Amendments to the Co-operative Societies Act

CategoryPolity

Last Updated23/12/2022

The Lok Sabha recently referred the Multi-State Co-operative Societies (Amendment) Bill 2022 to a joint committee of Parliament.
The Bill is aimed at overhauling the existing law, which was enacted 20 years ago.

Aim: To govern such cooperatives whose members and areas of operation are spread across more than one state.
Vision: To facilitate the voluntary formation and democratic functioning of co-operatives as people’s institutions based on self-help and mutual aid.
Objective: To enable them to promote their economic and social betterment and to provide functional autonomy.

Incorporating changes taken place in field of cooperatives: Earlier, cooperation was a department under Ministry of Agriculture but now a separate Ministry.
Strengthening governance & reforming electoral process: and ensuring ease of doing business in multi-State cooperative societies.
Enabling the raising of funds: in the multi-State cooperative societies.
Stricter punishments in the bill: Clause 37 seeks to amend section 104 of the Act to increase the amount of penalty for certain offences.

Current rules: Only multi-state cooperative societies can amalgamate themselves and form a new multi-state co-operative society.
New rules: Provide that “any co-operative society may, by a resolution passed by majority of not less than ⅔ rd of the members present and voting, decide to merge into an existing multi-State co-operative society.

Aim: to bring “electoral reforms” in the co-operative sector.
Composition: shall consist of a Chairperson, a Vice-Chairperson and members not exceeding three to be appointed by the Centre.
Qualifications for Chairperson: has held the post of Additional Secretary to the Government of India or equivalent rank;
Qualifications for Vice-Chairperson: held the post of Joint Secretary to the Government of India or equivalent rank
Term: The Chairperson, Vice-Chairperson or Member will hold office for three years or until they attain the age of 65 years, whichever is earlier
Re-appointment: shall be eligible for re-appointment,.

Insertion of Part IXB: (The Co-Operative Societies) in the Constitution.
Inclusion of the right to form cooperative societies: as Right to Freedom under article 19 (1), Part-3 of the Constitution.
Insertion of Article 43-B: (Promotion of Cooperation societies) as one of the Directive Principles of State Policy under Part 4 of the Constitution of India.

Proposal to insert a new Chapter IXA (“redressal of complaints”): Under this, the govt has proposed to appoint 1 or more “Co-operative Ombudsman” for inquiring into the complaints made by the members.
Function: to complete the process of inquiry and adjudicate within three months on receipt of the complaint.
Can issue necessary directions to the society: during inquiry and the society shall be bound to comply with the same within one month.
Provision of appeal: the society can appeal an Ombudsman decision within 1 month before the Central Registrar, who shall decide on it within 45 days.
Powers of civil court: to the ombudsman in summoning and examination.

Insertion of a section 63A in principal Act: relating to “establishment of the Co-operative Rehabilitation, Reconstruction and Development Fund” for revival of “sick multi-State co-operative societies”.
Insertion of a section 70A: relating to “concurrent audit” for multi-state co-operative societies having an annual turnover of > the amount as determined by the Central Government.

Aim: to provide information relating to affairs and management of the multi-state co-operative society to the members of such society.