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Congress-NCP oppose new cooperative Act clauses

Sanjay Jog/Mumbai 03 Feb 13 | 12:52 AM

Though the Congress and the Nationalist Congress Party (NCP) may fight the next elections in Maharashtra separately, when it comes to the cooperative sector, they sing a common tune.

The state Cabinet has given an in-principle approval to amend the Maharashtra Cooperative Societies Act, 1960, applicable to 2,47,000 cooperative bodies with an annual turnover of about Rs 6 lakh crore and a member strength of about 5,50,000. The amendment follows the 97th constitutional amendment passed by Parliament. As reported by Business Standard, next week, after the state government issues an ordinance, the new Act would be effective from February 16.

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Congress and NCP ministers have opposed a provision in the new Act under which cooperative societies deposit funds in nationalised banks, scheduled banks, urban cooperative banks, district central cooperative banks and the Maharashtra State Cooperative Bank. The ministers have insisted only cooperative bodies with an ‘A’ audit grade for the last three years be allowed to invest in nationalised banks, scheduled banks and urban cooperative banks.

“According to the 97th constitutional amendment, the investment of funds was allowed in other banks under Article 43B to provide autonomy and under Article 243ZI to facilitate professional management. However, there was consensus that cooperative bodies, if thrown open to fierce competition, might face hurdles and, therefore, bodies with ‘A’ audit class for the last three years would be able to park their funds in nationalised, scheduled and urban cooperative banks," a senior NCP minister told Business Standard.

The Congress and the NCP had also opposed Section 18 in the amended Act. According to this section, an expert management panel could be set up if a non-government aided cooperative body turned sick. “In case non-government aided cooperative bodies that haven’t taken any loan, government guarantee or government share capital become sick after irregularities, the government would have no direct control under the new Act. Therefore, the cooperation department suggested an interim board of experts be constituted to prepare a scheme for rehabilitation or revival. However, it has been decided to take a final view on this after seeking the opinion of the law and judiciary department," said Harshvardhan Patil, state minister for cooperation.

“For cooperative bodies whose five-year terms wouldn’t be completed by February 15, their board of directors would continue to function till the term is over," he added.

Patil said cooperative bodies wouldn’t be granted any extensions to convene annual general meetings. The strength of the board of directors of these bodies would be fixed at 21. Of these, five posts would be reserved for women, one for the Scheduled Caste/Scheduled Tribe category, one for other backward classes and one for Vimukta Jati and notified tribes.

Cooperative housing societies could initiate the recovery of dues from defaulters under Section 101, instead of the current system of initiating the process through the cooperative department, Patil said, adding if the entity concerned continued to default, these societies could resort to coercive measures, seizure or disposal of a flat.

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