Maharashtra Plans Legislation To Boost Co-Operative Institutions

The Maharashtra government is actively considering passing a legislation aimed at making the co-operative movement in the state self-reliant, vibrant and autonomous.

This move by the state comes close on the heels of the Centre announcing the National Co-operative Policy a couple of months earlier.

The co-operative movement, which includes co-operative societies and banks, has been the pivot for the socio-economic development of different states in the country and it is only natural for the state to pursue the issue of passing a legislation that gives the players involved the requisite functional autonomy, sources said.

Though a consensus on the issue is eluding the major partners of the ruling coalition, sources pointed out that it is imperative that the issue is hammered out in the interest of the movement.

 

Co-operative entities in the country have a unique character in that small people are the stake holders and they carry out economic activity by mobilising resources from areas where no mainstream banking facility is available.

They met the credit needs of the farm, trading and other segments by channelising the resources so mobilised.

"The state government is seized of the matter and something concrete should emerge soon," sources said.

"The movement, which has been assiduously nurtured over the last five decades, needs to be revitalised as the misdeeds of a couple of co-operative banks in Gujarat recently has shaken the public confidence. The co-operatives cannot be condemned due to misdeeds of a few," sources explained.

They said multiplicity of regulators has not been conducive for cooperatives' healthy growth.

The Madhavpura Mercantile Co-operative Bank episode has cast a long shadow on the co-operative movement in the country. Against the bank's deposits of Rs 1,200 crore, its exposure to the capital markets via extending bank guarantees and other facilities to the stock brokers amounted to almost Rs 1,100 crore. This led to the movement as a whole getting a bad name.

The Co-operative Act granting self-reliance to the co-operative entities has already been passed, among others, by Andhra Pradesh, Madhya Pradesh, Karnataka, Bihar and Jammu & Kashmir.