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Will netas lose their hold over co-op sector?

india Updated: Jan 22, 2013 01:48 IST
Shailesh Gaikwad
Shailesh Gaikwad
Hindustan Times
Shailesh Gaikwad

Politicians in Maharashtra, especially from the ruling Congress and Nationalist Congress Party, are rattled by the proposed changes in the laws/rules governing the cooperative sector. Through the 97th amendment to the Constitution, the Central Government has made it mandatory for states to amend the cooperative laws to ensure autonomy and transparency into the cooperative sector. This should come into force from February 15 as Maharashtra government's efforts to delay the implementation by a year have not yielded any results. This means, from February there will be major changes in the way the politically influential cooperative sector is governed.

So why should this make our politicians unhappy? The answer lies in the provisions under the amendment. For decades, the powerful cooperative sector has helped the Congress-NCP to maintain their hold over rural politics. The sector contributed significantly in progress of rural Maharashtra. The cooperative banks-sugar-milk sector has been backbone of rural economy. Since it comes under direct control of state government, the ruling parties could misuse power to maintain its hold on the same and consequently on rural politics. Naturally, the sector did not remain free of corruption and other evils of power.

Over past couple of decades, there were many cases of misuse of power for politics and money. There were a number of cases of misappropriation of funds in cooperative sugar factories and banks. In one particular case, the directors of a few district cooperative bank deposited funds with a broker, allegedly in exchange of commission. In another case, relief fund for soldiers'' kin was collected from farmer-members of a cooperative sugar factory but was used for something else. In several cooperative banks, loans were given to relatives of directors without following due procedure. Of course, the borrowers did not bother to repay to the same. In political circles, it was always alleged that funds siphoned off from cooperative banks and factories were used by politicians during the elections.

The amendment aims at keeping this misuse in check. The elections to cooperative bodies will have to be held every five years. Those will be conducted by a separate election authority and not the collector or co-operation department, as has been the case so far. The law makes it mandatory for annual filing of returns, audited statements and holding annual general body meetings on time. No elected bodies can be given extension since they belong to the people from ruling parties. Politicians cannot appoint auditors of their choice and try to fool the monitoring agencies. The powers of state government will be minimised. It will have no right to appoint an administrator or suspend the board of directors.

And the implementation begins just ahead of 2014 elections. Is it a wonder that the politicians are worried about the changes in co-op law? There are some genuine concerns because some of the provisions under the amendment could lead to disruption in functioning of the cooperative bodies. With 2.5 lakh co-op bodies in state, the sector could get affected if things get stuck due to the amendment. But then, won't it be a case of a strong medicine having some side-effects while curing the patient?