Kurukshetra Magazine January 2023 - 3 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

 Page 1


Kurukshetra       January  2023 34
 Sandip Das
Multi-prolonged strategies to boost the cooperatives sector in the country has been initiated through a series of measures 
announced by Ministry of Cooperation so that the cooperatives play a critical role in boosting Indian economy and they are 
treated at par with the other economic forms. Skill development of manpower , bringing in transparency and competitiveness 
in operations of cooperatives and expanding economic horizons of these entities are the areas of focus for the government. 
Modernisation and Competitiveness in Cooperatives
ndia has a rich cooperative heritage and 
a robust cooperative sector. Currently, 
there are two types of cooperative 
structures in the country -- State 
Cooperative Societies and Multi- State Cooperative 
Societies. The cooperative societies functioning 
in one state only are governed by the laws of the 
respective State Government and the cooperative 
societies functioning in more than one state are 
governed by the Central law -- the Multi-State 
Cooperative Societies Act, 2002 (Act 39 of 2002). 
The cooperatives have been the soul of Indian 
culture and the country has given the idea or 
concept of cooperatives to 
the world. Out of 30 lakh 
cooperative societies in the 
world, around 8.55 lakh are 
in India and about 13 crore 
people are directly associated 
with them. Around 91 percent 
villages in India have some 
form of cooperatives working 
in them. Amongst the 300 
largest cooperative societies 
globally, three societies 
-- Gujarat Cooperative 
Milk Marketing Federation 
popularly referred as Amul, 
Indian Farmers Fertiliser 
Cooperative (IFFCO) and 
Krishak Bharati Cooperative 
Limited (KRIBHCO) are in 
India.
To give new dimensions 
and strengthen the cooperative 
sector in the country through 
policy and other interventions, 
the Government set up a new 
I
Ministry of Cooperation on July 6
th
, 2021 to provide a 
separate administrative, legal and policy framework 
for strengthening the cooperative movement in 
the country. The focus of the Ministry has been 
to provide renewed impetus to the growth of the 
cooperative sector. As per the statistics of National 
Cooperative Union of India (NCUI) 2018, there are 
8.55 lakh cooperative units in the country. Some 
of the issues affecting accelerated and equitable 
growth of cooperatives, inter alia, are lack of effective 
professional management in cooperative units, and 
low level of technology adoption.
The author is a journalist. Views expressed are personal. Email: writerfoodsd@gmail.com
Page 2


Kurukshetra       January  2023 34
 Sandip Das
Multi-prolonged strategies to boost the cooperatives sector in the country has been initiated through a series of measures 
announced by Ministry of Cooperation so that the cooperatives play a critical role in boosting Indian economy and they are 
treated at par with the other economic forms. Skill development of manpower , bringing in transparency and competitiveness 
in operations of cooperatives and expanding economic horizons of these entities are the areas of focus for the government. 
Modernisation and Competitiveness in Cooperatives
ndia has a rich cooperative heritage and 
a robust cooperative sector. Currently, 
there are two types of cooperative 
structures in the country -- State 
Cooperative Societies and Multi- State Cooperative 
Societies. The cooperative societies functioning 
in one state only are governed by the laws of the 
respective State Government and the cooperative 
societies functioning in more than one state are 
governed by the Central law -- the Multi-State 
Cooperative Societies Act, 2002 (Act 39 of 2002). 
The cooperatives have been the soul of Indian 
culture and the country has given the idea or 
concept of cooperatives to 
the world. Out of 30 lakh 
cooperative societies in the 
world, around 8.55 lakh are 
in India and about 13 crore 
people are directly associated 
with them. Around 91 percent 
villages in India have some 
form of cooperatives working 
in them. Amongst the 300 
largest cooperative societies 
globally, three societies 
-- Gujarat Cooperative 
Milk Marketing Federation 
popularly referred as Amul, 
Indian Farmers Fertiliser 
Cooperative (IFFCO) and 
Krishak Bharati Cooperative 
Limited (KRIBHCO) are in 
India.
To give new dimensions 
and strengthen the cooperative 
sector in the country through 
policy and other interventions, 
the Government set up a new 
I
Ministry of Cooperation on July 6
th
, 2021 to provide a 
separate administrative, legal and policy framework 
for strengthening the cooperative movement in 
the country. The focus of the Ministry has been 
to provide renewed impetus to the growth of the 
cooperative sector. As per the statistics of National 
Cooperative Union of India (NCUI) 2018, there are 
8.55 lakh cooperative units in the country. Some 
of the issues affecting accelerated and equitable 
growth of cooperatives, inter alia, are lack of effective 
professional management in cooperative units, and 
low level of technology adoption.
The author is a journalist. Views expressed are personal. Email: writerfoodsd@gmail.com
Kurukshetra       January  2023 35
The New National Cooperative Policy and 
schemes are being drafted with the aim to deepen 
co-operatives as a true people-based movement 
reaching up to the grassroots and develop a 
cooperative based economy model including 
giving focus on ‘Make in India’. This will address all 
developmental issues of cooperatives. Inputs or 
suggestions of the stakeholders including Central 
Government Ministries have been sought. To make 
cooperatives more transparent and efficient, the 
Ministry has started stakeholder consultations on 
relevant interventions viz. creation of a National 
database of Cooperatives, digitalisation of about 
63000 active Primary Agriculture Credit Societies 
(PACS). Cooperatives have contributed a lot in all 
areas related to agriculture finance distribution and 
agriculture. There are 1.5 lakh dairy and housing 
societies, 46,000 honey cooperative societies, 
26,000 consumer societies, many fisheries 
cooperatives and many cooperative sugar mills in 
the country. 51 percent villages and 94 percent 
farmers are associated with cooperatives in some 
form or the other. The contribution of cooperatives 
in the country's economy is significant. The 
cooperative sector gives 20 percent of the total 
agricultural credit of the country, 35 percent of the 
fertiliser distribution is done by the cooperative 
sector, 25 percent of fertiliser production, 31 
percent of sugar production, more than 10 percent 
of milk production is done through cooperatives, 
more than 13 percent procurement of wheat from 
the farmers by government agencies and more than 
20 percent of the procurement of paddy is done by 
the cooperative sector. More than 21 percent of 
the fishermen's business is done by cooperative 
societies. 
While cooperatives have made a significant 
contribution to India’s economy in the last several 
decades, the government has stressed that 
cooperatives must be a vital contribution in realising 
the Prime Minister, Shri Narendra Modi’s dream of 
making India a $ 5 trillion economy.
New legislation for Ensuring Transparency and 
Accountability of Cooperatives
To bring accountability and governance 
structure of cooperatives, the government has 
introduced the Multi-State Co-operative Societies 
(MSCSs) (Amendment) Bill, 2022, in the Lok Sabha 
on December 7, 2022. The act was first passed in 
Parliament in 2002. The new bill provides that the 
Centre government will establish the Cooperatives 
Election Authority to conduct election, supervise, 
direct and control the preparation of electoral rolls, 
and perform other prescribed functions. The bill also 
has provision for the amalgamation and division of 
MSCSs. The merger of a state cooperative with an 
existing MSCSs is also dealt with in the bill. The MSCS 
(amendment) bill has been referred to a 21 member 
panel comprising of Lok Sabha and Rajya Sabha 
members.
For creating a professional management 
structure, the bill has provisions for bringing in 
directors with experience in the field of banking, 
management and finance. The Union Cooperation 
Minister Shri Amit Shah on several occasions had 
stressed the role of cooperatives in dairy, fertiliser, 
sugar, fisheries, agri-credit sectors and called for 
diversification of these bodies to other sectors. There 
are more than 100 multi-state cooperative diaries 
and 70 multi-state cooperative banks.  
There are 1500 odd MSCSs in 30 states and 
union territories engaged in various economic 
activities including in the dairy, fertiliser and several 
other sectors. Major chunk of these bodies are in 
Maharashtra (655), Uttar Pradesh (154), Tamil Nadu 
(123), Gujarat (42). The multi-state cooperative 
societies act, 2002 was enacted with a view to 
facilitate democratic and autonomous working of 
these cooperatives.
Professionalising Cooperatives and Boost 
Economic Growth
The Union Minister for Home and Cooperation 
Shri Amit Shah recently said while mass production 
is necessary for the development of the country’s 
economy, ‘Production by Masses’ is also very 
important and it would come from cooperatives. 
“For this, our cooperative policy will take the country 
far ahead. We have set the focus of this policy – free 
registration, computerisation, democratic elections, 
ensuring active membership, professionalism in 
governance and leadership, professionalism and 
transparency, and accountability,” he had said. 
The government at present wants to incorporate 
effective human resource policy, which should have 
transparency in recruitment, empowerment of 
Page 3


Kurukshetra       January  2023 34
 Sandip Das
Multi-prolonged strategies to boost the cooperatives sector in the country has been initiated through a series of measures 
announced by Ministry of Cooperation so that the cooperatives play a critical role in boosting Indian economy and they are 
treated at par with the other economic forms. Skill development of manpower , bringing in transparency and competitiveness 
in operations of cooperatives and expanding economic horizons of these entities are the areas of focus for the government. 
Modernisation and Competitiveness in Cooperatives
ndia has a rich cooperative heritage and 
a robust cooperative sector. Currently, 
there are two types of cooperative 
structures in the country -- State 
Cooperative Societies and Multi- State Cooperative 
Societies. The cooperative societies functioning 
in one state only are governed by the laws of the 
respective State Government and the cooperative 
societies functioning in more than one state are 
governed by the Central law -- the Multi-State 
Cooperative Societies Act, 2002 (Act 39 of 2002). 
The cooperatives have been the soul of Indian 
culture and the country has given the idea or 
concept of cooperatives to 
the world. Out of 30 lakh 
cooperative societies in the 
world, around 8.55 lakh are 
in India and about 13 crore 
people are directly associated 
with them. Around 91 percent 
villages in India have some 
form of cooperatives working 
in them. Amongst the 300 
largest cooperative societies 
globally, three societies 
-- Gujarat Cooperative 
Milk Marketing Federation 
popularly referred as Amul, 
Indian Farmers Fertiliser 
Cooperative (IFFCO) and 
Krishak Bharati Cooperative 
Limited (KRIBHCO) are in 
India.
To give new dimensions 
and strengthen the cooperative 
sector in the country through 
policy and other interventions, 
the Government set up a new 
I
Ministry of Cooperation on July 6
th
, 2021 to provide a 
separate administrative, legal and policy framework 
for strengthening the cooperative movement in 
the country. The focus of the Ministry has been 
to provide renewed impetus to the growth of the 
cooperative sector. As per the statistics of National 
Cooperative Union of India (NCUI) 2018, there are 
8.55 lakh cooperative units in the country. Some 
of the issues affecting accelerated and equitable 
growth of cooperatives, inter alia, are lack of effective 
professional management in cooperative units, and 
low level of technology adoption.
The author is a journalist. Views expressed are personal. Email: writerfoodsd@gmail.com
Kurukshetra       January  2023 35
The New National Cooperative Policy and 
schemes are being drafted with the aim to deepen 
co-operatives as a true people-based movement 
reaching up to the grassroots and develop a 
cooperative based economy model including 
giving focus on ‘Make in India’. This will address all 
developmental issues of cooperatives. Inputs or 
suggestions of the stakeholders including Central 
Government Ministries have been sought. To make 
cooperatives more transparent and efficient, the 
Ministry has started stakeholder consultations on 
relevant interventions viz. creation of a National 
database of Cooperatives, digitalisation of about 
63000 active Primary Agriculture Credit Societies 
(PACS). Cooperatives have contributed a lot in all 
areas related to agriculture finance distribution and 
agriculture. There are 1.5 lakh dairy and housing 
societies, 46,000 honey cooperative societies, 
26,000 consumer societies, many fisheries 
cooperatives and many cooperative sugar mills in 
the country. 51 percent villages and 94 percent 
farmers are associated with cooperatives in some 
form or the other. The contribution of cooperatives 
in the country's economy is significant. The 
cooperative sector gives 20 percent of the total 
agricultural credit of the country, 35 percent of the 
fertiliser distribution is done by the cooperative 
sector, 25 percent of fertiliser production, 31 
percent of sugar production, more than 10 percent 
of milk production is done through cooperatives, 
more than 13 percent procurement of wheat from 
the farmers by government agencies and more than 
20 percent of the procurement of paddy is done by 
the cooperative sector. More than 21 percent of 
the fishermen's business is done by cooperative 
societies. 
While cooperatives have made a significant 
contribution to India’s economy in the last several 
decades, the government has stressed that 
cooperatives must be a vital contribution in realising 
the Prime Minister, Shri Narendra Modi’s dream of 
making India a $ 5 trillion economy.
New legislation for Ensuring Transparency and 
Accountability of Cooperatives
To bring accountability and governance 
structure of cooperatives, the government has 
introduced the Multi-State Co-operative Societies 
(MSCSs) (Amendment) Bill, 2022, in the Lok Sabha 
on December 7, 2022. The act was first passed in 
Parliament in 2002. The new bill provides that the 
Centre government will establish the Cooperatives 
Election Authority to conduct election, supervise, 
direct and control the preparation of electoral rolls, 
and perform other prescribed functions. The bill also 
has provision for the amalgamation and division of 
MSCSs. The merger of a state cooperative with an 
existing MSCSs is also dealt with in the bill. The MSCS 
(amendment) bill has been referred to a 21 member 
panel comprising of Lok Sabha and Rajya Sabha 
members.
For creating a professional management 
structure, the bill has provisions for bringing in 
directors with experience in the field of banking, 
management and finance. The Union Cooperation 
Minister Shri Amit Shah on several occasions had 
stressed the role of cooperatives in dairy, fertiliser, 
sugar, fisheries, agri-credit sectors and called for 
diversification of these bodies to other sectors. There 
are more than 100 multi-state cooperative diaries 
and 70 multi-state cooperative banks.  
There are 1500 odd MSCSs in 30 states and 
union territories engaged in various economic 
activities including in the dairy, fertiliser and several 
other sectors. Major chunk of these bodies are in 
Maharashtra (655), Uttar Pradesh (154), Tamil Nadu 
(123), Gujarat (42). The multi-state cooperative 
societies act, 2002 was enacted with a view to 
facilitate democratic and autonomous working of 
these cooperatives.
Professionalising Cooperatives and Boost 
Economic Growth
The Union Minister for Home and Cooperation 
Shri Amit Shah recently said while mass production 
is necessary for the development of the country’s 
economy, ‘Production by Masses’ is also very 
important and it would come from cooperatives. 
“For this, our cooperative policy will take the country 
far ahead. We have set the focus of this policy – free 
registration, computerisation, democratic elections, 
ensuring active membership, professionalism in 
governance and leadership, professionalism and 
transparency, and accountability,” he had said. 
The government at present wants to incorporate 
effective human resource policy, which should have 
transparency in recruitment, empowerment of 
Kurukshetra       January  2023 36
infrastructure, use of technology and policy-rules and 
guidelines for this. The Union Cooperation Minister 
also said, PACS will have to be made multipurpose, 
which is the need of the day. Many new dimensions 
that we want to add through these model bylaws also 
have the provision of transparency, accountability 
and mobility. “By doing this we will be successful 
in strengthening the core unit of the cooperative 
sector and give a new and long and strong life to the 
cooperative sector,” Shri Shah had stressed.
At present about 65,000 PACS are being created  
and the government is aiming to set up 3,00,000 
new PACS in next 5 years. Thus, we have set a target 
of registering around 2,25,000 PACS. These PACS 
will be in the sectors such as dairy, FPOs, water and 
gas distribution, bio-gas generation and storage.
The governments’ plan is to ensure that panchayats 
which do not have PACS should establish one.
If PACS are to be made multi-purpose, there 
is a need to look at the accounting system. The 
government has decided to computerise PACS for 
smooth seamless transactions. “We will computerise 
65,000 PACS in the first phase and a good software 
is also being developed by the Cooperation Ministry 
of the Government of India in which all works will be 
included,” Shri Shah had said.
After this, PACS, District Cooperative Banks, 
State Cooperative Banks and NABARD, will run on the 
common software and the same type of accounting 
system, which will also facilitate online audit. Experts 
say that many of the problems will be solved by 
accepting the bylaws of PACS, computerisation of 
PACS and adoption of new software. This software 
will be available in all languages so that every State 
will be able to conduct business for their PACS in 
their native language.
The Union Cooperation Minister had earlier 
noted that by liquidating defunct PACS as soon as 
possible, new PACS should be formed because as 
long as the old PACS are in existence, new PACS will 
not be able to be formed. Till now, PACS are engaged 
only in disbursing short term finance, but now PACS 
should also be able to disburse the medium and long-
term finance as well. A proposal is being mooted on 
this to authorise PACS to expand their role in lending 
activities. By proactively cooperating with the State 
Marketing Federation, the National Agricultural 
Cooperative Marketing Federation of India (NAFED) 
will actively integrate the PACS with marketing and 
the entire marketing profit will eventually reach 
the PACS through the NAFED State and District 
Federation. For so many changes, trained manpower, 
youth who know cooperative finance, youth who 
know computers, youth who imbibe the concept of 
cooperatives would be needed.
Skill Development
For providing trained manpower to the 
cooperative, the government has also initiated a 
process to form a cooperative university. The plan 
is to also open one affiliated college in every State 
so that different types of cooperatives will be able 
to train manpower. To boost the export potential 
of cooperatives where nearly 300 million people 
are associated with it, the Ministry of Cooperation 
is working towards creation of a dedicated exports 
house. This database of cooperatives will be provided 
access to the District and its Union and District 
Cooperative Banks.
The government is also proposing to form 
a multi-state cooperative - Seed Production 
Cooperative by merging four or five big cooperatives 
at the national level to enhance the quality of seeds 
and preserve and promote our old seeds. The 
government has been giving thrust on expanding 
natural farming for reducing use of chemical 
fertiliser. Large cooperatives such Amul, IFFCO, 
NAFED, NCDC and KRIBHCO are going to form a 
multistate export house which will work to export 
Khadi products, handicrafts and agriculture products 
to the worldwide market. To export the product of 
the smallest cooperative unit, it will become a multi-
state cooperative export house and this itself will 
take it further.
The National Cooperative Development 
Corporation (NCDC), a statutory organisation under 
the Ministry of Cooperation, provides financial 
assistance to the cooperative sector and undertakes 
various activities such as strengthening share capital 
base of primary and district cooperative marketing 
societies, setting up of processing centres, storage 
facilities, establishing and modernising cold chain, 
creation of cooperative banking units, agricultural 
services, Integrated Cooperative Development 
Projects, assistance for computerisation of 
Page 4


Kurukshetra       January  2023 34
 Sandip Das
Multi-prolonged strategies to boost the cooperatives sector in the country has been initiated through a series of measures 
announced by Ministry of Cooperation so that the cooperatives play a critical role in boosting Indian economy and they are 
treated at par with the other economic forms. Skill development of manpower , bringing in transparency and competitiveness 
in operations of cooperatives and expanding economic horizons of these entities are the areas of focus for the government. 
Modernisation and Competitiveness in Cooperatives
ndia has a rich cooperative heritage and 
a robust cooperative sector. Currently, 
there are two types of cooperative 
structures in the country -- State 
Cooperative Societies and Multi- State Cooperative 
Societies. The cooperative societies functioning 
in one state only are governed by the laws of the 
respective State Government and the cooperative 
societies functioning in more than one state are 
governed by the Central law -- the Multi-State 
Cooperative Societies Act, 2002 (Act 39 of 2002). 
The cooperatives have been the soul of Indian 
culture and the country has given the idea or 
concept of cooperatives to 
the world. Out of 30 lakh 
cooperative societies in the 
world, around 8.55 lakh are 
in India and about 13 crore 
people are directly associated 
with them. Around 91 percent 
villages in India have some 
form of cooperatives working 
in them. Amongst the 300 
largest cooperative societies 
globally, three societies 
-- Gujarat Cooperative 
Milk Marketing Federation 
popularly referred as Amul, 
Indian Farmers Fertiliser 
Cooperative (IFFCO) and 
Krishak Bharati Cooperative 
Limited (KRIBHCO) are in 
India.
To give new dimensions 
and strengthen the cooperative 
sector in the country through 
policy and other interventions, 
the Government set up a new 
I
Ministry of Cooperation on July 6
th
, 2021 to provide a 
separate administrative, legal and policy framework 
for strengthening the cooperative movement in 
the country. The focus of the Ministry has been 
to provide renewed impetus to the growth of the 
cooperative sector. As per the statistics of National 
Cooperative Union of India (NCUI) 2018, there are 
8.55 lakh cooperative units in the country. Some 
of the issues affecting accelerated and equitable 
growth of cooperatives, inter alia, are lack of effective 
professional management in cooperative units, and 
low level of technology adoption.
The author is a journalist. Views expressed are personal. Email: writerfoodsd@gmail.com
Kurukshetra       January  2023 35
The New National Cooperative Policy and 
schemes are being drafted with the aim to deepen 
co-operatives as a true people-based movement 
reaching up to the grassroots and develop a 
cooperative based economy model including 
giving focus on ‘Make in India’. This will address all 
developmental issues of cooperatives. Inputs or 
suggestions of the stakeholders including Central 
Government Ministries have been sought. To make 
cooperatives more transparent and efficient, the 
Ministry has started stakeholder consultations on 
relevant interventions viz. creation of a National 
database of Cooperatives, digitalisation of about 
63000 active Primary Agriculture Credit Societies 
(PACS). Cooperatives have contributed a lot in all 
areas related to agriculture finance distribution and 
agriculture. There are 1.5 lakh dairy and housing 
societies, 46,000 honey cooperative societies, 
26,000 consumer societies, many fisheries 
cooperatives and many cooperative sugar mills in 
the country. 51 percent villages and 94 percent 
farmers are associated with cooperatives in some 
form or the other. The contribution of cooperatives 
in the country's economy is significant. The 
cooperative sector gives 20 percent of the total 
agricultural credit of the country, 35 percent of the 
fertiliser distribution is done by the cooperative 
sector, 25 percent of fertiliser production, 31 
percent of sugar production, more than 10 percent 
of milk production is done through cooperatives, 
more than 13 percent procurement of wheat from 
the farmers by government agencies and more than 
20 percent of the procurement of paddy is done by 
the cooperative sector. More than 21 percent of 
the fishermen's business is done by cooperative 
societies. 
While cooperatives have made a significant 
contribution to India’s economy in the last several 
decades, the government has stressed that 
cooperatives must be a vital contribution in realising 
the Prime Minister, Shri Narendra Modi’s dream of 
making India a $ 5 trillion economy.
New legislation for Ensuring Transparency and 
Accountability of Cooperatives
To bring accountability and governance 
structure of cooperatives, the government has 
introduced the Multi-State Co-operative Societies 
(MSCSs) (Amendment) Bill, 2022, in the Lok Sabha 
on December 7, 2022. The act was first passed in 
Parliament in 2002. The new bill provides that the 
Centre government will establish the Cooperatives 
Election Authority to conduct election, supervise, 
direct and control the preparation of electoral rolls, 
and perform other prescribed functions. The bill also 
has provision for the amalgamation and division of 
MSCSs. The merger of a state cooperative with an 
existing MSCSs is also dealt with in the bill. The MSCS 
(amendment) bill has been referred to a 21 member 
panel comprising of Lok Sabha and Rajya Sabha 
members.
For creating a professional management 
structure, the bill has provisions for bringing in 
directors with experience in the field of banking, 
management and finance. The Union Cooperation 
Minister Shri Amit Shah on several occasions had 
stressed the role of cooperatives in dairy, fertiliser, 
sugar, fisheries, agri-credit sectors and called for 
diversification of these bodies to other sectors. There 
are more than 100 multi-state cooperative diaries 
and 70 multi-state cooperative banks.  
There are 1500 odd MSCSs in 30 states and 
union territories engaged in various economic 
activities including in the dairy, fertiliser and several 
other sectors. Major chunk of these bodies are in 
Maharashtra (655), Uttar Pradesh (154), Tamil Nadu 
(123), Gujarat (42). The multi-state cooperative 
societies act, 2002 was enacted with a view to 
facilitate democratic and autonomous working of 
these cooperatives.
Professionalising Cooperatives and Boost 
Economic Growth
The Union Minister for Home and Cooperation 
Shri Amit Shah recently said while mass production 
is necessary for the development of the country’s 
economy, ‘Production by Masses’ is also very 
important and it would come from cooperatives. 
“For this, our cooperative policy will take the country 
far ahead. We have set the focus of this policy – free 
registration, computerisation, democratic elections, 
ensuring active membership, professionalism in 
governance and leadership, professionalism and 
transparency, and accountability,” he had said. 
The government at present wants to incorporate 
effective human resource policy, which should have 
transparency in recruitment, empowerment of 
Kurukshetra       January  2023 36
infrastructure, use of technology and policy-rules and 
guidelines for this. The Union Cooperation Minister 
also said, PACS will have to be made multipurpose, 
which is the need of the day. Many new dimensions 
that we want to add through these model bylaws also 
have the provision of transparency, accountability 
and mobility. “By doing this we will be successful 
in strengthening the core unit of the cooperative 
sector and give a new and long and strong life to the 
cooperative sector,” Shri Shah had stressed.
At present about 65,000 PACS are being created  
and the government is aiming to set up 3,00,000 
new PACS in next 5 years. Thus, we have set a target 
of registering around 2,25,000 PACS. These PACS 
will be in the sectors such as dairy, FPOs, water and 
gas distribution, bio-gas generation and storage.
The governments’ plan is to ensure that panchayats 
which do not have PACS should establish one.
If PACS are to be made multi-purpose, there 
is a need to look at the accounting system. The 
government has decided to computerise PACS for 
smooth seamless transactions. “We will computerise 
65,000 PACS in the first phase and a good software 
is also being developed by the Cooperation Ministry 
of the Government of India in which all works will be 
included,” Shri Shah had said.
After this, PACS, District Cooperative Banks, 
State Cooperative Banks and NABARD, will run on the 
common software and the same type of accounting 
system, which will also facilitate online audit. Experts 
say that many of the problems will be solved by 
accepting the bylaws of PACS, computerisation of 
PACS and adoption of new software. This software 
will be available in all languages so that every State 
will be able to conduct business for their PACS in 
their native language.
The Union Cooperation Minister had earlier 
noted that by liquidating defunct PACS as soon as 
possible, new PACS should be formed because as 
long as the old PACS are in existence, new PACS will 
not be able to be formed. Till now, PACS are engaged 
only in disbursing short term finance, but now PACS 
should also be able to disburse the medium and long-
term finance as well. A proposal is being mooted on 
this to authorise PACS to expand their role in lending 
activities. By proactively cooperating with the State 
Marketing Federation, the National Agricultural 
Cooperative Marketing Federation of India (NAFED) 
will actively integrate the PACS with marketing and 
the entire marketing profit will eventually reach 
the PACS through the NAFED State and District 
Federation. For so many changes, trained manpower, 
youth who know cooperative finance, youth who 
know computers, youth who imbibe the concept of 
cooperatives would be needed.
Skill Development
For providing trained manpower to the 
cooperative, the government has also initiated a 
process to form a cooperative university. The plan 
is to also open one affiliated college in every State 
so that different types of cooperatives will be able 
to train manpower. To boost the export potential 
of cooperatives where nearly 300 million people 
are associated with it, the Ministry of Cooperation 
is working towards creation of a dedicated exports 
house. This database of cooperatives will be provided 
access to the District and its Union and District 
Cooperative Banks.
The government is also proposing to form 
a multi-state cooperative - Seed Production 
Cooperative by merging four or five big cooperatives 
at the national level to enhance the quality of seeds 
and preserve and promote our old seeds. The 
government has been giving thrust on expanding 
natural farming for reducing use of chemical 
fertiliser. Large cooperatives such Amul, IFFCO, 
NAFED, NCDC and KRIBHCO are going to form a 
multistate export house which will work to export 
Khadi products, handicrafts and agriculture products 
to the worldwide market. To export the product of 
the smallest cooperative unit, it will become a multi-
state cooperative export house and this itself will 
take it further.
The National Cooperative Development 
Corporation (NCDC), a statutory organisation under 
the Ministry of Cooperation, provides financial 
assistance to the cooperative sector and undertakes 
various activities such as strengthening share capital 
base of primary and district cooperative marketing 
societies, setting up of processing centres, storage 
facilities, establishing and modernising cold chain, 
creation of cooperative banking units, agricultural 
services, Integrated Cooperative Development 
Projects, assistance for computerisation of 
Kurukshetra       January  2023 37
cooperatives, ‘Yuva-Sahkar’ for cooperative 
enterprise support and innovation, ‘Ayushman 
Sahkar’ covering healthcare sector, ‘Nandini Sahkar’ 
to support women cooperatives etc. The government 
is also taking initiative to formulate Cooperation to 
Prosperity scheme aiming at overall development of 
these entities.
Schemes for Expanding Cooperatives Activities
A scheme for modernising and professionalising 
the cooperative education and training institutions 
across the country is also under formulation. In 
addition to the initiatives taken by the Ministry of 
Cooperation, other Ministries/ Departments are also 
running several schemes for providing benefits to 
the cooperatives, such as: Agriculture Infrastructure 
fund (Ministry of Agriculture and Farmers Welfare) – 
Interest subvention of 3 percent and credit guarantee 
is provided by the Government for availing loan up 
to Rs. 2 crores, for development of infrastructure 
projects at farm gates, by FPO, PACS, entrepreneurs, 
start-ups and other beneficiaries.
Dairy Processing and Infrastructure 
Development Fund being implemented by the 
Department of Animal Husbandry and Dairying 
envisages providing loan assistance and interest 
subvention of 2.5 percent to State Dairy Federations, 
District Milk Unions, Milk Producers Companies, Multi 
State Cooperatives and NDDB subsidiaries across the 
country who are termed as Eligible End Borrowers 
(EEBs) for the purpose of establishing new milk 
processing units, its modernisation, re-development 
services, milk testing apparatus, BMC units, storage 
facilities, transportation and marketing.
Fisheries and Aquaculture Development Fund 
being implemented through the Department of 
Fisheries provides concessional finance support 
facility with 3 percent Interest Subvention for 
development of various inland fisheries activities 
which includes setting up of brood banks, 
development of hatcheries, development of 
aquaculture, establishment of cage culture in 
reservoir, construction of ice plants, construction of 
cold storage, fish transport etc.
Tribal Cooperative Marketing Development 
Federation of India Limited (TRIFED) spearheads 
implementation of Van Dhan programme for 
collection and selling on Minor Forest Produce 
(MFP) in districts which have predominantly forest 
dwelling tribal population. The idea is to set-up 
tribal community-owned Van Dhan Vikas Kendra 
Clusters in the Tribal Districts. For this purpose, 100 
percent assistance is provided by the Government 
to the collectives in the form of SHGs or Van Dhan 
Kendras.
Under the scheme for ‘Formation and 
Promotion of 10,000 Farmer Producer Organisations 
(FPOs)’, Laxmanrao Inamdar National Academy for 
Cooperative Research and Development (LINAC), 
Gurugram, promoted by National Cooperative 
Development Corporation (NCDC) is designated as 
the Nodal training institution at Central level for 
FPOs registered under Cooperative Societies Act and 
promoted by NCDC.
Similarly, the Bankers Institute of Rural 
Development (BIRD) Lucknow, promoted by National 
Bank for Agriculture and Rural Development 
(NABARD) is designated as nodal training institution 
at Central level for FPOs promoted by NABARD 
and Small Farmers Agri-Business Consortium and 
other allowed/designated implementing agencies. 
Besides the above, training to cooperative societies 
and FPOs is also imparted by National Council for 
Cooperative Training through its 5 Regional Institutes 
of Cooperative Management (RICMs), 14 Institutes 
of Cooperative Management (ICMs) spread across 
the country and Vaikunth Mehta National Institute 
of Cooperative Management, Pune. The National 
Cooperative Union of India through its National 
Centre for Cooperative Education and its Cooperative 
Education Field Projects has also been organising 
various skill development programmes for the 
cooperative societies.
Besides, as per the Union Budget (2022-23) 
announcement, the Government had reduced the 
surcharge for cooperative societies from 12 percent 
to 7 percent for those having a total income of more 
than Rs. 1 crore and up to Rs. 10 crore. Further, to 
provide a level playing field between co- operative 
societies and companies, Minimum Alternate Tax 
rate for cooperative societies was reduced from 18.5 
percent to 15 percent.
As per notification issued on February 3
rd
, 
2022, a Credit Guarantee Fund Trust for Micro and 
Small Enterprises, non-scheduled Urban Cooperative 
Page 5


Kurukshetra       January  2023 34
 Sandip Das
Multi-prolonged strategies to boost the cooperatives sector in the country has been initiated through a series of measures 
announced by Ministry of Cooperation so that the cooperatives play a critical role in boosting Indian economy and they are 
treated at par with the other economic forms. Skill development of manpower , bringing in transparency and competitiveness 
in operations of cooperatives and expanding economic horizons of these entities are the areas of focus for the government. 
Modernisation and Competitiveness in Cooperatives
ndia has a rich cooperative heritage and 
a robust cooperative sector. Currently, 
there are two types of cooperative 
structures in the country -- State 
Cooperative Societies and Multi- State Cooperative 
Societies. The cooperative societies functioning 
in one state only are governed by the laws of the 
respective State Government and the cooperative 
societies functioning in more than one state are 
governed by the Central law -- the Multi-State 
Cooperative Societies Act, 2002 (Act 39 of 2002). 
The cooperatives have been the soul of Indian 
culture and the country has given the idea or 
concept of cooperatives to 
the world. Out of 30 lakh 
cooperative societies in the 
world, around 8.55 lakh are 
in India and about 13 crore 
people are directly associated 
with them. Around 91 percent 
villages in India have some 
form of cooperatives working 
in them. Amongst the 300 
largest cooperative societies 
globally, three societies 
-- Gujarat Cooperative 
Milk Marketing Federation 
popularly referred as Amul, 
Indian Farmers Fertiliser 
Cooperative (IFFCO) and 
Krishak Bharati Cooperative 
Limited (KRIBHCO) are in 
India.
To give new dimensions 
and strengthen the cooperative 
sector in the country through 
policy and other interventions, 
the Government set up a new 
I
Ministry of Cooperation on July 6
th
, 2021 to provide a 
separate administrative, legal and policy framework 
for strengthening the cooperative movement in 
the country. The focus of the Ministry has been 
to provide renewed impetus to the growth of the 
cooperative sector. As per the statistics of National 
Cooperative Union of India (NCUI) 2018, there are 
8.55 lakh cooperative units in the country. Some 
of the issues affecting accelerated and equitable 
growth of cooperatives, inter alia, are lack of effective 
professional management in cooperative units, and 
low level of technology adoption.
The author is a journalist. Views expressed are personal. Email: writerfoodsd@gmail.com
Kurukshetra       January  2023 35
The New National Cooperative Policy and 
schemes are being drafted with the aim to deepen 
co-operatives as a true people-based movement 
reaching up to the grassroots and develop a 
cooperative based economy model including 
giving focus on ‘Make in India’. This will address all 
developmental issues of cooperatives. Inputs or 
suggestions of the stakeholders including Central 
Government Ministries have been sought. To make 
cooperatives more transparent and efficient, the 
Ministry has started stakeholder consultations on 
relevant interventions viz. creation of a National 
database of Cooperatives, digitalisation of about 
63000 active Primary Agriculture Credit Societies 
(PACS). Cooperatives have contributed a lot in all 
areas related to agriculture finance distribution and 
agriculture. There are 1.5 lakh dairy and housing 
societies, 46,000 honey cooperative societies, 
26,000 consumer societies, many fisheries 
cooperatives and many cooperative sugar mills in 
the country. 51 percent villages and 94 percent 
farmers are associated with cooperatives in some 
form or the other. The contribution of cooperatives 
in the country's economy is significant. The 
cooperative sector gives 20 percent of the total 
agricultural credit of the country, 35 percent of the 
fertiliser distribution is done by the cooperative 
sector, 25 percent of fertiliser production, 31 
percent of sugar production, more than 10 percent 
of milk production is done through cooperatives, 
more than 13 percent procurement of wheat from 
the farmers by government agencies and more than 
20 percent of the procurement of paddy is done by 
the cooperative sector. More than 21 percent of 
the fishermen's business is done by cooperative 
societies. 
While cooperatives have made a significant 
contribution to India’s economy in the last several 
decades, the government has stressed that 
cooperatives must be a vital contribution in realising 
the Prime Minister, Shri Narendra Modi’s dream of 
making India a $ 5 trillion economy.
New legislation for Ensuring Transparency and 
Accountability of Cooperatives
To bring accountability and governance 
structure of cooperatives, the government has 
introduced the Multi-State Co-operative Societies 
(MSCSs) (Amendment) Bill, 2022, in the Lok Sabha 
on December 7, 2022. The act was first passed in 
Parliament in 2002. The new bill provides that the 
Centre government will establish the Cooperatives 
Election Authority to conduct election, supervise, 
direct and control the preparation of electoral rolls, 
and perform other prescribed functions. The bill also 
has provision for the amalgamation and division of 
MSCSs. The merger of a state cooperative with an 
existing MSCSs is also dealt with in the bill. The MSCS 
(amendment) bill has been referred to a 21 member 
panel comprising of Lok Sabha and Rajya Sabha 
members.
For creating a professional management 
structure, the bill has provisions for bringing in 
directors with experience in the field of banking, 
management and finance. The Union Cooperation 
Minister Shri Amit Shah on several occasions had 
stressed the role of cooperatives in dairy, fertiliser, 
sugar, fisheries, agri-credit sectors and called for 
diversification of these bodies to other sectors. There 
are more than 100 multi-state cooperative diaries 
and 70 multi-state cooperative banks.  
There are 1500 odd MSCSs in 30 states and 
union territories engaged in various economic 
activities including in the dairy, fertiliser and several 
other sectors. Major chunk of these bodies are in 
Maharashtra (655), Uttar Pradesh (154), Tamil Nadu 
(123), Gujarat (42). The multi-state cooperative 
societies act, 2002 was enacted with a view to 
facilitate democratic and autonomous working of 
these cooperatives.
Professionalising Cooperatives and Boost 
Economic Growth
The Union Minister for Home and Cooperation 
Shri Amit Shah recently said while mass production 
is necessary for the development of the country’s 
economy, ‘Production by Masses’ is also very 
important and it would come from cooperatives. 
“For this, our cooperative policy will take the country 
far ahead. We have set the focus of this policy – free 
registration, computerisation, democratic elections, 
ensuring active membership, professionalism in 
governance and leadership, professionalism and 
transparency, and accountability,” he had said. 
The government at present wants to incorporate 
effective human resource policy, which should have 
transparency in recruitment, empowerment of 
Kurukshetra       January  2023 36
infrastructure, use of technology and policy-rules and 
guidelines for this. The Union Cooperation Minister 
also said, PACS will have to be made multipurpose, 
which is the need of the day. Many new dimensions 
that we want to add through these model bylaws also 
have the provision of transparency, accountability 
and mobility. “By doing this we will be successful 
in strengthening the core unit of the cooperative 
sector and give a new and long and strong life to the 
cooperative sector,” Shri Shah had stressed.
At present about 65,000 PACS are being created  
and the government is aiming to set up 3,00,000 
new PACS in next 5 years. Thus, we have set a target 
of registering around 2,25,000 PACS. These PACS 
will be in the sectors such as dairy, FPOs, water and 
gas distribution, bio-gas generation and storage.
The governments’ plan is to ensure that panchayats 
which do not have PACS should establish one.
If PACS are to be made multi-purpose, there 
is a need to look at the accounting system. The 
government has decided to computerise PACS for 
smooth seamless transactions. “We will computerise 
65,000 PACS in the first phase and a good software 
is also being developed by the Cooperation Ministry 
of the Government of India in which all works will be 
included,” Shri Shah had said.
After this, PACS, District Cooperative Banks, 
State Cooperative Banks and NABARD, will run on the 
common software and the same type of accounting 
system, which will also facilitate online audit. Experts 
say that many of the problems will be solved by 
accepting the bylaws of PACS, computerisation of 
PACS and adoption of new software. This software 
will be available in all languages so that every State 
will be able to conduct business for their PACS in 
their native language.
The Union Cooperation Minister had earlier 
noted that by liquidating defunct PACS as soon as 
possible, new PACS should be formed because as 
long as the old PACS are in existence, new PACS will 
not be able to be formed. Till now, PACS are engaged 
only in disbursing short term finance, but now PACS 
should also be able to disburse the medium and long-
term finance as well. A proposal is being mooted on 
this to authorise PACS to expand their role in lending 
activities. By proactively cooperating with the State 
Marketing Federation, the National Agricultural 
Cooperative Marketing Federation of India (NAFED) 
will actively integrate the PACS with marketing and 
the entire marketing profit will eventually reach 
the PACS through the NAFED State and District 
Federation. For so many changes, trained manpower, 
youth who know cooperative finance, youth who 
know computers, youth who imbibe the concept of 
cooperatives would be needed.
Skill Development
For providing trained manpower to the 
cooperative, the government has also initiated a 
process to form a cooperative university. The plan 
is to also open one affiliated college in every State 
so that different types of cooperatives will be able 
to train manpower. To boost the export potential 
of cooperatives where nearly 300 million people 
are associated with it, the Ministry of Cooperation 
is working towards creation of a dedicated exports 
house. This database of cooperatives will be provided 
access to the District and its Union and District 
Cooperative Banks.
The government is also proposing to form 
a multi-state cooperative - Seed Production 
Cooperative by merging four or five big cooperatives 
at the national level to enhance the quality of seeds 
and preserve and promote our old seeds. The 
government has been giving thrust on expanding 
natural farming for reducing use of chemical 
fertiliser. Large cooperatives such Amul, IFFCO, 
NAFED, NCDC and KRIBHCO are going to form a 
multistate export house which will work to export 
Khadi products, handicrafts and agriculture products 
to the worldwide market. To export the product of 
the smallest cooperative unit, it will become a multi-
state cooperative export house and this itself will 
take it further.
The National Cooperative Development 
Corporation (NCDC), a statutory organisation under 
the Ministry of Cooperation, provides financial 
assistance to the cooperative sector and undertakes 
various activities such as strengthening share capital 
base of primary and district cooperative marketing 
societies, setting up of processing centres, storage 
facilities, establishing and modernising cold chain, 
creation of cooperative banking units, agricultural 
services, Integrated Cooperative Development 
Projects, assistance for computerisation of 
Kurukshetra       January  2023 37
cooperatives, ‘Yuva-Sahkar’ for cooperative 
enterprise support and innovation, ‘Ayushman 
Sahkar’ covering healthcare sector, ‘Nandini Sahkar’ 
to support women cooperatives etc. The government 
is also taking initiative to formulate Cooperation to 
Prosperity scheme aiming at overall development of 
these entities.
Schemes for Expanding Cooperatives Activities
A scheme for modernising and professionalising 
the cooperative education and training institutions 
across the country is also under formulation. In 
addition to the initiatives taken by the Ministry of 
Cooperation, other Ministries/ Departments are also 
running several schemes for providing benefits to 
the cooperatives, such as: Agriculture Infrastructure 
fund (Ministry of Agriculture and Farmers Welfare) – 
Interest subvention of 3 percent and credit guarantee 
is provided by the Government for availing loan up 
to Rs. 2 crores, for development of infrastructure 
projects at farm gates, by FPO, PACS, entrepreneurs, 
start-ups and other beneficiaries.
Dairy Processing and Infrastructure 
Development Fund being implemented by the 
Department of Animal Husbandry and Dairying 
envisages providing loan assistance and interest 
subvention of 2.5 percent to State Dairy Federations, 
District Milk Unions, Milk Producers Companies, Multi 
State Cooperatives and NDDB subsidiaries across the 
country who are termed as Eligible End Borrowers 
(EEBs) for the purpose of establishing new milk 
processing units, its modernisation, re-development 
services, milk testing apparatus, BMC units, storage 
facilities, transportation and marketing.
Fisheries and Aquaculture Development Fund 
being implemented through the Department of 
Fisheries provides concessional finance support 
facility with 3 percent Interest Subvention for 
development of various inland fisheries activities 
which includes setting up of brood banks, 
development of hatcheries, development of 
aquaculture, establishment of cage culture in 
reservoir, construction of ice plants, construction of 
cold storage, fish transport etc.
Tribal Cooperative Marketing Development 
Federation of India Limited (TRIFED) spearheads 
implementation of Van Dhan programme for 
collection and selling on Minor Forest Produce 
(MFP) in districts which have predominantly forest 
dwelling tribal population. The idea is to set-up 
tribal community-owned Van Dhan Vikas Kendra 
Clusters in the Tribal Districts. For this purpose, 100 
percent assistance is provided by the Government 
to the collectives in the form of SHGs or Van Dhan 
Kendras.
Under the scheme for ‘Formation and 
Promotion of 10,000 Farmer Producer Organisations 
(FPOs)’, Laxmanrao Inamdar National Academy for 
Cooperative Research and Development (LINAC), 
Gurugram, promoted by National Cooperative 
Development Corporation (NCDC) is designated as 
the Nodal training institution at Central level for 
FPOs registered under Cooperative Societies Act and 
promoted by NCDC.
Similarly, the Bankers Institute of Rural 
Development (BIRD) Lucknow, promoted by National 
Bank for Agriculture and Rural Development 
(NABARD) is designated as nodal training institution 
at Central level for FPOs promoted by NABARD 
and Small Farmers Agri-Business Consortium and 
other allowed/designated implementing agencies. 
Besides the above, training to cooperative societies 
and FPOs is also imparted by National Council for 
Cooperative Training through its 5 Regional Institutes 
of Cooperative Management (RICMs), 14 Institutes 
of Cooperative Management (ICMs) spread across 
the country and Vaikunth Mehta National Institute 
of Cooperative Management, Pune. The National 
Cooperative Union of India through its National 
Centre for Cooperative Education and its Cooperative 
Education Field Projects has also been organising 
various skill development programmes for the 
cooperative societies.
Besides, as per the Union Budget (2022-23) 
announcement, the Government had reduced the 
surcharge for cooperative societies from 12 percent 
to 7 percent for those having a total income of more 
than Rs. 1 crore and up to Rs. 10 crore. Further, to 
provide a level playing field between co- operative 
societies and companies, Minimum Alternate Tax 
rate for cooperative societies was reduced from 18.5 
percent to 15 percent.
As per notification issued on February 3
rd
, 
2022, a Credit Guarantee Fund Trust for Micro and 
Small Enterprises, non-scheduled Urban Cooperative 
Kurukshetra       January  2023 38
Banks, State Cooperative 
Banks and District Central 
Cooperative Banks 
have been created. This 
will help in providing 
adequate, affordable and 
timely credit to the co-
operative institutions to 
give a boost to the co-
operative based economic 
development model.
On June 1, 2022, the 
mandate of Government 
e-Marketplace – Special 
Purpose Vehicle (GeM 
- SPV) was expanded 
to allow cooperative 
societies to register 
as buyers on the GeM 
platform. Subsequently 
on June 29, 2022, a 
centrally sponsored 
project for digitalisation 
of 63,000 functional PACS, 
with a budgetary outlay of 
Rs 2,516 crore, has been 
sanctioned to revitalise 
the cooperative sector.
The implementation of this project has 
recently commenced. In order to diversify the 
business activities of PACS and make them vibrant 
multipurpose economic entities, draft model Bye-
Laws are being prepared in consultation with State 
Governments, National Cooperative Federations 
and other stakeholders. A new scheme titled 
“Cooperation to Prosperity” is being formulated in 
consultation with all the stakeholders for all-round 
development of cooperatives at all levels. In order 
to facilitate the Government to make appropriate 
policy interventions, a National Co-operative 
Database is being created in consultation with State/
UT Governments, National Co-operative Federations 
and other stakeholders. In order to modernise 
and professionalise the education and training in 
the cooperative sector, steps are being taken to 
reorient the training and educational cooperative 
institutions in consultation with all the stakeholders. 
The Cooperation Ministry is continuously working 
on giving a new impetus to the development 
of the cooperative sector, strengthening and 
professionalising these institutions and making it a 
model of all-inclusive development.
References
1. https://pib.gov.in/PressReleaseIframePage.
aspx?PRID=1857843
2. https://pib.gov.in/PressReleaseIframePage.
aspx?PRID=1839169
3. h ttp s://pi b. g o v. i n/Pr essRel easePag e.
aspx?PRID=1857025
4. h ttp s://pi b. g o v. i n/Pr essRel easePag e.
aspx?PRID=1796822
5. http://164.100.24.220/loksabhaquestions/
annex/179/AU1538.pdf
6. https://pib.gov.in/PressReleaseIframePage.
aspx?PRID=1845029