Since the Ministry of Cooperation has constituted a Panel led by Suresh Prabhu consisting of several members including NCUI President Dileep Sanghani, Sahakar Bharati has come out with its proposed national policy on cooperatives. Satish Marathe and Jyotindra Mehta are already there in the newly formed Panel.
Talking to the Indian Cooperative, National General Secretary of Sahakar Bharati, Uday Joshi said that there is no harm now in sharing the progress achieved by us in this direction on public platforms. Luckily, many of the Sahakar Bharati officials are also there in the Panel, Joshi added.
Sahakar Bharati had organised a Brainstorming Meeting on 8th April, 2022 at Haryana Bhawan, New Delhi to discuss and provide inputs for the proposed National Policy on CoOps. The Meeting was attended by a cross section of Stakeholders of CoOp Sectors represented by their senior Leaders.
Later, Sahakar Bharati came up with suggestions and announced the new co-op policy based on the inputs of stakeholders.
The gist of inputs are as given below –
A. Growth and Development
1. Registration Process should be Online and the same should be completed in a prescribed time frame.
a. Objections if any, should be communicated Online by the CoOp Dept within 15 working days.
b. Promoters should also submit Clarifications/ Responses within 15 working days to the CoOp Dept.
c. The entire process of Registration should be completed in a maximum period of 2 months.
d. If Registration is rejected specific grounds should be furnished by the CoOp Dept.
e. Appeal against Rejection should be heard by a Tribunal which is independent of CoOp Dept.
f. Every communication for change in Bye Laws should also be disposed of in a time bound manner as stated above.
2. Policy and the Act, including Rules thereunder, should be framed which are consistent with CoOp Principles, CoOp Identity Statement, 97th Constitution Amendment and Directive Principles of State Policy.
3. Amendments in Sections and Rules of the Multi State CoOperative Act are consistent with the 97th Constitution Amendment and Directive Principles of State Policy.
4. NCDC the only Apex financing Organisation for CoOperatives should be financially strengthened by infusion of Capital by Govt and Semi Govt Organisations, CoOps, etc or it may be converted into a Bank so that it can extend financial assistance at competitive rates.
5. Three Tier CoOp Credit structure needs to be maintained and strengthened to ensure timely and focussed delivery of Credit to boost Agri Operations, Agro Processing, Animal Husbandry, Storage and Warehousing facilities, Self-Employment, etc.
6. With the rapid spread of Optical Fibre Network across Villages and Hamlets, operations of all CoOp Financial Institutions should be Computerised and all these Institutions should be linked to Payment Gateway/s to achieve Financial Inclusion and also to move towards Less Cash Economy.
B. New Initiatives
1. To mobilise untapped Financial Resources, particularly in Rural and Semi-Urban areas, an independent Deposit Insurance Corporation be formed and promoted for all CoOp Financial Institutions eg. PACs, Primary Milk Socs, Multi-Purpose CoOps engaged in Thrift and Credit, all types of Credit CoOps. This will lead to reduced dependence of such CoOps on higher Financing Agencies resulting in reduced interest rates for borrowers. This would also facilitate emergence of a robust decentralised Credit Delivery System for the under-privileged sections of the Society.
2. In the last few decades, in many Countries CoOps have spread in several new areas eg. Insurance, Health Care, Mutual Funds, Education/Skilling, Hospitality, Tourism, Media, Water & Electricity Distribution, Rural Telephony, Entertainment, etc. These areas have huge potential for Innovation, providing Services at affordable rates to the Citizens. This will also promote Employment/Self-Employment. Therefore, there is a need to venture into these newer areas for which enabling Policy framework and ecosystem needs to be created.
3. CoOps are a distinct form of Economic Enterprise. Hence, CoOp Movement, its values, various Sectors, etc should be made a part of study at School & University levels where students are being acquainted about different forms of ownership models viz Proprietorship, Partnership, LLP, Company.
4. Lakhs of CoOps are functioning satisfactorily. However, performance of some CoOps have tarnished the image of the CoOp Sector. Hence, there is a need to create awareness about the positive aspects of the CoOps and correct public perception.
5. Emphasis should be on Member Education to improve the working of the CoOps.
6. Being Economic Enterprises, CoOps need Capital & Long Term Funds for Growth, Modernisation, Diversification, Technological Upgradation, etc. Hence, CoOps need to be empowered to raise funds by issue of Bonds & Equity Shares through Public Issue & Private Placement basis. CoOps are empowered to access Capital Markets as is in vogue in several developed Countries.
7. To expedite and simplify Dispute Resolution, besides Arbitration Act, Mediation Bill which is under consideration of the Parliament, should also be made applicable to CoOps.
8. Lok Adalats should be the preferred mode for settlement of Financial and Non-Financial disputes. Associations and Federation of CoOps are given important roles in this regard.
C. Ease of Doing Business
1. Recovery mechanism should be revamped completely for quick and fast recovery. It needs to be modelled as per the IBC Code.
2. As far as possible, all CoOps are managed only by Elected Boards. In exceptional circumstances, an Administrator/Administrative Board may be appointed for a maximum period of three/six months as per the provision in 97th Constitution Amendment.
3. A robust Election Body should conduct elections of all large CoOps and it should work under the supervision, guidance and control of the Election Commission of India. All disputes pertaining to CoOp Elections should be handled as they are handled by the Election Commission of India.
4. It is a well-accepted fact that CoOperatives perform on the Principle of Mutuality and therefore Economic Transactions between Members and their CoOp Institutions should not be taxed. Therefore, Taxation Policy for CoOps should be designed keeping in view the Concept of Mutuality, this would be consistent with several cases decided by the High Courts and Supreme Court.
5. This is the age of Self-Regulation. Each CoOp Sector, should give itself a Charter of Governance which inter alia will prescribe Dos & Donts, Disclosures, adoption of Best Ntl & Intl Practices, etc. Statutory Auditors of CoOps should be duty bound to directly write to Registrars wherever they observe Non Adherence/s.
D. Exit Policy
1. CoOps which are Dysfunctional, Financially Non-Viable, etc need to be de-registered and hence Exit Policy for such CoOperatives should be formulated. Such CoOps are also used negatively to manipulate Elections of Higher level Organizations/ Federations/ Associations, Banks, etc. Hence, to cleanse the CoOp Sector, an Exit Policy is the pressing need of the hour.
2. Similarly, CoOps should be empowered to undertake Voluntary Amalgamation/Mergers
3. There are at least a few lakhs of CoOps which are defunct, dysfunctional, non-viable, etc. which need to be liquidated on a top priority basis and new ones be registered. This would stop the falling share of CoOps in various Sectors of the Economy.