Provision of Rs 900 crore in Budget for Ministry of Cooperation; AMT and surcharge for cooperative societies reduced
A provision of Rs 900 crore has been made in the Budget for the newly formed Ministry of Cooperation. This is even more than double the Rs 403 crore in the Revised Estimates of 2021-22.
Several important announcements have been made for the cooperative sector in the Budget for the financial year 2022-23. The most important of these is the one that proposes to reduce the Alternate Minimum Tax (AMT) that cooperative societies are required to pay. It has been reduced from 18.5 per cent to 15 per cent. The surcharge on co-operative societies has also been reduced from the present 12 per cent to 7 per cent for those having total income of more than Rs 1 crore and up to Rs 10 crore.
A provision of Rs 900 crore has been made in the Budget for the newly formed Ministry of Cooperation. This is even more than double the Rs 403 crore in the Revised Estimates of 2021-22.
An amount of Rs 350 crore has been provided for the digitalization of Primary Agricultural Credit Societies (PACS). The scheme aims to computerize 63,000 PACS, leading to an increase in efficiency, profitability, transparency and accountability in their working. Rs 274 crore has been provided for the umbrella scheme “Prosperity Through Cooperatives”, which would have a number of sub-components.
Dileep Sanghani, President, National Cooperative Union of India (NCUI), has welcomed this year’s budgetary provision related to the reduction of AMT for cooperatives. He said, “This reduction will provide a level playing field to cooperatives, which will be a boon for the societies.” He also welcomed the reduction in surcharge on cooperatives.
Dr Sudhir Mahajan, Chief Executive, NCUI, said, “Any shift in policy in favour of cooperatives is welcome. Cooperatives must be encouraged at all levels.”
GH Amin, former President of NCUI and Chairman of Cooperative Bank of India, welcomed this year’s budget as it will lead to economic growth and encourage start-ups. Appreciating that cooperatives have found their due place, he said the reduction in AMT would provide them a level playing field with the corporates.
Jyotindra Mehta, President, National Federation of Urban Cooperative Banks and Credit Societies (NAFCUB), said that this year’s budget was a big jump to achieve the target of 5-trillion economy. He appreciated the budget’s emphasis on capital expenditure, infrastructure development, digitalization, etc. He said that reduction of AMT and reduction in the surcharge of cooperatives would create more reserves in the balance sheets of cooperatives.
Welcoming the concession to cooperatives in reduction of AMT, B Subrahmanyam, MD, National Federation of State Cooperative Banks (NAFSCOB), and President, International Cooperative Banking Association, said that this step should have come long back. He felt that income tax concessions for cooperatives were still delayed as cooperatives should be completely exempted from income tax. He felt that the Budget had not effectively addressed the issues of agriculture, agriculture credit, cooperation and rural cooperative credit. He further said that the Budget had not recognized the Ministry of Cooperation as not even a single proposal from it had been considered.
