Introduction of Constitutional Amendment Act: A Historical

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Introduction of Constitutional Amendment Act:
A Historical Perspective
T. Paranjothi*
R. Elangovan**
Introduction
The subject of Constitutional Amendment has been the topic of discussion
right from 1996. There was a statement from the then Minister for
Agriculture and Cooperation Dr. Jaganath Mishra that the Constitution
would be amended to preserve the democratic character of cooperatives.
Many political parties also mentioned about cooperatives in their election
manifesto The National Cooperative Union of India was pressing for the
Constitutional Amendment and UPA-I Government based on the observation
of High Powered Committee headed by Shri Shivajirao Patil took up this
issue. The Conference of the State Minister of Cooperation held in December
2004 endorsed the views to incorporate certain provisions in the
Constitution to provide protection to cooperatives and to insulate them from
avoidable political and bureaucratic interference.
Accordingly, the Constitution (One Hundred and Sixth Amendment) Bill,
2006 was introduced in Fourteenth Lok Sabha on 22.5.2006. On reference
from the Honorable Speaker, the Parliamentary Standing Committee on
Agriculture had also examined the Bill. However, the Bill could not be
considered by the House as it lapsed. The Constitutional (One Hundred and
Eleventh Amendment Bill) was introduced in Lok Sabha on November 30 ,
2009 and referred to the Standing Committee.
The Constitutional Amendment after discussion by the Standing Committee
on Agriculture and considering the views of Department of Agriculture and
Cooperation was introduced in the Parliament and passed by the Lok Sabha
and Rajya Sabha respectively on 22nd and 28th December 2011. The
amendment received the assent of the President of India on 12th January
2012 and a Gazette notification was issued on 13th January 2012. The
Central Government also issued the official notification and the same came
into force w.e.f. 15th February 2012 making it binding on the State
Government to introduce the amendment (Extra ordinary Part II Section 3
Sub section (ii) No. 234 dated 13th February 2012, S.O. No. 265 E of the
Ministry of Agriculture, Department of Agriculture and Cooperation,
Government of India).
--------------------------------------------------------------------------------------------
*Professor and Head, Centre for Research and Publications, Vaikunth Mehta National Institute of
Cooperative Management, Pune 411 007, email: tparanjothi@vamnicom.gov.in
**Associate Professor, Centre for Management Development Programme, Vaikunth Mehta National
Institute of Cooperative Management, Pune 411 007, email:relangovan@vamnicom.gov.in
1
The State Governments of Bihar, Gujarat, Haryana, Karnataka, Kerala,
Madhya Pradesh and Uttar Pradesh have amended their Act and the same
is approved by the Assembly. The states of Maharashtra and Tamil Nadu
have brought in Ordinance. The legislative changes have taken place due to
the ILO recommendations 193.
The article proposes to discuss about Constitutional Amendment from a
historical perspective. The article is divided into six sections. The first
section outlines the features of the Constitutional Amendment Act 2011.
The second section brings out the election manifesto of political parties and
also views of the Coopertive Development Foundation, Hyderabad. The
third Section discusses the ILO Resolution 193. The fourth section presents
the recommendations of the Standing Committee on Agriculture, the views
of Department of Agriculture and Cooperation and the observations of
Administrative Reforms Commission. Section five presents the Loksabha
debate and the reply of Honourable Minister of Agriculture. Section six
presents the Rajya Saba debate and reply of Honourable Minister of
Agriculture.
SECTION - I
The main features of the Constitution (97th amendment) Act 2011 are as
follows:
1. Citizens now have the fundamental right to form co-operative
societies, as the words or co-operative societies.
2. The State shall endeavour to promote voluntary formation,
autonomous functioning, democratic control and professional
management of cooperative societies.
3. The Legislature of a State may, by law, make provisions with respect
to the incorporation, regulation and winding up of cooperative
societies based on the principles of voluntary formation, democratic
member control, member economic participation and autonomous
functioning.
4. The maximum size of the Board shall not exceed 21 members and its
term (as also of the Office-Bearers) 5 years. SC/ST members and
Women members will have 1 and 2 seats reserved for them
respectively on the Board. The Board is allowed to fill casual
vacancies by nomination from the particular category of members if
its term is less than half of its original term. Co-option of 2 persons to
be allowed on the Board, who are having experience in the fields of
banking, management, finance or specialization in any other field
2
relating to the objects and activities undertaken by the society. Such
co-opted members shall not have vote in the election of office-bearers
nor are they eligible to become office-bearers. Functional Directors of
the co-operative society shall also be the members of the Board. Coopted members and Functional Directors shall be in addition to the
maximum size of 21.
5. The election of a board shall be conducted before the expiry of the
term of the board so as to ensure that the newly elected members of
the board assume office immediately on the expiry of the office of
members of the outgoing board.
6. The superintendence, direction and control of the preparation of
electoral rolls for, and the conduct of all elections to a cooperative
society shall vest in such an authority or body, as may be provided by
the Legislature of a State, by law.
7. No board shall be superseded or kept under suspension for a period
exceeding six months. In case of supersession of a board, the
administrator appointed to manage the affairs of such cooperative
society shall arrange for conduct of elections within the period
specified and handover the management to the elected board.
8. The audit of accounts of a society shall be completed within 6 months
from the close of the financial year. The state law shall specify the
minimum qualification and experience required by an auditor or an
auditing firm. The auditor shall be appointed by the general body of
the society from out of the list approved by the Government/Authority
appointed by Government. The audit report of the Apex Society shall
be placed before the State Legislature.
9. The Annual General Body Meeting shall be convened within 6 months
from the date of close of financial year.
10. Members shall have access to accounts, books and documents kept
by the society as part of its regular transactions. Further, the state
laws shall specify the minimum requirement of attending meetings as
also the minimum level of services the members should attend/avail
from the society.
11. Make provisions to ensure the participation of members in the
management of the cooperative society providing minimum
requirement of attending meetings by the members and utilizing the
minimum level of services as may be provided in such law.
12. Provide for cooperative education and training for its members.
3
SECTION -II
ELECTION MANIFESTO OF POLITICAL PARTIES
Congress-I
-
Usher in a new policy for cooperatives to restore their democratic
structure and autonomy of management
Bhartiya Janata Party
To strengthen the cooperative movement the BJP will
Free cooperatives from political interference
Prevent the intrusion of vested interests
Simplify rules and regulations governing the functioning of
cooperative societies
Make entry in pass books mandatory for all money deposits
Only those entirely dependent on agriculture will be allowed to
become members of farmers cooperative societies
Ensure free and timely elections to cooperative bodies
Janata Dal
Agriculture and rural development
Export and import of agricultural commodities will be handled by
marketing cooperative societies of farmers
Schedule castes and scheduled tribes
Cooperative of producers among SCs/STs engaged in crafts cottage
industries and collection of MFP will be encouraged
Samata Party
Decentralisation and Federalism
Decentralisation and Federalism: We believe that a democratic cooperative movement, owned and controlled by its members, is our
people’s best hope for economic and social justice. It shall be our
endeavour to create the conditions for an autonomous, self reliant
and democratic co-operative movement in our country. Cooperatives alone can assure remunerative price to the producer
and fair price to the consumer for essential articles or commodities
They could strengthen our democratic fibre and are the most effective
instruments of socio-economic transformation. Just as the 73rd and
74th Amendments have liberated Panchayati Raj and Nagarpalika
Institutions, we are committed to free co-operatives from the clutches of
bureaucracy; restore them to their members and strengthen cooperatives to genuinely serve all sections of our society.
4
Poverty Alleviation
-
A powerful efficient and dedicated co-operative movement can play
purposeful and effective role in this regard.
Agriculture and Rural Economy
-
Co-operative agriculture will be encouraged in consultation with
those willing to participate in such an endeavour
Cooperative Development Foundation Views
The Cooperative Development Foundation, Hyderabad (1996) vehemently
opposed the Constitutional Amendment for the following reasons:
-
State Cooperative laws do undermine the democratic nature of
cooperatives, but the solution does not lie in dealing with the
managing aspects of any form of business (cooperative in this
instance), in the Constitution of India. When the desire is that
cooperative law should not contain what the byelaws of a
cooperative should contain, the question of having such matters
included in the Constitution simply does not arise.
-
State cooperative laws also undermine the right and responsibility
of the general body of a cooperative to appoint auditors, and again,
the solution can hardly lie in shifting that right and responsibility
from the Registrar of Cooperatives to an independent body set up
under the Constitution.
-
The setting up of an independent body for the conduct of elections
to cooperatives, and again for the audit of the accounts of
cooperatives, through a Constitutional amendment, will mean an
affirmation of the false image deliberately protected since
independence, that cooperatives are part of State.
-
The proposal to set up a fund to meet the cost of audit and election
commission makes it abundantly clear that the whole exercise is
one, aimed at ensuring that government officials whose
departments are starved for want of funds and because of strength
far in excess of sanctioned strength, can be rehabilitated in the
commissions with cooperatives footing the bill. The protection to
be offered will further ensure that the non-performance or malperformance that they are accustomed to, continues to be fully
protected.
-
The proposal to amend the Constitution of India addresses none of
these concerns – it simply ensures that in this age of liberalisation,
cooperators will continue to feel distanced from their institutions,
and that they will continue to be captive clients of the department
5
of cooperation in their new avatar, meeting their costs, ensuring
their livelihoods, carrying on their shoulders the ominous burden
of subsidizing the government.
-
The proposal must be rejected outright.
SECTION -III
ILO RESOLUTION 193
International Agencies and Coopertive Development
The role of international communities and agencies in promoting, nurturing,
developing and monitoring the progress of coopertives is phenomenal. The
international agencies like United Nations Organisation (UN), Food and
Agricultural Organisations (FAO) and International Labour Organisations
(ILO) all of them have played a significant role
in developing and
spearheading the causes of the movement and to take the cooperative
movement to a new height. The declaration by UN, the year 2012 as
International Year of Cooperatives with the theme of 'Cooperative Enterprise
Build the Better World' signifies the importance attached by these
international agencies.
Role of ILO and Cooperatives
ILO plays a crucial role in the protecting the interest of the working class,
looks upon cooperatives as a potential tool in the developing the living
standards of the people by the public and private sectors. Cooperatives
provided on employment to over 100 million jobs and they are the torch
bearer of ILO's Global Employment Agenda and contribute to promoting
decent work.
ILO activities are guided by the international standard on cooperatives, the
ILO Recommendations on the Promotion of Cooperatives, 2002 (R.193). Its
Cooperative Branch (EMP/COOP) serves ILO constitutents and cooperative
organisations in four priority areas:
-
-
-
Raising public awareness on cooperatives through evidence based
advocacy and sensitisation to cooperative values and principles.
Ensuring the competitiveness of cooperatives by developing
tailored tools to cooperative stakeholders including management
training, audit manuals and assistance programmes.
Promoting the inclusion of teaching of cooperative principles and
practices at all levels of the national education and training
systems.
Providing advice on cooperative policy and cooperative law,
including participatory policy and law making and the impact on
cooperatives of taxation policies, labour law, accounting standards,
and competition law among others.
6
Partnerships for cooperative promotion
The ILO works in partnership with the International Cooperative Alliance
(ICA) the representative world body of cooperatives and is a member of the
committee for the Promotion and Advancement of Cooperatives (COPAC), an
interagency
committee
which
promotes
sustainable
cooperative
development. It also collaborates with cooperative development agencies
and training institutions.
Genesis of ILO Resolution 193- Some Stylized Facts
At its 74th Session (March 1999) the Governing Body of the International
Labour Office decided to place on the agenda of the 89th Session (2001) of
the International Labour Conference the question of the promotion of
cooperatives.
In accordance with article 39 of the Standing Orders of the Conference,
which deals with the preliminary stages of the double - discussion
procedure, the office drew up a preliminary report intended to serve as a
basis for the first discussion of the question. The report contains an
introduction to the question, an examination of the changing environment of
cooperatives in developing, transition and industrialized countries and an
analysis of the prerequisites for success in the promtion of cooperatives
based on the law and practice in various countries. The report was
accompanied by a questionnaire and was communicated to the governments
of member States of the ILO, which were invited to send their replies so as
to reach the Office not later than 30 June 2000. Ninety Five member states
replied to the report and around 60 member states stated that the reply is
prepared after due consultation with the employees' and workers
organisations.
The ILO had an earlier Recommendation, number 127, adopted in 1966.
Since the time of the adoption of Recommendation No. 127, Cooperatives
(Developing Countries), political, economic and social changes have affected
the situation of cooperatives throughout the world.
As a result, in March 1999, the ILO's Governing Body decided that a new
universal standard could help enable cooperatives to develop more fully
their self-help potential, placing them in a better position to meet current
socio-economic problems such as unemployment and social exclusion, and
help them compete in a global market place. At about the same time, the
United Nations began debating new guidelines on cooperatives, which were
adopted by the General Assembly on 19th December 2001. The ILO
Governing Body's decision to revise Recommendation No. 127 was based on
the following:
The focus of Recommendation No. 127 was limited to developing countries
while new roles for cooperatives in both the industrialized and the former
communist countries had emerged in the last thirty years.
7
Promoting Cooperatives1
-
-
-
-
Recommendation No. 127 mirrored the development concerns of
the 1960s where cooperatives were seen primarily as tools in the
hands of the government.
The recommendation thus
overemphasised the role of the government in cooperative
development and underestimated the autonomous character of
cooperatives. In accordance with the reformulated universally
recognised cooperative principles, the Governing Body considered
that cooperatives should be regarded primarily as a means for
their members to achieve their common economic and social goals.
Their autonomy as a form of private enterprise guided by ethics
and principles should be upheld.
In many countries, political, economic and social changes have put
pressure on government to limit its involvement in economic and
social affairs. The State's role is increasingly limited to that of
providing the political, legal and administrative framework for the
development of private organisations including cooperatives.
Recommendation No. 127 had yet to take account of these
developments.
In industrialised countries, new forms of cooperatives and new
cooperative enterprise structures had emerged to take advantage of
the challenges and opportunities opened up by globalisation and
technological changes. Heightened competition from other forms
of business enterprises had also necessiatated these changes.
These facts required recognition in a new ILO standard on
cooperatives.
In 1995, the International Cooperative Alliance had held its
Centenary Assembly and adopted a new Statement on the
Cooperative Identity.
This clearly redefined
cooperatives as
autonomous, member led enterprises, with a distinctive set of
values and principles. An extract from the Statement forms part of
the text of Recommendation 193.
so to assist countries in
developing a new legal and policy framework for cooperatives,
Recommendations 193 was adopted.
It is the only international policy framework on cooperatives, and has been
adopted by a tripartite organisation bringing together employers, workers
and governments.
It has come at an opportune time. The idea -the myth some would say that the free market, company driven model could solve economic problems
has been seen to be untrue. A different model of enterprise, business driven
and democratically controlled, can offer a different way.
ILO Resolution 193
Cooperatives are also one of the most 'natural' phenomena in the world.
After all we have more than eight hundred million members.
8
But cooperatives have become invisible in many countries and in much
development theory. They are too often dismissed as a relict from the past.
Our model of solidarity combined with enterprise is too often ignored by
policy makers.
Recent years have seen a growing realisation that cooperatives have a great
deal to offer, not only for our members, customers and employees, but also
for society as a whole.
An expression of that renewed interest in
cooperatives is the ILO's Promotion of Cooperatives Recommendation 2002
(No. 193).
The ICA and its membrs have worked together with ILO constituents in
order to incorporate the cooperative view into the text of the instrument. As
Mr. Juan Somavia, the ILO's Director General, has pointed out that the
Recommendation "is the only international policy framework for cooperative
development that has the added value of being adopted by governments,
employers' organisation and trade unions, and supported by relevant civil
society organisations".
The definition and scope of the Resolution 193 states that
"Measures should be adopted to promote the potential of cooperatives in all
countries, irrespective of their level of developemnt, in order to assist them
and their membreship to:
(a) Create and develop income generating activities and sustainable
decent employment.
(b) Develop human resource capacities and knowledge of the values,
advantages and benefits of the cooperative movement through
education and training.
(c) Develop their business potential, including entrepreneurial and
managerial capacities
(d) Strengthen their competitiveness as well as gain access to markets
and to institutional finance
(e) Increase savings and investment
(f) Improve social and economic well-being, taking into account the need
eliminate all forms of discrimination
(g) Contribute to sustainable human development
(h) Establish and expand a viable and dynamic distinctive sector of the
economy, which includes cooperatives, that responds to the social
and economic needs of the community
Resolution 193 provides a framework for governments to develop the laws,
administrative
systems and policies that can enable cooperatives to
flourish. The ICA played a central role in developing the Recommendation.
ICA members were present in all three constituencies at the International
Labour Conferene that adopted the Recommendation - governments,
employers and workers.
9
Recommendation 193 is not an end in itself. It must be translated into
action. We need to ensure both that national poverty reduction strategies
promote cooperatives and that we develop the mechanisms to enable people
to organise themselves and bring the power of cooperation into their
communities.
Importance of the Resolution 193
One may think how this resolution will help the nation in bringing a change
in the outlook of cooperatives? When the recommendation is put into
practice one can see a different face of cooperatives. The Report of the
Director General ILO 2003 states that 'the core tools cooperatives need in
order to flourish are advice on capacity building, entrepreneurship
development, leadership training, market research, accessing loan finance
and grant aid, inter cooperative networking, and federation building. For
such grass-roots support to work effectively, cooperatives need a secured
legal framework governing their status'.
Much cooperative legislation dates from the colonial era, the post-colonial
period, when many governments supported cooperatives, but often did not
allow them the autonomy which is essential for them to thrive. In former
centrally planned economies, where the government in reality controlled
cooperatives, laws passed in the 1990s, in the immediate post-communist
period, may be inappropriate.
Key points of the Resolution
-
Cooperatives operate in all sectors and all countries
(Recommendation 127 was limited to developing countries)
Cooperatives are based on principles and values
The ICA statement of cooperative identity which states those values
and principles is accepted as the basic definition of a cooperative
Cooperatives should enjoy equal treatment with other types of
enterprise
Governments should create an enabling environment and facilitate
access to support services
Employers'
and
workers'
organisations
should
promote
cooperatives
Cooperatives should cooperate internationally
The role of Government
-
To provide a conducive policy and legal environment
To grant support when justified by special circumstances
To develop partnerships with cooperatives where appropriate
10
The role of employers' organisation
-
To extend membership and provision of services to cooperatives
wishing to join.
The role of workers' organisation
-
To assist cooperative employees to join trade unions
To assist trade union members to establish cooperatives
To participate in setting up cooperatives to create or maintain
employment
To promote productivity, equality of opportunity and rights of
worker members
To undertake education and training
The role of cooperative organisations
-
-
To work with the social partners (employers' and workers'
organisations) to create a favourable climate for cooperative
development
To provide technical, commercial and financial support services
To promote the horizontal and vertical integration of cooperatives
To invest in human resource development
To represent cooperatives at the international level, and encourage
international collabortion
Progression of ILO Resolution 193 in Indian context
Indian cooperatives in the recent past suffered on account of the lack of
focus, loss in direction and absence of conducive legal and policy
framework. Considering the effect of ILO resoulution 193 and its impact on
the functioning of cooperatives it is truly god sent prasadam to cooperatives
and other stakeholders. As mentioned earlier the preliminary report has
been prepared before finalisation of the resolution and India being the
member nation replied to the questionniare albeit the absence of discussion
with the stakeholder of the resolution2.
As the recommendation of ILO is mandatory on the part of the Government
of India (GoI) the GoI responded to the recommendation and suggestions,
sought and also opposed some of the aspectes of the recommendation. The
question is whether the Government of India is earnestly implementing the
recommendation 193? What are the steps taken by Government of India in
this direction? What is the plan of action of Government of India? How
many cooperatives are aware of the recommendation and its implication? All
these questions need to be addressed by the Government. The Government
of India on its part announced the New Cooperative Policy with an
assurance to empower the cooperatives and make them as an alternative
institutional mechanism against the market force and to protect the weak.
Further the Government introduced the Constitutional Amendment Act
2011. However according to the recommendation the role of Government is
much bigger and there are still a long way to go.
11
All the stake holders need to get involved further to make the Constitutional
Amendment Act proceed in the right direction. Cooperatives being a state
subject it would be advisable for the State Governments to discuss the ILO
Resolution and place the same before the Assembly and debate it in a
comprehensive manner so that the fruits are seen.
SECTION -IV
STANDING COMMITTEE ON AGRICULTURE
The Standing Committee on Agriculture headed by Shri Basu Deb Acharia
was briefed by the representatives of the Ministry of Agriculture (Dept. of
Agriculture and Cooperation) on the Bill on 12th January 2010 and they
also decided to invite suggestions/views of various stake holders on the Bill
through an advertisement in the media. 37 Individuals/Organisations
responded and written suggestions/memorandum were received. Evidences
from National Coopertive Union of India, National Agricultural Cooperative
Marketing Federation of India Ltd., National Cooperative Consumer's
Federation of India Ltd., Krishak Bharati Cooperative, National Federation of
Urban Cooperative Banks and Credit Societies Ltd., Indian Farmers
Fertiliser Cooperative Ltd., National Cooperative Development Corporation,
National Cooperative Agriculture and Rural Development Banks Federation
Ltd., National Federation of State Cooperative Banks Ltd, National Bank for
Agriculture and Rural Development were collected. The Committee took oral
evidence of the representatives of Ministry of Agriculture (Deptt. of
Agriculture and Cooperation) and Ministry of Law and Justice (Legislative
Department) on 5th August 2010. The Committee considered and adopted
the report at their sitting held on 20th August 2010 and submitted it on
27th August 2010.
The States of Andhra Pradesh, Assam, Meghalaya, Nagaland, Tripura, West
Bangal, and four Union Territory Administrations of Andaman and Nicobar,
Daman and Diu, Delhi and Lakshadweep forwarded their views to the
Committee.
The Standing Committee discussed in detail the suggestions/ proposals
received
from
Experts/Organisations/Stake
holders
/State
Governments/Union Territory Administration on various clauses of the Bill.
12
The recommendations of the Standing Committee and the views of the
Department of Agriculture and Cooperation (DAC) are presented below:
Sl. Recommendations of the committeeViews of DAC
No.
1
2
3
4
Article 19(1) (c) of the Constitution says
that all citizens shall have the right to form
associations or unions‘. The Committee
have been informed that the Department of
Legal Affairs of the Ministry of Law and
Justice, Government of India is of the
opinion that the word associations‘ in
Article 19(1) (c) of the Constitution includes
the words cooperative societies also. A view
has been expressed in the Committee that
the word associations‘ does not include
cooperatives‘. The Committee, therefore,
recommends that the Government should
examine whether the words cooperative
societies‘ can be inserted after the word
associations‘ in the aforesaid Article.
The Committee further recommended that a
new Article 43B on Empowerment of
Cooperatives may be added in Part – IV of
the Constitution that contains Directive
Principles of State Policy, which may read
as under: ―43B
Empowerment of Cooperatives: The state
shall endeavour to promote voluntary
formation, autonomous functioning,
democratic control and professional
management of the cooperatives.
Cooperative Societies is a State subject
under Entry 32 of the State List of Seventh
Schedule of the Constitution. The
Committee is of the firm view that the
Central Government should not interfere in
the day-to-day affairs of the cooperative
societies.
The Committee is of the unanimous opinion
that a comprehensive amendment to the
Constitution on cooperatives is not
necessary. They, therefore, recommend that
The Constitution (One Hundred and Sixth
Amendment)Bill 2006‘ should be converted
into a comprehensive central model law for
voluntary formation, autonomous
functioning, democratic control and
professional management of the
13
The issue has been examined in
consultation with Ministry of Law and
Justice. The Department is of the
view that amendment to Article
19(1)(c) is not required as the word
association‘ includes cooperative
societies. Further, a new clause 43B
is proposed to include the provision of
cooperative societies in Directive
Principles of State Policy. Therefore,
this recommendation of the
Committee could not be accepted.
Accepting the recommendation of the
Committee, it is proposed to add the
following provision: ―43B
Promotion of Cooperative
Societies: The state shall endeavour
to promote voluntary formation,
autonomous functioning, democratic
control and professional management
of cooperative societies.
Regarding the recommendation that
the Central Government should not
interfere in the day-to-day affairs of
the cooperatives, it is the policy of the
Central Government not to interfere
in the day-to-day affairs of the
cooperative societies. Nor there is any
provision in the Constitution (106th
Amendment) Bill, 2006 providing any
power to the Central Government
even for any action or directive for the
governance of cooperative societies,
leaving aside the interference in dayto-day working of the cooperatives.
This recommendation is accepted.
The Committee‘s view is that a
comprehensive amendment to the
Constitution is not necessary and has
recommended to convert the Bill into
a comprehensive Central model law.
During the discussion in the meetings
of the Committee as well while
replying to the Points for Discussion,
the Department has made it clear
that the said model law will not serve
cooperatives with certain incentives and
disincentives to the State that implement or
not implement the model law. The States
can enact their own laws on the subject,
however, State Laws should be compatible
with the Central Model Law.
the purpose. This is mainly on
following grounds:(a) Any such model law would be only
advisory in nature and it is for the
State Governments to follow the suit
or not. In fact, it can not be termed as
‗Central model law‘. The
recommendations of the ‗Model
Cooperatives Act‘ as recommended by
Choudhury Brahm Perkash
Committee are already there but the
states are not adopting them in their
State Acts.
(b) The basic aim to bring this
Constitution Amendment Bill is to
provide for certain provisions in the
Constitution regarding the conduct of
elections, audit, tenure and size of the
board etc. which are considered basic
to the democratic and professional
management of cooperatives and
being the constitutional provision,
these will be mandatory to be
conformed in the State Legislations.
(c) As the Cooperative Societies is a
State Subject, Central Government
has no legislative jurisdiction to enact
such a model law. If such a model law
is prepared by the Central
Government as advisory to the States,
the recommendation of the
Committee that the state law should
be compatible with the Central model
law will not be implementable.
5
The Committee recommended that no
person should be allowed to become the
office bearer of the cooperative society for
more than two consecutive terms. However,
he will again be eligible to contest the
elections after a gap of full one term.
14
Due to aforementioned reasons,
this recommendation of the
Committee could not be accepted.
Regarding restriction on holding office
for more than two consecutive terms
the Multi-State Co-operative Societies
Act has a similar provision
prohibiting Chairman or President of
Multi-State Cooperative Society to
hold such office for more than two
consecutive terms. However, the High
Power Committee while giving its
interim report on amendments to
MSCS Act has recommended that this
restriction should be removed. There
are both pros and cons on this issue.
While viewing the concept of
democratic member control over the
6
7
8
The Committee noted that Clause 243ZJ
specifies that the maximum number of
Directors shall not exceed twenty-one
except in the case of a State level
cooperative society. It has been observed
that in many cases there are very large
boards and it is very difficult to arrive at
reasonable decision. The Committee,
therefore, recommended that the maximum
number of directors including functional
directors should be restricted to twenty-one
for all cooperatives irrespective of their
sizes. Hence, the words except in case of a
State Level cooperative society‘ should be
deleted from the proviso to Clause
243ZJ(1).
The Committee recommend that in the
second proviso to the Clause 243ZJ(3) for
the words Vice-Chairman or Vice-President,
Chairman or President of the board, the
words office bearer of the board‘ may be
substituted.
The Committee feel that though the
cooperative societies are not part of local
governance like panchyati raj institutions
and municipalities and should be allowed to
conduct their own elections, however, they
are of the opinion that major ill of
15
cooperatives, it can be said that it is
for the members to decide that for
how long a member holds a certain
office. On the other, when this
provision was introduced, it was with
the basic intention to prevent the
vested interests from holding an office
of cooperative society for a longer
period. However, it would be
advisable that this issue may be
left to the State Legislature and
need not to provide in the Bill.
Otherwise also no provision has
been provided in the Bill regarding
disqualifications or any prohibitory
provision for being chosen as a
member of the board or its office
bearer. Therefore, this
recommendation of the Committee
could not be accepted.
This recommendation of the
Committee has been accepted to
keep the maximum number of
directors as twenty-one for all the
cooperative societies. However, the
functional Directors would be in
addition to this limit, to ensure that
adequate number of elected Directors
are there on the Board.
Clause 243ZJ(3) provide that the coopted members shall not cast vote in
the election of the Chairman or
President, Vice-Chairman or VicePresident. Clause 243 ZH(e) defines
the words ‗office bearers‘ means a
President, Vice-President,
Chairperson, Vice-Chairperson,
Secretary or Treasurer of a
cooperative society and includes any
other person to be elected by the
cooperative society.
This recommendation of the
Committee is accepted.
Under the Multi-State Co-operative
Societies Act, the responsibility to
conduct the election is that of the
board of directors. To make the
cooperatives member driven
organizations the concept of conduct
cooperative sector is their election process.
They, therefore, recommend that the matter
should be further examined so as to have
free, fair, impartial and timely elections of
the cooperative societies conducted by the
State Election Commission or any other
appropriate independent body.
9
The Committee note that in the Bill it is
stated that the board of cooperative
societies shall not be superseded where
there is no government shareholding or
loan or financial assistance or any
guarantee by the Government‘. The
Committee note that the shareholding by
the Government has not been qualified and
even if the Government have one rupee as
shareholding, it will have the right to
supersede the board of the cooperative
society. These unfettered powers to
Government as proposed in the Bill will
affect the autonomy of the Cooperatives
adversely. The Committee are of the
opinion that the board of cooperative
society should not be superseded where
government shareholding is less than 51
per cent.
10
The Committee are of the opinion that there
is a need to set up Cooperative Members
Grievances Redressal Forum‘ to decide all
types of disputes arising in respect of
16
of election by a cooperative itself
conforming to principle of democratic
management. However, in practice, as
observed by the Committee the
election process is a major ill of the
cooperative sector. The elections are
not held regularly or the election
process is vitiated for one reason or
another. Moreover, the magnitude of
the problem has to be examined in
view of the large spread of primary
cooperative societies in the states.
Most of these societies are financially
weak and many of them even may not
bear the expenses if the elections are
held by the State Election
Commission on pattern of the
panchayat raj institution. It is,
therefore, proposed that accepting
the recommendation of the
Committee elections may be held
by an authority as may be provided
by the State Legislature in law.
The Multi-State Co-operative Societies
Act, 2002 provide for supersession of
a multi state society only in the case
where Government equity is not less
than 51%. The existing provision in
clause 243 ZL was proposed keeping
in view the overall spread of
cooperative societies in the country,
the stake of the State Governments
by way of share holding, loans,
government guarantee, etc. In case of
Multi-State Cooperative Societies Act,
there are very few multi-state
cooperative societies where the
Government equity is there.
Otherwise also safeguards have been
provided in this clause to prevent
misuse of the provision by the
Government such as; maximum
period of supersession not exceeding
six months (one year in case of
cooperative banks), responsibility of
the administrator to arrange for the
elections of the board within this
period and supersession of board only
on tangible grounds.
Therefore, this recommendation of
the Committee could not be
accepted.
After careful examination of the
recommendation of the Committee,
this Department is of the view that
there are already provisions in the
constitution, business, management, or any
other activity of the cooperative society.
This may deliver cheap and quick justice to
the members of the cooperatives.
11
The Committee observed that the spirit of
an independent audit may be diluted if the
cooperative society being audited has a
hand in the choice and appointment of its
auditors. There may be chances that
although officially the general body will
appoint the auditors, it is the Board of
Directors of the concerned cooperative
society, whose choice will actually prevail to
the detriment of auditing ethics, given the
reality that most of the members of the
cooperative society are neither deeply
involved nor have the time and information
required to make the best choice. The
independent audit can be ensured only if
audit is carried out by the auditor from the
government approved panel of auditors /
audit firms or through a separate
government organization say for example
Directorate of Audit. The Committee are of
the opinion that the Director of Cooperative
Audit should be made answerable to the
State Legislature.
State Cooperative Laws providing for
mechanism for settlement of disputes
etc. Further, it will also add to the
multi-layer mechanism already
provided in the State Acts for the
settlement of disputes,
inspection/inquiry etc. Moreover, if
these provisions are added in the Bill,
it would be touching the governance
of cooperatives, which is not the
intention of the Bill and therefore,
should be left to the wisdom of the
State Legislature. Therefore, this
recommendation of the Committee
could not be accepted.
The Committee has recommended
that in order to ensure independent
and impartial audit, the auditor
should be appointed from the
Government approved panel or
through a separate Government
organization say Directorate of Audit.
Accepting the recommendation of
the Committee, it is proposed to
provide a provision in clause 243
ZM to the effect that the auditor
shall be appointed out of a panel
approved by the Government/
Registrar.
Administrative Reforms Commission
The 9th Report of the Commission agreed with the recommendations of the
Standing Committee and was of the view that the objective of the proposed
amendment can be better achieved by simply adding an Article as a
Directive Principle where the State could be made responsible for making
laws which will ensure autonomous, democratic, member driven and
professional cooperative institutions. This could be in the form of a new
Article 43B as recommended by the Standing Committee.
SECTION - V
17
LOK SABHA DEBATE
The discussion on the motion for consideration of the Constitution (One
Hundred and Eleventh Amendment Bill, 2009) was moved by Shri Sharad
Pawar, Hon'ble Minister for Agriculture and Minister for Food Processing
Industry on 21st December 2011.
The full text of his speech is given in
Annexure-I.
Shri Anto Antony (INC) participating in the debate requested the
Government to amend article 243ZO (1) of the bill stating that the Division
Bench of Kerala High Court has declared that the provisions of Right to
Information Act is not applicable to the cooperative societies. He submitted
that the aforesaid article may kindly be amended in such a way that a
member shall have access to the books, information and accounts of
the society with regard to that particular person and other records
having general nature.
In respect of article 243ZJ (1) the representation of cooperative employees in
the board is not mentioned.
He was of the view that employees are the
major factor behind the growth of co-operative societies excluding them
from the board is injustice. Therefore, he requested the Government to
kindly ensure the representation of employees in the board. Hence, he
requested the Government to insert the following proviso in the Article 243
ZJ (1):
“Provided further that there shall be a director co-opted by the Board from
among the employees of the Society to which the election is made, according
to the majority decision of the employees of that society and such Director
shall have all rights and privileges of an elected member except for voting in
18
the election of the office bearers of that Board and also being elected as
office bearer of that Board.”
He requested the Government to insert a new paragraph into the article 243
ZJ and suggested the following:
“Provisions can also be made for co-option in case of the absence of elected
directors from the ward and in such cases the co-opted members shall not
have the right to vote in any election of the co-operative society in their
capacity as such member or eligible to be elected as office bearers of the
Board.”
He was also of the view that the opinions of professionals should be
reckoned and the words "shall be excluded" needs to changed to "shall be
included".
He also opined that the functional directors of cooperative
society shall be included for the purpose of counting total number of
directors.
In respect of state control Shri Anto Antony remarked
" I also take this
opportunity to express my concerns over the dilution of the control of the
State Governments. Absence of State control may push cooperative societies
into a competitive market of financial institutions. Cooperative societies are
not profit-making institutions and, therefore, suffer a lot in a laissez-faire
system. Hence, I would request the Government not to dilute the control of
the State Government in this regard".
Shri Shailendra Kumar (SP) strongly supported the Bill. He observed that
some cooperative societies are enjoying monopoly and they need to be paid
special attention and curtailed accordingly. As far as primary societies are
concerned he mentioned that there are no service rules and many societies
do not have business plan. He suggested that measures should be taken to
monitor the financial support provided.
19
Shri Jagdish Sharma (JDU) supported the provisions in the Bill and
pleaded for model act exclusively for cooperatives.
He appreciated the
provision for granting autonomy to the cooperatives through this Bill.
Shri Ramashankar Rajbhar (BSP) supported the Bill.
He pleaded for
reservation of SC, ST, OBC, Women and minorities in the Board of
management.
He raised whether this Bill would facilitate and ensure
trading of agricultural produce with other States. He pleaded for providing
loans with very less rate of interest or even without rate of interest for
trading in agriculture produce.
Smt (Dr.) Ratna De (AITC)
explained the provisions in the Bill and the
urgent need to strengthen the cooperatives. She commended the Standing
Committee recommendations. She was of the view that not more than one
person from a family should be a member of a society. The menace of the
middlemen should be stopped.
She was optimistic that the passage of
Constitutinal Amendment Bill would bring the much needed sea change in
the very face of the coopertaive movement in our country.
Shri Anandrao Adsul (SS) supported the Constitutional Amendment Bill
and remarked that restructuring the number of Board of Directors to 21 is a
good amendment. He requested to include the representative of employees
in the board. He supported the bill stating that "Sir, in totality, I have seen
that there are very good provisions which will definitely give safety to the
Central Act, viz., the Cooperatives Act. It will serve the purpose. That
purpose is that those societies are of the common people and definitely the
common people will get the benefit out of it".
Shri R. Thamaraiselvan (DMK) commended the amendment envisaged in
the Bill. He was of the view that cooperative farming has not gained any
20
importance in India while in many parts of the world it has been successful.
He mentioned that the area under cultivation can be increased. He pleaded
for increasing the reservation for S.C., S.T. and women and also supported
the views of his colleagues that the employees of coopertives societies also
should be given proper representation.
Shri A. Sampath [CPI (M)] suggested some amendments in the bill. In the
first page, second para tenth line, I want to include the phrase “and also pay
financial aid to ensure social justice”.
In
para 243 ZK, line 14, it has to be “at least three months” before the
expiry of the term of the board of directors. As per the present bill it would
mean, that elections can be conducted even one day prior to the expiry of
the term of a cooperative society. This could lead to further disputes,
therefore, elections in cooperative bodies should be held at least three
months prior to the term of expiry of an elected society.
In Article 243(ZH) he wanted
to add clause ' suspension for a period of six
months'. He proposed it should be “the total period of suspension should
not exceed six months during the whole tenure of a board”.
Regarding clause 243 ZL, “If any of the provisions of the clauses 1-5 of the
above, article 343 ZL is violated Government should not interfere” must be
changed. The bill clarifies that non interference by Government is warranted
wherever, Government does not have share holding, or does not give grant
or aid. This could mean that if affluent sections of society, constitute a
cooperative body, and function as a cartel, then cooperative societies can
turn to corporate houses. It can even lead to a situation, were, cooperative
societies can become instruments for misappropriating the wealth of the
country. In such cases, as per the bill, the Government will be made
incapable of interfering or superseding. Even in the case of Charitable
Societies Act Government can intervene or supersede. In the clause-by21
clause
consideration
of
the
Bill
Advocate
A.
Sampath
moved
the
amendments which were put to vote and negatived.
Shri
Rudra
Madhab
Ray
(BJD)
apprehended
whether
the
state
governments will actually devolve powers to the cooperatives because in
Article 243 (G) of Part IX, it has been clearly mentioned that subject to the
provisions of this Constitution, Legislature of a State may, by law, endow
the panchayats with such powers and authority as may be necessary to
enable them to function as institutions of self-governments.
He also doubted that whether by this amendment, the Government of India
can compel the States to make devolution.
He had objection to three
clauses of this Bill. In Article 243Z J(1) of Part IX B, para 3, it has been
mentioned that provided further that the Legislature of a State may, by law,
provide for reservation of one seat for the Scheduled Castes or the
Scheduled Tribes. This means, one seat will be reserved either for the
Scheduled Castes or for the Scheduled Tribes. But where the thickness of
population of the Scheduled Castes and the Scheduled Tribes is more, one
section of the population will be overlooked. He suggested that one seat
should be reserved for the Scheduled Castes and another seat should be
reserved for the Scheduled Tribes so that this will go to the State
Governments and they can decide.
He quoted that the High-powered Committee constituted by the Government
to review this Bill have categorically stated that those persons who have
been defeated in the election for the Board of Directors should not be coopted and wanted to add this clause.
Shri S. Semmalai (AIADMK) supported the bill and welcomed it.
He
suggested that a suitable provision is to be incorporated to restrict the term
22
of the Officer of the President of the Cooperative Society to not more than
ten years, that is, for two terms only.
By restricting the term of the
President, it may be ensured that no vested interest is developed. In respect
of provision to supersede he apprehended that this provision may be used
arbitrarily by the authorities. Hence he suggested that a show cause notice
should be given detailing the irregularities committed and given reasonable
opportunities to the Board to place its defects. He felt that incorporation of
suitable provision in this regard will remove any ambiguity.
Shri Prabodh Panda (CPI) remarked the amendment is a blow to the very
concept of the autonomous aspect of the cooperative sector. He mentioned
that this Bill is going to dilute the concept of autonomy of cooperatives by
including it in the Directive Principles of State Policy and by taking away the
autonomy of cooperatives in an indirect manner and this is a step to
corporatize the cooperative sector. He was of the view that the proposed
provisions of the bill should not be included in the Constitution and it can
be included as a separate schedule under Article 19 (1) (c). He also stated
that this is a sort of encroachment on the rights of the states and very
essence of the autonomous system of the cooperative sector should not be
diluted.
Shri Shivaramagouda (BJP) welcomed the Constitutional Amendment Bill.
He wanted the number of Directors should be fixed according to the number
of districts in the concerned state so that the representatives from all the
districts would get priority in the state apex cooperative bodies and
requested the Hon'ble Minister to look into this aspect.
He further
mentioned "they must not be treated as a part of the Government machinery
like the institution of local governance which have been established as the
third tier of the government following the 73rd Constitutional Amendment".
Shri Jagadanand Singh (RJD) congratulated and supported the Bill. He
mentioned that society should not be superseded but Officials involved in
fraud and misappropriation should be punished. He suggested that clause
23
relating to
superseding the societies should be removed and weaker
sections should be empowered to manage the cooperatives.
Shri Prasanta Kumar Majumdar (RSP) strongly opposed the bill. He stated
that "The cooperative societies is a subject enumerated in Entry 32 of the
State List of the Seventh Schedule of the Constitution and the State
Legislatures have accordingly enacted legislations on cooperative societies.
However in spite of expansion of cooperatives, their performance and
functioning have not been upto the desired level. Therefore proper vigilance
and monitoring must be there to streamline their performances.
The
Central Government must ensure that the cooperative societies run well and
in a sound manner.
Currently, the principles of autonomy, fundamental
right and the voluntary nature of the societies are being diluted.
A new
Article 19 (C) must be inserted in Part IV of the Constitution (Directive
Principles of State Policy) for the states to strive to promote voluntary
formation, autonomous functioning, democratic control and professional
management of cooperative societies and Article 43 (B) should be removed.
Wherever two or three states have set up one cooperative, that too is being
run by an existing law of 2002.
The Centre should not interfere in the
functioning of the states in as far as cooperatives are concerned. The States
rights must be safeguarded and the Government should not encroach upon
those prerogatives".
Shri Kameshwar Baitha (JMM) strongly supported the Bill. He cited the
brand image of 'Amul' products and 'Dhara' oil created in Gujarat. He was
of the view that this type of image need to be replicated in other states. He
opined that the tribals in Jharkhand, Orissa, West Bengal, Chattisgarh,
Andhra Pradesh need to be organised into a cooperative society and given a
membership card authorising them to collect Tendu leaves.
24
Shri Ramkishun (SP) welcomed the Bill. He was of the view that whereever
Officials commit misappropriation there should be a provision of fine as
punishment.
Shri Kaushalendra Kumar (JD) spoke in favour and strongly supported
the Bill. He requested the Minister to bring in more amendments to improve
the functioning of PACS.
Shri Arjun Ram Meghwal (BJP) said "The axiom of the cooperative
movement is 'one for all, all for one' several things except this axiom, are
dealt within this amendment".
He observed no effort has been made to
correct the long term NPA which increased due to the wrong policies of the
government.
He further added that "The recommendations of the prior
Committees have not been acceded to in this amendment. It is not clear as
to how the resources would be available at the cost price. No means has
been suggested to get rid from the clutches of the middlemen. There is a
provision for 21 members cap in the Board of Directors, which is not good.
The tenure of the Board is fixed for 5 years. Only one seat has been given for
both SC and ST in the Board and they do not have voting right. This is not
right. One separate seat each for ST and SC should be given with voting
right".
Dr. M. Thambidurai (AIADMK) said "I oppose this Bill".
The reply of the Hon'ble Minister for Agriculture and Cooperation in the Lok
Sabha is given in Annexure -II.
Shri Sharad Pawar, Minister of Agriculture moved the amendment stating
“That this House do suspend clause (i) of rule 80 of the Rules of Procedure
and Conduct of Business in Lok Sabha in so far as it requires that an
amendment shall be within the scope of the Bill and relevant to the subject
matter of the clause to which it relates, in its application to the Government
amendment No.3 to the Constitution (One hundred and Eleventh
Amendment) Bill, 2009 and that this amendment may be allowed to be
moved.”
25
The new clause 1A added to the Bill was voted in favour of by 320 members
and the motion was adopted.
SECTION -VI
RAJYA SABHA DEBATE
The motion for consideration of The Constitution (One Hundred and
Eleventh Amendment) Bill was moved on 28th December 2011 by Shri
Sharad Pawar in the Rajya Sabha. He stated that though the cooperatives
have grown, their performance in qualitative terms was not up to the
desired level and there is intervention in their day-to-day functioning. He
mentioned that right to form a cooperative society is a fundamental right
and empowers the Parliament in respect of multi-state cooperative societies
and the State Legislatures in case of other cooperative societies. He further
stated that these provisions will not only ensure the autonomous and
democratic functioning of cooperatives, but ensure the accountability of
management and also provide for deterrence. The text of his speech is given
in Annexure -III.
Shri Balavant alias Bal Apte (BJP) stated that it is right time to recognise
cooperatives as economic institutions and efforts are required to rid the
cooperative societies of the various ills. He remarked “Those who run these
cooperative societies are barons.
Therefore, apart from giving them
constitutional status, active action to rescue these societies from these
barons has to be taken. The great prejudice is being shown by the Central
Government towards the cooperative sector.
A substantial economic
provision has to be made". He felt that if the Governmental funding goes
through the cooperaives, it will certainly go to the people. He was optimistic
that the Constitutional Amendment will have a consequence of actual
action.
26
Dr. E. M. Sudarsana Natchiappan (INC) pleaded for prohibiting the system
of many of the State Governments having their own officials. He expressed
happiness that this Constitution Amendment will give them six months time
till the notification of this Amendment and there will be an election
throughout India.
Shri P. Rajeeve (CPI (M)) opposed the Constitution Amendment Bill stating
the Central Government is trying to encroach upon the right of the State
Governments to make legislation with regard to cooperative societies. He
said “ The Standing Committee on Agriculture after hearing the views of all
the stakeholders, recommended against the Constitutional Amendment Bill.
Hence, this Bill is a direct attact on the Directive Principles of State Policy”.
Prof . S.P. Singh Baghel (BSP) did not support the Bill in the present form.
He said the people who do not know even the fundamentals of cooperative
movement, become the Chairman of giant cooperative organisations.
He
presented the pathetic condition of cooperatives in Uttar Pradesh. He was
of the view that the Chairman of a cooperative society should be elected
directly by the members
representatives of
instead of delegates.
He wanted the
minorities and backward classes should also be
included.
Prof. Anil Mumar Sahani (JD(U)) questioned “What action has been taken
to make cooperative movement a leading movement”?
27
He wanted an
independent committee should be constituted to conduct elections of all the
societies in the whole country.
Dr. Janardhan Waghmare (NCP) observed cooperative movement is
an
alternative to capitalist economy as well as socialist economy. He spoke on
the achievements of cooperatives in Maharashtra, citing, sugar, dairy and
wanted to find out ways and means to strenghten this movement in the face
of the pressures of global economy. He was of the view that much more
investment is needed in the cooperative sector.
Shri Pyarimohan Mohapatra (Independent) remarked that through this
Bill, the powers of the States are being sought to be snatched away. He
urged the Honourable Minster not to derogate the Constitution by pushing
this kind of a thing in the Constitution.
Shri D. Bandyopadhyay (AITC) viewed the Bill can give economic power to
the powerless.
He urged upon the Government to consider to having a
separate and independent Election Commission since it is not possible for
the Registrar alone to supervise a huge organisation.
Shri Veer Pal Singh Yadav (SP) said cooperative movement would be
benefitted by this amendment on a large scale and it would give a new life to
the movement. He was of the view that this amendment will remove most of
28
the shortcomings of the system.
He wanted a cadre of secretaries of
cooperative societies and sought representation for OBC.
Shri M.P. Achuthan (CPI) suspected the aim of the Bill is to encroach upon
the
genuine rights of
the States and there is no need to bring such a
constitutional amendment as cooperative movement in every state has got
its own specific features.
Shri Birendra Prasad Baishya (AGP) was of the view that vested interests
should take serious note of this and the Bill is against the federal structure
of the country.
Dr. Prabhakar Kore (BJP) said "I welcome the Bill because I come from
cooperative movement. In some of the cooperative institutions like sugar
factory, the member must have his land. Otherwise he cannot become a
member. in that case, what this Act is going to do? Most of the cooperative
institutions, banks and sugar factories are covered under taxation which is
our aim".
Shri Jesudasu Seelam (INC) mentioned that this is a very good and
important piece of legislation to reform a vital sector.
He spoke of the
achievements of cooperatives in India and wanted financial discipline. He
supported the Bill as it would help more than 6.5 lakh cooperatives and the
sector would grow.
29
Dr. Barun Mukherji (ALFB) felt that the Bill is superfluous and there was
no need to bring this Bill at all. He stated "cooperative sector is run by the
people and for the people. Cooperative movement was started to help the
helpless poor people, to give assistance in the form of credit and monetary
support, and also various types of other supports. We would like that it
should grow in its own way. In many of the States the Cooperative Act has
been amended and has taken care of many of the objects that are being
proposed by this particular Bill". He pleaded for reservation of OBCs.
Dr. K.P. Ramalingam (DMK) expressed apprehensions and said that “I am
afraid that this Bill may erode the strength of the State Governments...I
would like to make it clear that our nation is functioning in a federal setup.
Federal structure has to be honoured". He further stated that cooperatives
come under the control of States and said “I have a doubt as to what is the
need to bring this Bill now?...I would like to ask whether this amendment is
necessary at this time. If so, will it not deprive the State Governments of
their power?" He said if the state governments are deprived of all of their
powers, "gradually, I fear that it will lead the state governments to demand
autonomy".3
Shri Vijayakumar Rupani
(BJP) mentioned that for the success of
cooperative movement the office bearers of cooperative society should
remain changed and their elections should be held periodically.
Shri Mani Shankar Aiyar (INC) drew the attention to the provision in
243(z)(i), which specifically says that subject to the provisions of this part,
30
the legislature of a State may by law make the required provisions. He said
there is no attempt to invade the territory of the State Governments. He
cited voluntary associations, democracy, interference by State Governments,
professionalisation were the reasons for cooperatives not living up to the
expectations.
He stated
“Members from SC, ST and women category
should be included in the board of cooperative societies. No Government
should be allowed to interfere in the autonomous functioning of a
cooperative society. To complement part 9 and 9 (a) of the constitution part
9 (b) should be added giving constitutional status to the cooperatives. We
must also bring in part 9 (c) giving constitutional status to the Nyaya
Panchayat. At that point the people of India will believe that we are with
them'.
Smt. Maya Singh (BJP) urged upon the Honourable Minister that there
should be a reservation of 50 percent for women in the boards of cooperative
societies on the lines of 50 percent reservation for women by Governments
in Panchayats, Municipal Councils and Municipals Corporations.
Shri Biswajit Daimary (BPF)
supported the Bill and urged upon the
Honourable Minister that the amendments should be implemented properly
so that the poor and backward people living in rural areas may be able to
know about and get the benefits of cooperative movement.
31
Shri Mohammed Addeb (Independent) supported the Bill. He mentioned
the minorities particularly the muslims are not linked with the cooperative
movement and wanted them to be included in the Bill.
Shri Ram Kripal Yadav
(RJD) supported the Bill.
contribution of sugar cooperatives, dairy cooperatives.
movement is almost dead in many States
He cited the
He observed the
including Bihar and the
institutions connected therewith are lying closed. “A lot of property is being
destroyed.
The cooperative movement is of no use if people are not
associated with it. The movement is in the grip of few people. We will have
to revive the movement.
Where there are rural-based products, people
should be connected with the cooperative. We can initiate white revolutioon
by means of the movement. Chilling plants should be set up to store milk
from various villages.
unemployment.
In this way we can alleviate poverty and
The cooperative societies can distribute seeds, fertilizers,
coal and foodgrains. That is how black marketing of these things can be
checked. The State Governments are hitting at the freedom and autonomy
of the cooperative societies.
decreased.
On account of this, their efficiency has
The participation of women can be useful.
The Government
should ensure the reservation of backward classes like that of the SC, ST
and women. Minorities such as Muslim, Jains, Sikhs, etc. should also be
give reservation".
In respect of the clause 243ZJ, the word ‘and’ should
replace the word ‘or’ so that one each member of SC and ST can represent
in the board of member”.
32
Prof. Ram Gopal Yadav (SP) supported the Bill.
He pointed out the
irregularities committed by the State Governments and pleaded for
reservation to the SCs, STs, Women, OBCs and minorities.
The Honourable Minister replied to the Debate by thanking the House for
supporting the Constitutional Amendment Bill.
He spoke on the
contribution of leaders, disbursement of agricultural credit, their role in
fertilisers, milk agro-processing and PDS.
He delved at length on
democracy, management and conduct of elections. He also spoke on the
rights of legislature, revival of the cooperative sector, public distribution
system, empowering the poor in cooperatives. The reply of the Honourable
Minister is given in Annexure -IV. 154 members voted in favour of the Bill
and 43 voted against the Bill. Thus the Bill was passed by a majority of the
total membership of the House and by a majority of not less than two-thirds
of the Members of the House present and voting.
33
Annexure - I
Introduction of the Bill in the Lok Sabha
Hon. Members are aware that the Cooperative Societies is a State subject
under Entry 32 of the State List of the Seventh Schedule of the
Constitution. Accordingly, the States have enacted their own Cooperative
Societies Acts for incorporation, regulation and winding up of cooperative
socieites within their territorial jurisdiction. However, for incorporation, etc.
of the cooperative societies with objects serving the interests of the Members
in more than one State, the Parliament enacted Multi-State Cooperative
Societies Act, 1984 under Entry 44 of the Union List of the Seventh
Schedule replacing the Multi-Unit Cooperative Societies Act, 1942. The Act
of 1984 has since been replaced by the Multi-State Cooperative Societies
Act, 2002.
Since Independence, cooperative
movement has grown significantly with
most extensive network of cooperative institutions all over the country.
These cooperative institutions are functioning in the sectors of agricultural
credit, agricultural inputs, marketing of agricultural produce, storage and
processing of agro produce, urban credit, housing, production of fertilisers,
dairy, fisheries, handlooms, and handicrafts etc.
expericenced that in spite of
However, it has been
considerable numerical expansion of
cooperatives in different sectors of the national economy, their performance
in qualitative terms has not been up to the desired level. Many of these
institutions are not being managed on principles of democratic member
control and professional management. In many cases, these cooperatives
are heavily dependent on financial support from the Government, which
has led to intervention in their
day to day functioning. There are also
instances of avoidable political interference in working of these institutions.
In this direction, the Government has enunciated a National Policy on
Cooperatives. The Multi State Cooperative Societies Act, 2002 has also been
enacted with a view to provide a guiding framework for State legislations,
34
though its application is limited to only those cooperative societies with
objects serving interests of members in more than one State. It has been the
endeavour of the Government of India to evolve an appropriate policy and
legislative framework to create environment conducive to the healthy and
sound growth of cooperatives. It has been felt that there are several
provisions in the State Acts, which go beyond the spirit of democratic
functioning of cooperatives, for which State Governments have been
persuaded to amend their Acts. However, in spite of the felt need for
amendments in the State Acts, the pace of reforms in cooperative
legislations by the States is not encouraging. Therefore, a view has emerged
in the cooperative sector, all over the country, to incorporate certain
provisions in the Constitution to provide protection to cooperatives and to
insulate them from avoidable political and bureaucratic interference. This
was also endorsed by the Conference of State Cooperative Ministers held
way back in December, 2004.
Accordingly, the Constitution (One Hundred and Sixth Amendment) Bill,
2006 was introduced in Fourteenth Lok Sabha on 22.5.2006. On reference
from
the
Hon.
Speaker
the
Parliamentary
Agriculture had also examined the Bill.
Standing
Committee
on
However, the Bill could not be
considered by the House as it lapsed.
It was decided to re-introduce the Bill for amendment to the Cooperatives.
The Constitution (One Hundred and Eleventh Amendment) Bill, 2009 has
been introduced in the Lok Sabha on 30.11.2009. The hon. Speaker, Lok
Sabha referred the Bill to the Parliamentary Standing Committee on
Agriculture. The Standing Committee after holding discussions with
Secretary and other officers of the Department of Agriculture and
Cooperation, State Governments, Experts and other stakeholders in the field
th
of cooperatives, presented its Report to Lok Sabha on 30 August, 2010.
35
The suggestions made by the Standing Committee have been examined in
the Department in consultation with the Ministry of Law and Justice. It has
been decided with the approval of the Cabinet in its meeting held on
1.12.2010 to accept one of the main recommendations of the Standing
Committee that is right to form cooperative societies as a Fundamental
Right by amending Article 19 (1) (c) of the Constitution. The Bill already
takes care of another important recommendation of the Committee to set up
a specialized agency on the lines of Election Commission for conducting
elections of the Cooperative Societies.
The object of the Constitution (One Hundred & Eleventh Amendment) Bill
2009 is to ensure that the Cooperative Societies in the country function in a
democratic, profession, autonomous and economically sound manner. The
proposed amendment in the Constitution, interalia, seeks to empower the
Parliament in respect of multi-state Cooperative Societies and the State
Legislatures in case of other Cooperative Societies to make appropriate law,
laying down the following matters, namely:a) Right to form Cooperative Societies as a Fundamental Right by
insertion of the words ‘Cooperative Societies’ in sub clause (c) of
clause (1) of Article 19.
b) Insertion of Article 43B in part IV of the Constitution as Directive
Principles of State Policy for voluntary formation, autonomous
functioning, democratic control and professional management of
Cooperative Societies.
c) Provisions for incorporation, regulation and winding up of
cooperative based on the principles of democratic member-control,
member-economic participation and autonomous functioning;
d) Specifying the maximum number of Directors of a Cooperative
Society not exceeding twenty-one members;
e) Providing for a fixed term of five years from the date of election in
respect of the elected members of the board and its office bearers;
36
f) Providing for a maximum time limit of six months during which a
Board of Directors of a Cooperative Society could be a superseded
or kept under suspension;
g) Providing for independent professional audit;
h) Providing for right of access to information to Members of
Cooperative Societies;
i) Empowering the Government to obtain periodic reports of activities
and accounts of Cooperative Societies;
j) Providing for reservation of one seat for the Scheduled Castes or the
Scheduled Tribes and two seats for women on the Board of every
Cooperative Society, which have individuals as members from such
categories; and
k) providing for offences relating to Cooperative Societies and
penalties in respect of such offences.
It is expected that these provisions will not only ensure the autonomous and
democratic functioning of cooperatives, but enhance the public faith in
these institutions and also ensure the accountability of management to the
Members and other stakeholders and also provide for deterrence for
violation of the provisions of the law.
The Bills seeks to achieve these objects.
37
Annexure-II
Reply by the Honourable Minister for Agriculture to the Debate in Lok
Sabha
Madam Speaker, at the very outset, I would like to thank all the hon.
Members of this House for giving such overwhelming support to the
proposed Bill. I congratulate the hon. Members for their keen interest and
concern for strengthening the cooperative sector in the country, which has
emerged as one of the most important institutions to serve the economically
weaker sections of the society.
I am very grateful to the hon. Members who have given very useful
suggestions for making improvements in the governance of cooperative
societies in the country.
Madam, as I have already indicated in my speech yesterday, the
cooperative movement has seen considerable growth in many important
sectors of the economy.
Madam, with your permission, may I lay the rest of my speech on the
Table of the House?
An overwhelming majority of about six lakh cooperatives are registered
under the respective State Cooperative Societies Act. Only about 600 MultiState Cooperative Societies are registered in the country under the MultiState Cooperative Societies Act, 2002, which is a Central Act. Therefore, the
States have to primarily take steps to strengthen the cooperatives in the
country. The Government of India is always prepared to guide and support
the States in this endeavour.
The cooperative movement in the world is more than 200 years old. In
our country also, cooperative style of working has been part of our life and
prevalent for centuries. However, the cooperative societies were formally
incorporated when the Cooperative Credit Societies Act, 1904 was passed.
The State of Assam and Tamil Nadu were the first to introduce cooperative
banks to provide credit to the weaker sections of the people. The cooperative
societies namely Rajahauli Village Bank, Jorhat, Jorhat Cooperative Town
Bank and Charigaon Village Bank, Jorhat in Assam and Tirur Primary
Agricultural Cooperative Bank Limited, in Tamil Nadu were constituted in
the year 1904. This was closely followed by the cooperatives registered in
Madhya Pradesh, Punjab, Odisha, Karnataka and West Bengal in the year
1905.
A Model Cooperative Societies Act was finalized in 1990 on the
recommendations of an Expert Committee under the chairmanship of Ch.
Brahm Prakash to take the cooperative movement forward and suggest a
future direction for cooperatives. However, since 'Cooperation' is a State
38
subject, certain difficulties were experienced in making amendment in the
State Cooperative Acts on the lines of Model Cooperatives Act.
Subsequently, Parallel Cooperative Legislation for self-reliant cooperatives
have been proposed for the governance of those cooperatives, which have
not received any assistance from the government. So far, only 9 States have
enacted this Parallel Cooperative Act, which provides for more autonomous
and democratic functioning of cooperatives.
The Parliament has also enacted the Multi State Cooperative Societies
Act for promoting cooperative societies with objects not confined to one
State and serving the interests of members in more than one State. The
Multi State Cooperative Societies Act with its progressive provisions for the
democratic member control and autonomous functioning, has helped to
create successful national level cooperatives such as IFFCO and KRIBHCO.
The IFFCO was registered on November 3, 1967 as a cooperative
society. The society is primarily engaged in production and distribution of
fertilizers. It is a unique venture in which the farmers of the country
through their own cooperative societies created this new institution to
safeguard their interests. The number of cooperative societies associated
with IFFCO have risen from 57 in 1967 to 39,824 at present. IFFCO's
annual capacity has been increased to 3.69 million tonnes of Urea and
NPK/DAP equivalent to 1.71 million tonnes. In addition, essential agroinputs for crop production are made available to the farmers through a
chain of 158 Farmers Service Centre (FSC). IFFCO has promoted several
institutions and organizations to work for the welfare of farmers.
KRIBHCO has setup a Fertilizer Complex to manufacture Urea,
Ammonia & Bio-fertilizers at Hazira in the State of Gujarat. Late Shrimati
Indira Gandhi, former Prime Minister of India laid the Foundation Stone on
February 5, 1982. Annual capacity for Urea and Ammonia is 1.729 million
MT and 1.003 million MT respectively. The Bio fertilizer plant has a capacity
of 250 MT per year capacity. Ten Seed Processing Plants are also in
operation in various states.
Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF) was
established in 1973. It is India's largest food product marketing organization
with dairy milk procurement of approx 12 million lit (peak period) per day
from 15,712 village milk cooperative societies, 17 member unions covering
24 districts, and 3 million milk producer members. It is the Apex
organization of the Dairy Cooperatives of Gujarat, popularly known as
'AMUL', which aims to provide remunerative returns to the farmers and also
serve the interest of consumers by providing quality products. Its success
has not only been emulated in India but serves as a model for rest of the
World. GCMMF is India's largest exporter of Dairy Products. It has been
accorded a "Trading House" status. For its consistent adherence to quality,
39
customer focus and dependability, GCMMF has received numerous awards
and accolades over the years.
I am very happy to inform Hon'ble Members that the right to form
cooperative societies is proposed to be made a Fundamental Right under
Article 19 (1) (c) of the Constitution as recommended by the Standing
Committee on Agriculture. It is expected that this would give boost to the
cooperative movement and enthuse the people to actively participate in the
cooperative as a matter of right. This would significantly increase the
interest and responsiveness of the members and strengthen the cooperative
movement further.
Many hon. Members have suggested that there should be employees
representation in the management of the cooperative societies. The
employees of any working organization play a key role in ensuring success
of the organization. In a way, the long term interests of the employees are
closely linked to the well-being of the organization in which they work. They
can play a very useful role in the organization to meet its objectives. The
proposed amendment provides for having the functional Directors on the
Board of a cooperative society to utilize their experience and expertise for
improving the functioning of the society. These functional Directors would
be the employees of the society. There is also a provision for co-option of the
persons who have the expertise in the field related to objects and activities
undertaken by the society, as members of the Board. The employees, among
others, would also be eligible for being appointed as members of the Board
of the society in this category. Further provisions, if required, in this regard,
may be brought up by the States in their respective Cooperative Societies
Act.
Many hon. Members have given their views on the supersession and
suspension of the Board of Directors by the Government. While some
members advocate more powers to the Government to supercede the Boards
of even those societies where there is no financial assistance from the
Government, others feel that this power should either be taken away or it
should be severely restricted. I am of the view that the power to supercede
or suspend the board of a cooperative society should be used only in
exceptional circumstances; only in those cases, where there is serious
negligence in the performance of duty or where serious irregularities
prejudicial to the interests of the society are committed. However, it has
been noticed that there are many instances of supersession and suspension
of the Board on very routine and less serious grounds. It is also found that
elections are not held for many years for the societies which seriously affects
their democratic member control and autonomous functioning. As per the
report furnished by NABARD, elections are yet to be held in the States of
Andhra Pradesh, Manipur, Odisha and Tamil Nadu. We have tried to build
up proper checks and balances to ensure that the power of supersession
and suspension is not used indiscriminately or frivolously. The proposed
40
Constitutional amendment specifies the major cases where such
supersession or suspension may be resorted and it also limits such action
in respect of those societies where some financial assistance has been
provided by the Government. It also provides for mandatory conduct of
elections within six months of such supersesson by an independent
authority. Thus, adequate safeguards have been built in to prevent the
misuse of this power by the concerned officers.
An issue has been raised whether the cooperative societies are covered
under the provisions of the RTI Act. The RTI Act secures access to
information under the control of public authorities for citizens in order to
promote transparency and accountability in their working. As most of the
cooperative societies would not fall under the category of 'Public Authority',
therefore, they may not be covered under the provisions of this Act.
However, there have been certain orders from various Courts in this regard.
The High Court of Kerala in WP No. 1417 of 2009 - Thalapalam Service
Cooperative Vs Union of India & Others has held that whether a society is a
public authority, is a disputed question of fact, which is to be resolved by
the authorities under RTI Act. However, it is in the interest of cooperative
societies to have well-informed active members, which only can ensure
successful functioning of the cooperative institutions. In view of this, it has
been provided in the proposed amendment that the members of the
cooperative society would be entitled to secure important information about
the working and business of the society. This would bring in much desired
transparency and fairness in the working of the societies.
The proposed amendment would go a long way to address the problems and
deficiencies that the cooperatives face today. It would not only ensure the
autonomous and democratic functioning of the cooperatives but enhance
the public faith in these institutions. It would also ensure the accountability
of management to the members and other stakeholders and also provide for
deterrence for violation of the provisions of the law. It is expected that the
cooperative movement would be further strengthened by this amendment
and would be able to serve the members particularly those from
economically weaker sections much better.
41
Annexure III
Introduction of the Bill in the Rajya Sabha
THE MINISTER OF AGRICULTURE (SHRI SHARAD PAWAR): Sir, I beg to
move: That the Bill further to amend the Constitution of India, as passed by
Lok Sabha, be taken into consideration. Mr. Deputy Chairman, Sir, I feel
privileged to seek the support of this august House for the very important
Constitution (One Hundred and Eleventh Amendment) Bill, 2009, to
strengthen the cooperative movement in the country. The year 2012 will be
celebrated as the Year of Cooperation all over the world. The cooperatives
are one of the most important instruments to provide service to the
economically weaker sections of the population and have a widespread
reach up to the village level. Hon. Members are aware that 'Cooperative
Societies' is a State Subject under Entry 32 of the State List of the Seventh
Schedule of the Constitution. Accordingly, the States have enacted their
own Cooperative Societies Acts for incorporation, regulation and winding up
of cooperative societies within their territorial jurisdiction. However, for
incorporation, etc., of the cooperative societies with objects and area of
operation not confined to one State and serving the interests of members in
more than one State, the Parliament enacted the Multi-State Cooperative
Societies Act, 1984, under Entry 44 of the Union List of the Seventh
Schedule (replacing the Multi-Unit Cooperative Societies Act, 1942). The Act
of 1984 has since been replaced by the Multi-State Cooperative Societies
Act, 2002.
The cooperative movement in the country has witnessed substantial growth
in many diverse areas of the economy. With a network of about six lakh
cooperative societies and a membership of about 24.92 crore, the
cooperative movement in India has emerged as one of the largest in the
world. The cooperative movement today provides coverage to almost 97 per
cent of the villages and 71 per cent of the rural households. The agricultural
credit advanced through cooperatives has increased from a meagre Rs.214
crore in 1960-61 to Rs.70,105 crore in the year 2010-11, with about 19 per
cent share in total institutional agricultural credit. The share of cooperatives
in fertilizer distribution is about 35 per cent, and in sugar production, it is
nearly 46 per cent. The cooperatives also account for 33.5 per cent of wheat
procured. Fifty-four per cent of the handlooms and 20 percent of the retail
fair price shops are in the cooperative sector. The cooperative sector
provides direct and self-employment to about 16.69 million people in the
country. It has been experienced theft in spite of considerable numerical
expansion of cooperatives in different sectors of the national economy, their
performance in qualitative terms has not been up to the desired level. Many
of these institutions are not being managed on principles of democratic
member control, autonomous functioning and professional management. In
many cases, these cooperatives are heavily dependent on financial support
from the Government, which has led to intervention in their day-to-day
functioning. There are also instances of avoidable political interference in
42
working of these cooperative institutions. It has been the endeavour of the
Government of India to evolve an appropriate policy and legislative
framework to create environment conducive to the healthy and sound
growth of cooperatives. With this in view, the Government of India has taken
various measures for promoting and developing the cooperative sector in the
country. These include, inter-alia, framing of national policy on cooperatives,
enactment of the Multi-State Cooperative Societies (MSCS) Act, 2002,
assistance to cooperative education and training, assistance through NCDC
for development of cooperatives, implementation of recommendations of
Prof. Vaidyanathan Committee and constitution of high-powered Committee
on Cooperatives etc. It has been felt that there are several provisions in the
State Acts, which go beyond the spirit of democratic functioning of
cooperatives, for which the State Governments have been persuaded to
amend their Acts. However, in spite of the felt need for amendments in the
State Acts, the pace of reforms in cooperative legislations by the States is
not encouraging, and, therefore, a view has emerged in the cooperative
sector to incorporate certain provisions in the Constitution to provide
protection to cooperatives and to insulate them from avoidable political and
bureaucratic interference. This was also endorsed by the Conference of
State Cooperative Ministers held way back in December, 2004.
Accordingly, the Constitution (One Hundred and Sixth Amendment) Bill,
2006 was introduced in 14th Lok Sabha on 22nd May,2006. On reference
from the hon. Speaker, Lok Sabha, the Parliamentary Standing Committee
on Agriculture had also examined the Bill. However, the Bill could not be
considered by the House as it lapsed.
It was decided to re-introduce the Bill for amendment to the cooperatives.
The Constitution (One Hundred and Eleventh Amendment) Bill, 2009 as has
been introduced in the Lok Sabha on 30.11.2009. The hon. Speaker of Lok
Sabha referred the Bill to the Parliamentary Standing Committee on
Agriculture. The Standing Committee after holding discussions with
Secretary and other officers of the Department of Agriculture and
Cooperation, representatives of the State Governments, experts and other
stakeholders in the field of cooperatives, presented its Report to Lok Sabha
on 30th August, 2010. The suggestions made by the Standing Committee
have been examined in the Department in consultation with the Ministry of
Law and Justice. The Bill has been passed in Lok Sabha on 22nd December,
2011 with overwhelming support of the Members. I am very happy to inform
the hon. Members that the right to form cooperative societies is proposed to
be made a fundamental right under article 19(1)(c) of the Constitution, as
recommended by the Standing Committee on Agriculture. It is expected that
this would give boost to the cooperative movement and enthuse the people
to actively participate in the cooperative as a matter of right. This would
significantly increase the interest and responsiveness of the members and
strengthen the cooperative movement further. The object of the Constitution
(One Hundred and Eleventh Amendment) Bill, 2009 is to ensure that the
43
cooperative societies in the country function in a democratic, professional,
autonomous and economically sound manner. The proposed amendment in
the Constitution, inter-alia, seeks to empower the Parliament in respect of
multi-State cooperative societies and the State Legislature in case of other
cooperative societies to make appropriate law, laying down the following
matters, namely:
(i)
Right to form cooperative societies as a fundamental right by insertion
of the words 'cooperative societies' in sub-clause (c) of clause (1) of
Article 19.
(ii)
Insertion of Article 43B in Part IV of the Constitution as a Directive
Principle of State Policy for voluntary formation, autonomous
functioning, democratic control and professional management of
cooperative societies.
(iii) Provisions for incorporation, regulation and winding up of cooperative
based on the principles of democratic member-control, membereconomic participation and autonomous functioning;
(iv)
Specifying the maximum number of directors of a cooperative society
not exceeding twentyone members;
(v)
Providing for a fixed term of five years from the date of election in
respect of the elected members of the board and its office bearers;
(vi)
Providing for a maximum time limit of six months during which a
board of directors of a cooperative society could be superseded or kept
under suspension;
(vii) Providing for independent professional audit;
(viii) Providing for right of access to information to members of cooperative
societies;
(ix)
Empowering the Government to obtain periodic reports of activities
and accounts of cooperative societies;
(x)
Providing for the reservation of one seat for the Scheduled Castes or
the Scheduled Tribes and two seats for women on the Board of every
cooperative society, which have individuals as members from such
categories; and
(xi)
Providing for offences relating to cooperative societies and penalties in
respect of such offences. It is expected that these provisions will not
only ensure the autonomous and democratic functioning of
cooperatives, but enhance the public faith in these institutions and
also ensure the accountability of management to the members and
other stakeholders and also provide for deterrence for violation of the
provisions of the law.
The Bill seeks to achieve these objectives.
44
Annexure IV
Reply by the Honourable Minister for Agriculture to the Debate in
Rajya Sabha
The Hon'ble Minister, replying to the debate, said: I am grateful that the House
has supported this important Constitutional Amendment Bill which has been
passed by the Lok Sabha. The cooperative movement is very old in the country. By
means of the movement, we can empower the poor people of society. Many leaders
used to believe in the movement. In Gujarat, Shri Bankuthbhai Mehta imparted
guidance to the cooperative institutions. Many persons strengthened the movement
and made big contributions in the expansion of cooperative institutions. Crores of
people have participated in the movement as its members. About 18 or 20 per cent
agricultural credit is disbursed by them among the farmers. The cooperative
societies have made great contribution in the fields of fertilizers, milk, agroprocessing and PDS. The urban cooperative bank has shown the deposits of huge
money. The villagers have easy access to the cooperative banks. The urban
cooperative institutions have strengthened crores of families. We want to lead the
cooperative movement along the democratic path. Its management should be
better. It requires professionalism. Its economic transaction should be neat and
clean. There is the need to improve election process of the members. No election
has been conducted in various States for the last 5-6 years. There are the
occurrences of super cession and many office bearers are in administration for
many years. In the cooperative banks of Kerala, money has been deposited in the
names of great persons whose names are being misused by people. We will have to
check this kind of tendency. By the Amendment Bill, we will improve the process
and system of election to some extent. There should be an institution like election
commission. We formulate a policy in consultation with the important office
bearers of banks and other institutions. That is how the extant Bill has been
prepared. We can prepare some set-up of election for the bigger institutions; but, it
will be difficult to conduct election for the cooperative societies in the villages.
The State Assembly has been provided with the right to formulate legislation
thereof and the Government of India does not want to intervene into it. We can get
people belonging to SCs but those belonging to STs are not easily available
everywhere. Where can we bring them from? The Government of India helps the
institutions working in cooperative sectors. The Government have contributed a lot
for the revival of the entire sector as per the recommendations of Prof.
Vaidyanathan Committee. A number of cooperative institutions by means of this
waiver got revived. Today, it is by means of the Government of India that financial
support is being provided for the training of the people working in cooperative
sector. The Government of India takes the financial responsibility thereof through
cooperative institutions. The Government of India wants to have Cooperative Sugar
Mills in the country. 15 per cent of sugar is used to be provided to the people of
BPL category through Public Distribution System. This has been done for the
empowerment of the poor in cooperative sector. We shall talk to all in regard to the
sick institutions whether they can provide some help for revival from such a
situation. When such a problem appears, the Government also provide help.
Wherever farmers are required to be helped, the Government provides the same.
We cannot ignore our social responsibility.
45
Decentralisation happens to be the soul of cooperative sector. This movement has
in a way been set out to provide help to the lower class of society. It is with a view
to bring about reforms, as required, the Bill has been introduced before the House.
Your help is solicited for the rectification of the cooperative sector. We do not have
any problem in providing reservation but we cannot for forget that it is an
institution. Whether he belongs to the minority community or to OBCs or women,
we have to have a campaign to make them members thereof. One can become office
bearer thereof from out of members alone.
Conclusion
In constitutional amendment forming a cooperative is a fundamental right.
Emphasis is given to the principles of cooperation, restricting number of
board of directors, convening the general body meeting within six months,
and access to accounts by members. The uniqueness of the Constitutional
Amendment Act is that the board cannot be superseded or kept under
suspension for a period exceeding six months.
This will ensure effective
functioning of cooperatives and prevent the state governments from using
cooperatives as a tool for achieving their political ends.
Further the
members participation in attending meeting and utilising the minimum
number of services will ensure members loyalty towards the cooperatives.
Professionalisation of cooperatives through education and training has been
a subject of discussion for a pretty long time.
The Constitutional
Amendment
this
Act
has
made
it
mandatory
and
will
lead
to
professionalisation of cooperatives. The ILO resolution and political will of
major
political
parties
paved
way
for
bringing
the
Constitutional
Amendment Act. It is now the responsibility and obligation of the various
state governments to amend their laws in consonance with Constitutional
Amendment Act 2011.
46
Notes:
1) This is written based on the work of the Stirling Smith who is an
Associate at the Cooperative College, Manchester, England
2) It is against the spirit of the resolution as it warranted that the
member nation should place the draft report before the Parliament
and discuss thoroughly on the report and send reply to ILO. The
website ttp://www.ilo.org/public/english/standards/relm/ilc/ilc89/
pdf/rep-v-2.pdf clearly indicates that the Government of India did
consult none of the stakeholders while replying to the questionnaire.
Besides no conclusive evidence is available on the discussion in the
parliament on the ILO Resolution 193. It needs to be noted that many
countries in Asia Pacific region have not placed the same in the
Parliament.
3) It is to be noted that DMK was one of the coalition partner of UPA-II
Government when the Act was introduced.
References:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
A Note on the proposal of the Union Deptt. of Agriculture and Cooperation to
amend the Constitution for providing Constitutional protection to cooperatives,
Cooperative Development Foundation, Hyderabad.
arc.gov.in/9th report/ARC-9th Report -Ch 6-pdf P.140
Election Manifesto (1996) of various political parties on the subject of
Cooperatives, Cooperative Services Group, National Dairy Development Board,
Anand
http://www.ilo.org/dyn/normlex/en/f?p=1000:12100:0:::P12100_ILO_CODE:R
193
http://www.ilo.org/public/english/standards/relm/ilc/ilc89/pdf/rep-v-2.pdf
National Policy on Cooperatives, The Cooperator, October 2002 Pp 136-140.
The Constitution of (Ninety Seventh Amendment)Act, 2011, The Gazette of India,
12th January 2012, Pp.1-5
The Gazette of India, Ministry of Agriculture Notification Dt.13th February 2012.
www.loksabha.nic.in
www.rajyasabha.nic.in
www.prsindia.org/uploads/media/Constitution111/Constitution111SCR.pdf
164.100.47-132/LSS/New Debates/uncorrecteddebate-aspx
(The authors acknowledge the support provided by Shri M.K.Mishra, Mrs. S.P. Naikare,
and Mrs. V.V.Kulkarni in preparation of the article)
Abbreviations:
AGP
AIFB
AITC
AIADMK
BJD
BJP
BPF
BSP
CPI
-
Asom Gana Parishad
All India Forward Bloc
All India Trinamool Congress
All India Anna Dravida Munnetra Kazhagam
Biju Janata Dal
Bharatiya Janata Party
Bodoland Peoples Front
Bahujan Samaj Party
Communist Party of India
47
CPI (M)
DMK
INC
JD (U)
JMM
NCP
SS
SP
RSP
RJD
-
Communist Party of India (Marxist)
Dravida Munnetra Kazhagam
Indian Natinal Congress
Janata Dal (United)
Jharkhand Mukti Morcha
Nationalist Congress Party
Shiv Sena
Samajwadi Party
Revolutionary Socialist Party
Rashtriya Janata Dal
48
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