By Vidyadhar Anaskar, Chairman Administrative Board of MSC Bank
The government has given significant recognition to the cooperative sector by incorporating the new National Cooperative Policy in the budget. After India’s independence, the cooperative sector emerged as a balanced alternative to the private and public sectors, supported by the government.
The Gorwala Committee recommended a dedicated chapter on cooperation in national planning, emphasizing government participation in cooperatives. However, the central government had largely neglected this sector, which constitutionally falls under state jurisdiction.
The establishment of the Ministry of Cooperation, led by Amit Shah, marked a shift, with the central government taking active steps to bolster the cooperative movement. This year’s budget includes a comprehensive new cooperative policy, highlighting the government’s commitment to this sector.
In 2023, the Union Ministry of Cooperatives initiated plans for a new National Cooperative Policy, forming a committee under former Union Minister Suresh Prabhu. This committee has drafted a policy now awaiting approval by the Central Government.
The last cooperative policy, released during the Vajpayee government in 2002, did not receive such prominence in the budget. This new policy’s inclusion signifies a strong government endorsement of the cooperative sector.
The budget’s substantial allocation towards strengthening the rural economy includes support for the cooperative sector, which plays a crucial role in agriculture. With approximately 98,000 cooperative societies operating across 91% of the country, these bodies are vital to the rural economy and farmers’ livelihoods.
About 300 million people, including 130 million farmers, are connected to the cooperative sector. The budget provisions aim to enhance cooperative societies through research, production, and marketing, aligning with the Union Ministry of Cooperation’s motto, “prosperity through cooperation.”
The National Cooperative Policy outlines a strategy for the sector’s development, ensuring equal business opportunities, empowerment of financial institutions, modernization, and training. With comprehensive measures and necessary funding from the Central Government, the policy aims to significantly boost the cooperative movement.
Additionally, the government has begun computerizing cooperative societies, allocating Rs. 437.17 crores to states. Despite these advances, there is some disappointment over the continued lack of income tax exemptions for the cooperative banking sector.