Cooperative banks key to sector growth, says Shah
The government has launched several steps to diversify businesses carried out by cooperative-based enterprises
NEW DELHI India has drawn up an ambitious agenda for the ongoing Global Cooperative Conference being attended by leaders from several nations and UN representatives in the Capital, with Prime Minister Narendra Modi calling for international cooperation and shared financial platforms to boost a sector the country is pushing to the forefront of its economy.
In the five-day conference, which Modi inaugurated on Monday, India will focus on the need for collaboration between cooperatives for markets, global financing mechanisms, enabling start-ups and integration of cooperatives into the circular economy. In a circular economy, products and materials are reused and recycled for sustainability, according to the agenda.
The government has launched several steps to diversify businesses carried out by cooperative-based enterprises, enlarging sectors they operate in, including exports, and digitising PACS or primary agricultural cooperative societies, Union home and cooperation minister Amit Shah said on Tuesday, addressing representatives of the National Federation of State Cooperative Banks Ltd.
Since finances are crucial, healthy cooperative banks at the district and state levels are essential to drive the sector forward, Shah said. Cooperative banks across the country are critical financial institutions for access to credit and they collectively have deposits of ₹1.2 lakh crore.
Cooperatives are enterprises owned jointly by their members, where profits and losses are shared equally. India’s cooperative sector, over a century old, provides livelihood to millions, especially women, in sectors such as dairy, fisheries, finance, housing and agriculture. Amul, India’s biggest dairy brand, is a cooperative business.
“As the Prime Minister has outlined, the world has an excellent opportunity to harness the cooperative sector. There is a need for collaborative financing to pool resources so that credit can be accessed by smaller and weaker units,” an official said.
The Modi government this year launched three new multistate cooperatives to boost a variety of businesses linked to the rural sector covering organic farm produce, seeds and exports. These are the National Cooperative Exports Limited, National Co-operative Organics Limited and Bhartiya Beej Sahakari Samiti Ltd.
The country is in the processing of digitising 65,000 PACS, the building blocks of the sector. “We need to see PACS as a movement and cooperative banks have a crucial role in flagging their issues to the cooperation ministry,” Shah said at the conclave.
Cooperatives are being primed to undertake large infrastructure projects and they can create efficiency in supply chains through procurement, production and distribution, the official said.