Multi-State Cooperative Societies (Amendment) Bill, 2022

Multi-State Cooperative Societies (Amendment) Bill, 2022

Why in news :

  • Recently, the bill to amend the Multi-State Cooperative Societies (MSCS) Act, 2002 was introduced in the Lok Sabha.
  • The bill seeks to amend the 2002 law for more “transparency” and “ease of doing business”.

Key amendments proposed in the bill :

  • It aims to improve Governance, reform the electoral process, strengthen monitoring mechanisms.
  • It also aims to improve the transparency and accountability in multi-state cooperative societies.
  • The bill provides for the creation of a central Co-operative Election Authority to supervise the elections of the MSCSs.
  • The proposed authority will have a chairperson, vice-chairperson, and up to three members appointed by the centre.
  • It also aims to create a Cooperative Rehabilitation, Reconstruction and Development Fund for the revival of sick multi-state cooperative societies.
  • The fund shall be financed by existing profitable multi-state co-operative societies.
  • It has provisions to appoint a Cooperative Information Officer and a Cooperative Ombudsman whose aim is to make the governance of MSCSs more democratic.
  • To improve the equity and inclusivity, there are provisions for representation of women and SC/ST members on the boards of MSCS.

Issues with the bill :

  • The creation of Co-operative Election Authority may lead to the concentration of power in the hands of Centre which in turn affects the autonomy of the MSCSs.
  • With the Creation of Co-operative Rehabilitation, Reconstruction and Development Fund, there would be an extra pressure and burden on the MSCSs to deposit the money into the Fund.
  • The opposition parties also alleged that the bill’s provisions encroached upon the rights of state governments.

What is meant by Cooperatives?

  • According to the International Cooperative Allaince (ICA), cooperatives are people­ centred enterprises jointly owned and democratically controlled by the members to realise common economic, social and cultural needs and aspirations.

What are Multi State Cooperative Societies ?

  • Multi-State cooperatives are societies that have operations in more than one State. For example, a farmer ­producers organisation which procures grains from farmers from multiple States.
  • There are close to 1500 MSCSs registered in India with the highest number being in

Cooperative Societies in India :

  • The 97th Constitutional Amendment Act, 2011 gave constitutional status and protection to the cooperative societies in India.
  • It made the right to form co-operative societies a fundamental right (Article 19).
  • It introduced a new Directive Principle of State Policy to promote co-operative societies (Article 43-B).
  • It added a new part which is part IX-B in the constitution.

Common issues faced by the Co-operative Sector :

  • They are vulnerable to the influence of ruling political party in power.
  • They don’t have proper autonomy and independence which is crucial for their functioning.
  • MSCSs are facing trust issues, the principle on which they are based.

Recent Supreme Court Judgement on Cooperative Societies :

  • The Supreme Court has struck down parts of 97th constitutional amendment act,2011.
  • The 97th CAA has reduced the exclusive authority of states over its cooperative societies.
  • The provisions in the Amendment, passed by Parliament without getting them ratified by State legislatures as required by the Constitution is the reason for the nullification of some of the provisions.
  • The apex court held that co-operative societies come under the “exclusive legislative power” of State legislatures.
  • The court, however upheld the constitutional provisions related to multi-state cooperative societies.

Syllabus : Mains; GS2 – Governance