Gowda Ready To Amend Co-Op Societies Act

Prime Minister Deve Gowda yesterday said the United Front government was prepared to bring an ordinance to amend the Cooperative Societies Act to end political interference in cooperative institutions.

Opening the Indian Cooperative Congress here, the Prime Minister attributed the general neglect of the cooperative institutions to political factors. It is essential that nominations to the cooperative institutions must be scrapped and there should be no political interference.

I am prepared to bring an ordinance for amendment of the Cooperative Society Act to strengthen these institutions, he said and called for suggestions from economists and administrators of cooperative societies. Gowda said although there were about 3.5 lakh cooperative societies in the country, there was a need to have more credit societies. At present, there are about 92,000 credit societies.

He said the credit societies would play a major role in saving the farming community from the clutches of the money lenders.

Stating that more than 65 per cent of the countrys population depended on agriculture for its existence, Gowda called for increasing the percentage of bank loans for the priority sector.

The agriculture sector still found some bottlenecks in securing advances from the nationalised banks, he said. Although about Rs 26,000 crore is available for priority sector lending, it is not being fully disbursed.

Stating that most of the farm credit goes for the irrigated areas and supply of fertiliser, Gowda said it would be ideal if the percentage of the total priority sector lending is increased to between 25 and 30 per cent of the total lendable funds.

He said availability of these additional funds would prevent the money lender from exploiting the small and poor farmers. One of the main objectives of the cooperative movement was to make the agriculturists self-reliant, without credit constraints.

Gowda asked the National Bank for Agriculture & Rural Development (Nabard) to explore the possibility of bringing down the interest for its agriculture lending.

The rate of interest for the poor farmers should be more reasonable and there should be timely availability of the loans.

Agriculture minister Chaturanan Mishra favoured the exemption of the cooperatives from the ambit of income tax as these bodies were largely formed for the farmers welfare. He said the eighth plan did not provide much thrust on the role of the cooperatives.

Mishra wanted the cooperatives to be strengthened to meet the ninth plan target of 4.5 per cent growth in the agriculture sector. Unless productivity of the small farmers are raised, we cannot achieve the projected 7 per cent GDP growth and an increase in the agriculture outlay during the plan period.

Mishra said several cooperative institutions faced financial crunch due to the loan-waiver schemes of the previous government. Although the cooperatives had to pay for this waiver of loans, the government did not fully compensate them for this outgo, he said.