Major Reforms in Co-operative Sector in Maharashtra for fulfilling the objectives of the National Policy by Adv. R. P. Rathod.

The State Cabinet on Dt. 30th January 2013 approved several reforms in the Co-operative Sector but diluted it to suit the present system. All States in India are required to implement by February 14th the 97th Constitutional amendment of 2012 mandated by the Centre in the Co-operative Sector. Adv. R. P. Rathod states that “It is expected that these new amendments would come into force latest by February 16, once an ordinance is promulgated after the cabinet passes the minutes of the meeting and it gets notified in the Official Gazette.”

He further adds that the Govt. passed major amendments that were proposed in the Maharashtra Co-operative Societies Act, 1960 to bring it in tune with the approved 97th constitutional amendment of 2012, which aims at promoting “Voluntary formation, autonomous functioning, democratic control, and professional management” of Co-operative bodies.

However Adv. R. P. Rathod., cautions that the 97th Constitutional amendment, which is aimed at bringing autonomy and transparency in the Co-operative Sector, could prove to be problematic for the 80,000 Co-operative Housing Societies in the State of Maharashtra, he points out that most of them are in Mumbai and Thane Division. He further adds that some of these amendments are likely to add the financial burden on the Co-operative Housing Societies, which ultimately will go from the pockets of the General Public.

 Adv. R. P. Rathod Says the law that aims to usher in autonomy and transparency into the Co-operative Sector took almost 11 years in the making; the last reforms were implemented in the year 2002. On February 15, these new amendments will become binding on all Co-operatives in the State of Maharashtra. The decision was finally taken following initial protests by Congress and NCP leaders. NCP, which has a monopoly in District Co-operative banks & Sugar factories, and so did not wanted to disturb the present system till the 2014 elections.

Instead of a people’s movement, the Co-operative Sector in the State has become a political movement. Take case of the apex Maharashtra State Co-operative Bank Ltd or Sugar Co-operatives, most have run into trouble over the last decade just because of gross misuse of funds and violation of norms. The State Govt. has given a whopping amount of Rs. 17,320 crore to the Sugar co-operatives and other co-operative bodies controlled & dominated by the politicians in power. In 2011-12, itself fresh guarantees worth Rs. 705 Crore were cleared for the Co-operative sector, including the units that have defaulted on loan payments earlier. The Congress and NCP political heavyweights, including a majority of cabinet ministers, trace their clout to the control of Co-operative Sector. Leaders across parties have stakes in Co-operative banks and mills in their region. Even such Co-operatives have invariably defaulted on loans and are still being favoured with all kinds of concessions and benefits.

Now on it would be compulsory to have “TWO LAdy on the 21 member Boards of Directors of each Co-operative Institution. The representation of the women is just to ensure greater participation of all sections in the decision-making of the Co-operatives, in consonance with directions of the Centre & Constitution of India. The said amendment also provides for inducting Professional persons in the Managing Committee, with likely interference from the Govt. Department.

Special authority to conduct Co-operative Polls, under the aegis of a newly formed Election Authority. Elections of Co-operative bodies have to be conducted by a separate election authority. Adv. R. P. Rathod clarifies that at present the elections of all specified and State funded societies are conducted by the Collector or Co-operation department. Now a team of separate election authority, led by a Commissioner, Secretary-rank acting or retired Official appointed by the governor, will be formed to conduct the elections of Co-operative Societies. However the State Cabinet has clarified that the existing elected board can complete its tenure and the new provisions will not be made applicable to all societies in the State of Maharashtra.

Adv. R. P. Rathod throws light on some of the amendments made in the Maharashtra Co-operative Societies Act, 1960.

Salient features of the New Rules & Reforms in Co-operative Sector:

1. New election authority to be set up for Co-operative elections.

2. New additions to the criteria for disqualification of members inserted.

3. New definition of a member introduced as “Non-active members”.

4. “Non-active members” will be barred from voting and contesting in the elections of the society.

5. Members failing to attend general body meetings and who have no “active participation” will be termed as “non-active members”;

6. Post amendment the term of Managing Committee of all societies will be equal to “FIVE YEARS”, presently the Term of Managing Committee of some societies still continues to be “THREE YEARS”.

7. The maximum strength a Committee can have is capped to 21 members, presently there are no such restrictions in Co-operative Law.

8. The Managing Committee will have to Co-opt two expert members, in the committee.

9. The post in the Managing Committee of a society will have two seats reserved for “Lady Member”.

10. AGM of every society to be called on or before 30th September & accounts will have to be finalised and approved in the said meeting. At present the said deadline for finalizing accounts and holding AGM is fixed on or before 14th August every year.

11. Committee failing to comply with the said deadline could be debarred from being in the Managing Committee for a period of Five Years.

12. Members who have maintenance or service charges arrears pending at the end of a financial year will be deemed defaulters and will be classified as “Non-active members”.

13. The Scope of Section 101 of the Maharashtra Co-operative Societies Act, 1960 has been widened.

14. Recovery Officer will now be appointed from the Office of the Registrar, Co-operative Societies, who will fix a limit within which the defaulters will have to make the payment failing which their water connection will be disconnected & their premises will be attached and auctioned, for recovering the dues.

15. Co-operative Societies will have to invest funds only in ‘A’ class District Co-operative Banks, a move that could make things difficult for CHS. Adv. R. P. Rathod states that Funds of the CHS in the State are estimated to be around Rs. 1,000 Crore, most of these funds are non-performing and continue to be renewed year after year. There is likelihood that these funds belonging to General public could be potentially misused. He says that there is a past history showing many Co-operative District Banks going defunct. The Govt should re-think and give option to atleast the CHS to park their funds in Nationalised Banks, as the money in CHS essentially belongs to the middle class persons.

Adv. R. P. Rathod states that after these amendments come into effect, each category of Co-operatives will now have to amend their respective bye-laws so as to be consonance with these amended provisions.

Adv. R. P. Rathod states & concludes that the Objectives of National Policy in Co-operatives, which were announced by the Union Government are to mainly facilitate the all round development of Co-operatives in the Country. Under this New Policy, Co-operatives would be provided necessary support, encouragement and assistance to enable them to work as autonomous, self-reliant and democratically managed institutions, which will be accountable to their members.

He further adds that the Policy seeks to achieve functioning of Co-operatives based on Co-operative principles and values, reduction of regional imbalances, professionalization and greater participation of members in the management, removal or restrictive regulatory regime and development of an integrated Co-operative structure.