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In News
- The Central Government recently introduced the Multi-State Cooperative Societies (Amendment) Bill, 2022 in Lok Sabha.
More about the news
- About:
- The Bill proposes to amend the Multi-State Co-operative Societies Act, 2002 in light of the 97th Constitutional Amendment Act of 2011 which inserted Part IXB in the Constitution.
Highlights of the Bill
- Cooperative election authority:
- The Bill also seeks to establish a “cooperative election authority” to bring “electoral reforms” in the cooperative sector.
- As per the proposed amendment, the authority will consist of a chairperson, a vice-chairperson and a maximum of three members to be appointed by the Centre.
- Establishment of a Fund & concurrent audit:
- The Bill seeks to insert a new Section related to the “establishment of the Cooperative Rehabilitation, Reconstruction and Development Fund” for revival of “sick multi-state cooperative societies”.
- It also proposes to insert Section relating to “concurrent audit” for such multi-state societies with an annual turnover or deposit of more than the amount as determined by the Centre.
- Complaints redress:
- The government has proposed to insert a Chapter relating to “complaints redress”.
- This proposes to appoint one or more “cooperative ombudsman” with a territorial jurisdiction to inquire into members’ complaints.
- Role of the ombudsman:
- The ombudsman will complete the process of inquiry and adjudicate within a period of three months from the date of receiving the complaint and may issue necessary directions to the society during the course of inquiry.
- Monetary penalties & imprisonment:
- The government has also proposed to amend the existing Act to increase monetary penalties on multi-state co-op societies for violating provisions of the law to a maximum Rs 1 lakh.
- The imprisonment term has also been proposed from a maximum six months at present to up to one year in the proposed amendments.
- Cooperative information officer:
- The Centre has also proposed to make provisions for the “appointment of cooperative information officer” to provide information on affairs and management of the multi-state co-op society concerned to members of such society.
- Contentious clause of the Bill:
- Merger of cooperative society:
- The Bill proposes merger of “any cooperative society” into an existing multi-state cooperative society.
- Original statute:
- As per the present law, enacted 20 years ago, only multi-state cooperative societies can amalgamate themselves and form a new multi-state cooperative society.
- Amendment:
- But now, “any cooperative society may, by a resolution passed by majority of not less than two-thirds of the members present and voting at a general meeting of such society, decide to merge into an existing multi-state co-operative society: Provided that such resolution shall be subject to provisions of the respective State Cooperative Societies Act for the time being in force, under which such cooperative society is registered.
- Merger of cooperative society:
The objective of the introduction of the Bill:
- The bill is introduced with an objective to enhance transparency and accountability and improve the ease of doing business by reducing the period of registration.
Criticisms:
- No provision in the Constitution:
- According to the critics, the Constitution distinguishes between Cooperative Societies of State and Multi-State Cooperative Societies which are governed by the Union of India.
- No provision of the Constitution makes way for merging a cooperative society which is incorporated under State law with a Multi-State Cooperative Society.
- Centre’s encroachment:
- Through the introduction of the Clause concerning the merger through the Bill, the Centre is indirectly encroaching on the rights of State Co-operative Societies according to critics.
- It is being argued that such actions “impinges” on the rights of the States and is against India’s federal structure.
- Beyond legislative competence:
- It is also being claimed that this is beyond the legislative competence of the Union as State cooperative societies are within the exclusive jurisdiction of States.
Conclusion
- Developments over the years also necessitated changes in the existing Act so as to strengthen the cooperative movement in multi-state cooperative societies.
- Therefore, the government proposed to amend the Act.”
More about the Cooperative Societies
Ministry of Cooperation
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