New national co-op policy calls for body to address financing needs

It has also called for rationalizing the process of winding up and liquidation of a cooperative where revival is not possible within a reasonable timeframe

The new national cooperative policy framed by a high-powered panel constituted by the Centre is believed to have recommended setting up an umbrella organisation under the oversight of the Reserve Bank of India and the National Bank for Agriculture and Rural Development for streamlining the credit structure and financing needs of cooperatives and collectives.

It has also called for rationalising the process of winding up and liquidation of a cooperative where revival is not possible within a reasonable timeframe, sources said.
 

The policy, being framed by the high-powered panel of experts under the chairmanship of former Union minister Suresh Prabhu, has also recommended setting up a taskforce with members representing all stakeholders.

This will bring uniformity in the legislative provisions concerning the cooperative sector and create a level-playing field for enterprises and aid in ease of doing business. It has also called for establishing a fund to assist ‘sick’ co-operatives and provide support for reviving and strengthening co-operatives and building their infrastructure.
 

The panel also called for establishing a mechanism to protect the members from business cycle risks and creating a national umbrella brand for co-operative products with traceability of products and services.
 

The policy is part of the multiple efforts by the central government to give a new thrust to the co-operative movement in 

the country. It comes after the formation of the new ministry of cooperatives with Home Minister Amit Shah as its first minister.
 

Formation of three brand new co-operatives to work on various facets of the sector that include exports, organic products, and seeds along with reviving the whole structure of the Primary Agriculture Cooperative Societies (PACS) are all part of the initiative to strengthen the cooperative movement in the country.
 

The panel also suggested enforcing governance reforms in the co-operative sector and setting up a co-operative election authority. These would ensure audit protocols and standards, strengthening financial management, transparency, and accountability.
 

It also wanted a mechanism for timely, fair, and transparent election reforms, recruitment reforms, and grievance redress and dispute resolution.
 

On urban co-operatives, the policy said the sector in urban areas is mostly service and consumer oriented, and thus, there should be mutual dependency between it and rural co-operatives to promote the sector. The report also recommended higher participation of youths in the co-operative sector, the sources said.
 

India has about 850,000 cooperative units, of which 80 per cent are non-credit cooperatives. They are involved in diverse activities such as fisheries, dairy, producer, processing, consumer, industrial, marketing, tourism, hospital, housing, transport, labour, farming, services, livestock and multipurpose co-operatives, among others.
 

An estimated 300 million people, including 130 million farmers, are directly connected to co-operatives.
 

According to the World Cooperative Monitor, as of 2022, co-operative organisations in India like Indian Farmers Fertiliser Cooperative, Krishak Bharati Cooperative, and Gujarat Co-operative Milk Marketing Federation are the top three in the agriculture sector.
 

A report by the National Co-operative Union of India said the share of housing cooperatives, in terms of percentage, stands at 

22.51 per cent, followed by dairy (22.45 per cent), labour (7.38 per cent), and others stand at (24.09 per cent).
 

Other sectors, including consumer, fisheries, textiles, handloom, handicrafts, industrial, livestock, marketing, sugar, and services are below 5 per cent each.
 

In the credit cooperative ecosystem, PACS constitutes 55.16 per cent of the total cooperatives whereas employee thrift cooperatives are 43.35 per cent and urban co-operative bodies are at 0.88 per cent.