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Cooperation ministry: Key citadel of Congress, NCP in trouble?

If former chief minister (CM) Narayan Rane’s induction into the Union cabinet has come as a clear signal to Shiv Sena that the Bharatiya Janata Party (BJP) will get more aggressive against it in the coming days, the creation of a separate ministry for the cooperative sector has sent alarm bells ringing in the Nationalist Congress Party (NCP)-Congress camp
By Shailesh Gaikwad and Faisal Malik
PUBLISHED ON JUL 11, 2021 12:22 AM IST

If former chief minister (CM) Narayan Rane’s induction into the Union cabinet has come as a clear signal to Shiv Sena that the Bharatiya Janata Party (BJP) will get more aggressive against it in the coming days, the creation of a separate ministry for the cooperative sector has sent alarm bells ringing in the Nationalist Congress Party (NCP)-Congress camp.

Maharashtra has strong network of cooperative bodies, which also forms a significant support base for the NCP-Congress. There are apprehensions in the ruling Maharashtra Vikas Aghadi (MVA) coalition that the cooperative sector in the state may turn into a new battleground between BJP and NCP-Congress, with the former trying to end the monopoly of the two parties in the sector.

For decades, the cooperative sector has been the backbone of 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 cooperatives movement flourished in various parts of Maharashtra as successive Congress governments encouraged the same since the state’s formation in 1960. Maharashtra now has around 225,000 cooperative bodies comprising sugar mills, banks, dairies and cotton spinning mills.

The rural economy of almost entire western Maharashtra and several parts of north and central Maharashtra got a boost with the emergence of the cooperative sector. It also became a strong support base for Congress and later its offshoot, the NCP. Local politics, especially in the sugar belt in western Maharashtra spread from Pune to Kolhapur-Solapur, is closely connected with the cooperatives sector. It has become the strength of the NCP-Congress which is why even during the BJP’s dominance in the 2014 and 2019 Assembly elections, the two parties had 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 lot of malpractices 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 Bank – the state’s apex cooperative bank – compelled then CM Prithviraj Chavan to dissolve the board of directors of the banks and appoint an administrator. The directors of the bank were mostly politicians from NCP and Congress.

“Though the official version is that the Union cooperation ministry is formed to improve the cooperation sector, it is likely that the Centre will take charge of the mechanism that controls the cooperative movement. It assumes political significance as the cooperative sector has a strong presence in Maharashtra, Karnataka and Gujarat, and has substantial influence over politics in these states. In Maharashtra, it forms the backbone of a party like NCP, whose chief Sharad Pawar was the architect of the three-party coalition (comprising Sena, NCP and Congress) formed to keep BJP out of power in the state,” said political analyst Hemant Desai.

“The Enforcement Directorate is already probing the allegations of corruption and misappropriation in MSC Bank as well as in the sale of Jarandeshwar Cooperative Sugar Factory in Satara which might get linked to [deputy CM] Ajit Pawar. It won’t be surprising if the NCP-Congress-controlled cooperative units come under scrutiny and if attempts are made by BJP to end their control over the sector,” he added.

On Friday, Ajit Pawar expressed his suspicion over the Centre’s move over forming the cooperation ministry.

“The intention of the Central government is yet to be clear but they may have something in their minds. It will be known only after the new legislations are introduced for the sector, just like the three contentious farm laws over which farmers are now protesting for the past eight months,”Ajit Pawar said in Pune.

He added that the cooperative sector has existed from the past 100 years and states have their own rules to deal with it. He insisted that the Centre should not “encroach” on states’ rights.

“There are some black sheep in the sector and I’m not denying it, but defaming the entire cooperation sector because of them is not fair,” the deputy CM said.

Former CM and BJP leader Devendra Fadnavis said, “Those who have done good work for the sector must be happy but those involved in malpractices must be obviously worried because [Union home minister] Amitbhai Shah will be heading the cooperation portfolio. He is also an expert in the field as he was a part of the sector before coming into politics.”

State BJP president Chandrakant Patil refuted the allegations that the new ministry is aimed at creating trouble for the cooperative sector in the state.

“The new ministry is formed to improve the sector. In fact, the cooperative sugar factories in the state were benefitted as the [Narendra] Modi government [in the Centre] for the first time fixed the minimum sale price for sugar,”Patil said in Pune on Saturday.

He added that there was no connection between his letter sent to Shah seeking probe into the sale of the 29 troubled cooperative sugar factories to private companies and the Centre’s decision.

“The decision to form a ministry for cooperation had been taken earlier,” said Patil.

The tussle between Centre and state over the sector began even before the formation of the cooperation ministry.

Recently, MVA government had decided to form a task force comprising ministers from the three parties to explore alternatives against the Centre’s amendment in the Banking Regulation Act, 1949, last year. The decision was taken following directives issued by Pawar. According to party insiders, the NCP leadership believes that the new amendments in the Act will end the cooperative banking system.

The 13-member committee formed on June 7 is headed by state revenue minister Balasaheb Thorat and eight other ministers from all the three ruling parties.

Experts are of the view that most of the provisions brought in the Banking Regulation Act are against the principles of the cooperative sector and creates a conflict.

“Most of the provisions passed by the Central government are related to the Companies Act which are against the principles of the cooperative sector,” said Vidyadhar Anaskar, former chairman and administrator of MSC Bank.

He said that the cooperative sector is a state subject.

“If the objective of both the state and the Central government is to strengthen the cooperative sector then there won’t be any issue. But if not, then the chances of conflict in the federal structure cannot be denied. As of now the objective of the ministry is said to be providing a separate administrative, legal and policy framework,” Anaskar added.

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