New PACS in state, an attempt to breach Congress-NCP citadel?

The Maharashtra government will establish multipurpose primary agricultural cooperative societies in all villages across the state, following directives from the union cooperation ministry. The move is seen as an attempt to help the Bharatiya Janata Party penetrate the cooperative sector, which has been a stronghold of both Congress and Nationalist Congress Party in the state for decades. The new PACS will help in creating a parallel system against those being controlled by the opposition parties.

Strap: Union cooperation ministry directs state to form at least one multipurpose PACS in each village

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MUMBAI: The Maharashtra government has decided to set up multipurpose primary agricultural cooperative societies (PACS) in all the villages across the state.

The decision was taken following the directives from the union cooperation ministry asking the state to ensure formation of at least one multipurpose PACS in each village of the state.

The state government will be allocating land and providing all the basic amenities to these multipurpose PACS.

Though the state cooperation department insisted that this will help strengthen the sector, the move is being seen as an attempt to help Bharatiya Janata Party (BJP) penetrate the cooperative sector, which has been a stronghold of both Congress and Nationalist Congress Party (NCP) in the state for decades.

In July 2021, the central government constituted the union cooperation ministry despite it being a state subject. Union home minister Amit Shah is heading the cooperation ministry.

“To strengthen the cooperative movement and to incorporate the last person in the sector, the central government on March 17 this year approved the setting up of a multipurpose primary agriculture cooperative society (PACS) in all the villages and gram panchayats where they do not exist. The PACS will also run all the schemes adopted by the central government, states a government resolution (GR) issued by the state cooperation department on April 13.

Following this, the state government has formed a state cooperative development committee (SCDC), headed by the chief secretary that will have to ensure the constitution of PACS in all the villages.

“The SCDC will help them in coordinating with the district central cooperative bank and Maharashtra state cooperative bank and work to make them financially capable. It will not only have to allot land for such societies but have to ensure all the basic amenities are provided to them,” added the GR.

PACS provides services such as giving loans to the farmers for agricultural activities. They also run cooperative bodies such as sugar mills, spinning mills among others to generate income.

The management of PACS is generally controlled by local politicians mainly associated with Congress and the NCP. The new PACS are likely to help in creating a parallel system against those being controlled by the opposition parties, it is believed.

Anoop Kumar, additional chief secretary, cooperation department said that the Maharashtra Cooperative Societies Act does not forbid the opening of new PACS.

“There is no provision in the existing laws that the new PACS cannot be set up. The move will help in covering all those who are alienated from the existing set up of cooperative bodies,” he said, adding that the sector will strengthen if more people are covered.

For decades, the cooperation sector has been the backbone of the rural economy in Maharashtra. It changed the face of rural Maharashtra with farmers getting benefit as cooperative sugar factories, banks and dairy units were formed.

It significantly reduced their exploitation by traders and middlemen as farmers became stakeholders in the local cooperative units. The cooperation movement flourished in various parts of Maharashtra as successive Congress governments encouraged the same since the formation of the state in 1960.

The rural economy of almost the entire western Maharashtra and several parts of north and central Maharashtra got a boost with the emergence of the cooperation sector. It also became a strong support base for Congress and later its offshoot, the NCP.

The local politics especially in the sugar belt in western Maharashtra spread from Pune to Kolhapur-Solapur is closely connected with the cooperation sector. It has become the strength of the NCP-Congress which was why even during the BJP dominance in 2014 and 2019 assembly elections, the two parties managed to retain many of their strongholds in rural Maharashtra.

The control over the sector and its close link with power has also led to a lot of malpractice and corruption. There have been a number of episodes of corruption and mismanagement in running cooperative banks and sugar factories.

The mismanagement and irregularities in the Maharashtra State Cooperative (MSC) Bank compelled the then chief minister Prithviraj Chavan to dissolve the board of directors of the banks and appoint an administrator following directives from the Reserve Bank of India (RBI) in 2011. The directors of the bank were mostly the NCP-Congress politicians.

The MSC bank is the apex co-operative bank in the state that controls credit in the entire co-operative sector and forms the backbone of the rural economy.

Gulabrao Devkar, director and former president, Jalgaon district central cooperative bank said that BJP’s motive is clear that they want to take control of the cooperative sector in the state but will not succeed.

“The state already has multipurpose PACS known as ‘Vividh Karyakari Sanstha’ in the rural areas and they have been working for years. I find it difficult to see what new the central government is offering except one that they want to infiltrate in the cooperation sector,” said Devkar, who is also a former NCP minister.

The BJP has been trying to breach the cooperation sector for the last two decades. They have succeeded in controlling urban cooperative bodies, but the rural areas are still far from their reach, and this is another way to bring their control.

“The BJP is aware of the fact they need control over the cooperative sector if they want to do long term politics in Maharashtra,” said Abhay Deshpande, a political analyst. He added that this is the reason senior BJP leaders such as Gopinath Munde and Nitin Gadkari started penetrating the sector by setting up cooperative sugar factories soon after Shiv Sena-BJP coalition government came to power in 1995.

He pointed out that there are many urban cooperative banks that are being controlled by the BJP, but they are still struggling to get control over cooperative bodies in the rural areas. “This is a new way to make inroads in the rural economy,” Deshpande said.

Vidyadhar Anaskar, chairman and administrator, MSC Bank opined that the PACS have been working as multipurpose societies and there is nothing new in it.

“The change brought by the central government is that they have made model bylaws through which they have allowed PACS to conduct non-agricultural activities such as running a hotel or school among others. The idea is fine, but this also requires expertise in that particular field. Further, their area of operation is too limited and thus all this needs to be taken into consideration before taking any decision,” said Anaskar.