multi-State Cooperative Societies (Amendment) Act, 2023, paving the way to strengthen cooperatives by making their functioning more transparent, introducing a system of regular elections and prohibiting the appointment of related persons.

The bill received the President's assent after it was approved by the Lok Sabha on July 25 and was passed in the Rajya Sabha by voice vote on August 1 as the opposition staged a walkout earlier. Subsequently, the notification was issued on August 3. The new law is expected to go a long way in achievement of India's target of becoming a 5-trillion-dollar economy which is not possible without the progressive role of the cooperative sector.

The law provides for norms for the appointment of employees, which ensures that there are no nepotism practices. The cooperative sector can, thus, spur jobs as the government is strengthening the cooperatives by expanding their sphere of work into other areas like LPG and petrol pump dealerships. It seeks to establish a 'Cooperative Election Authority' for ensuring electoral reforms in the cooperative sector. It will consist of a chairperson, vice-chairperson and members not exceeding three to be appointed by the central government.

As per the data published by the NCUI, there are about 8.6 lakh cooperatives in the country, out of which active Primary Agricultural Cooperatives (PACs) are around 63,000. In January, the government decided to establish three new multi-state cooperative societies to promote organic products, seeds and exports. A new clause has been inserted in the Act to set up Cooperative Rehabilitation, Reconstruction and Development Fund for the revival of sick multi-state cooperative societies.

The law also provides for concurrent audits for multi-state cooperative societies, a mechanism for redressal of complaints, and the appointment of one or more cooperative ombudsmen and cooperative information officers. Further, it provides for an increase in monetary penalties that will be imposed on these societies in case of contravention of the provisions. Another provision is for the filing of applications, documents, returns, statements, and statements of accounts in electronic form.