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 Explained: Multi-State Co-operative Societies (Amendment) Bill 2022

Dec 24, 2022

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Today we will discuss Multi-State Co-operative Societies (Amendment) Bill 2022 in our daily edition of Current Affairs. Read further to upgrade your UPSC CSE knowledge and also understand the topic’s relevance to the UPSC syllabus.

For Prelims: Indian Polity and Governance

co operative societies act, multi state cooperative society act 2002, multi state cooperative society act, cooperative society act 1960, co op society act, corporate society act

For Mains: GS Paper II- Development Processes

About the Co-operative Societies, About the Existing Law, About the causes for amending the multi state cooperative society act 2002, About the Multi-State Co-operative Societies (Amendment) Bill 2022

Context

Recently, the Lok Sabha referred the Multi-State Co-operative Societies (Amendment) Bill 2022 to a joint committee of Parliament.

Probable Question

Critically analyze the proposed amendments to the Co-operative Societies Act. (150 words, 10 marks)

About the Co-operative Societies

  • The subject ‘cooperative societies’ is mentioned in Entry 32 of the State List under the Seventh Schedule of the Constitution. 
  • Entry 43 of the Central List under the Seventh Schedule of the Constitution also makes clear that cooperative societies do not come in the Centre’s domain.
  • It is an association of individuals with common needs, who voluntarily join hands to achieve their economic interests.
  • Such societies aim to help poorer or underprivileged sections of society and they follow the principle of self-help and mutual help.
  • At present, India has more than 1,500 multi-State cooperative societies.

About the Multi-State Co-operative Societies Act, 2002

  • The multi-state cooperative society act 2002 has gone through many changes in the field of cooperatives, since its formation.
  • At that time, Cooperation was a department under the Ministry of Agriculture. 
  • On July 6, 2021, the government carved out a separate Cooperation Ministry and the current Home Minister Amit Shah became the first Cooperation Minister of the country. 

About the causes for Amending the Multi-State Cooperative Society Act 2002

  • Several additions: Part IXB was inserted in the Constitution, vide the Constitution (Ninety-seventh Amendment) Act, 2011. In view of the insertion of the said Part, it has become imperative to amend the Act. 
  • Strengthening the act: Further, developments over the years also necessitated required changes in the Act so as to strengthen the co-operative movement in the multi-State co-operative societies.
  • Transparency: A Bill to amend the Multi-State Cooperative Societies Act, aimed at bringing in transparency in the sector
  • Betterment: The Bill seeks to strengthen governance, reform the electoral process, improve the monitoring mechanism, and ensure ease of doing business in multi-State cooperative societies.
  • Improved composition of boards: It also aims to improve the composition of boards and ensure financial discipline, besides enabling the raising of funds in the multi-State cooperative societies.
  • More democratic: In order to make the governance of multi-State cooperative societies more democratic, transparent, and accountable.
  • Promote equality: To promote equity and facilitate inclusiveness, provisions relating to the representation of women and Scheduled Caste/Scheduled Tribe members on the boards of multi-State cooperative societies have been included.
Note:

About the Constitution (Ninety Seventh Amendment) Act, 2011:

The 97th constitutional amendment, Part IXB (The Co-Operative Societies) was inserted in the Constitution. 

The right to form cooperative societies was included as the Right to Freedom under article 19 (1), Part 3 of the Constitution.

In addition to this, Article 43-B (Promotion of Cooperation societies) was also inserted as one of the Directive Principles of State Policy under Part 4 of the Constitution of India.

About the Multi-State Co-operative Societies (Amendment) Bill 2022

  • The New rules for merger: 

The Multi-State Co-operative Societies (Amendment) Bill 2022, provides for the merger of “any co-operative society” into an existing multi-state co-operative society. 

The cooperative society by at least 2/3rd majority of the members presents and voting at a general meeting of such society can pass the resolution. 

  • Co-operative Election Authority: 

The Bill seeks to establish a “Co-operative Election Authority”, with a view to bringing “electoral reforms” in the co-operative sector. 

The authority shall consist of a Chairperson, a Vice-Chairperson, and members not exceeding three to be appointed by the Centre.

The Chairperson, Vice-Chairperson, or Member of the Authority will hold office for 3 years or until they attain the age of 65 years, whichever is earlier.

They shall be eligible for re-appointment, according to the proposed Section 45(4).

  • Stricter punishments: Clause 37 of the Bill seeks to amend section 104 of the Act to increase the amount of penalty for certain offenses.
  • Complaint redressal: The government has proposed to insert a new Chapter IXA relating to “redressal of complaints”. 
  • Co-operative Ombudsman: To appoint one or more of them, a new section 85 has proposed a territorial jurisdiction for inquiring into the complaints made by the members. 
  • Fund for the revival of sick co-operative societies: For this the bill seeks to insert a new section 63A in the principal Act, relating to the “establishment of the Co-operative Rehabilitation, Reconstruction and Development Fund” for the revival of “sick multi-State co-operative societies”. 
  • Concurrent audit: It is by inserting a new section 70A relating to “concurrent audit” for multi-state co-operative societies having an annual turnover or deposit of more than the determined amount.
  • Cooperative Information Officer: It is proposed to make provisions for the “appointment of a Co-operative Information Officer” to provide information relating to affairs and management of the multi-state co-operative society to the members of such society.

Criticism of the Multi-State Co-operative Societies (Amendment) Bill 2022

  • Encroachment: There is a clear indication that the Central government has been encroaching upon the territory of State governments that is why protests are cropping up across the nation.
  • Impact autonomy: This (Bill) may lead to the concentration of power of the Central government, which may impact the autonomy and functioning of the multi-State cooperative societies and create the potential for misuse.
  • Beyond the definition of Cooperative societies: The Bill went against the spirit of the definition of cooperative societies as enshrined in the Constitution.
  • Affects state rights: The legislation sought to “take away” the rights of State governments and was against the federal structure of the country, he alleged.
  • Beyond the legislative competence: He claimed five clauses of the Bill were beyond the legislative competence of the House. 

News Source: The Indian Express, The Hindu

https://indianexpress.com/article/explained/amendments-to-the-co-operative-societies-act-8337593/

https://www.thehindu.com/news/national/bill-to-amend-the-multi-state-cooperative-societies-act-introduced-in-lok-sabha/article66235306.ece

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