The curious thing about coalition governments living on a short fuse is that they earn their way into history by doing one good thing, however deplorable their track record might be. And this one thing is invariably connected with governance at the grassroots. Thus, the Morarji government earned its claim to fame through the Ashoka Mehta committee report which led to Constitution amendments relating to the panchayats and nagarpalikas. And the V P Singh government produced the Brahm Prakash committee report on co-operatives. And true to type, the Deve Gowda government has set up the Mirdha committee to report on both the law on co-operatives and the more limited but urgent question of an alternative Central Act to replace the 1984 Multi State Co-operative Societies Act. While the Mirdha committee is continuing its work on the co-operative law, a few weeks ago it submitted its recommendations in respect of the Multi-State Co-operative Societies Act.
The significant feature of the inte-rim report is perhaps, less what it specifically recommends for the new central Act on multistate co-operatives than the pointers it has about its general line of thinking in regard to its broader remit: proposals for co-operative law in general. A perusal of its recommendations is, therefore, essential for the co-operative movement because those of us involved or interested in it still have time to influence the committees thinking on broader issues.
The committee notes that the principles of co-operation, as established by the International Co-operative Alliance (ICA) are spelt out in the first schedule to the 1984 Act, but apart from recommending that these be updated, and asking for the principles to be rewritten in chronological order whatever that means. I think they mean in the same order as in the documents of the ICA! it has shied away from what is surely the key question: are these principles justiciable? It does recommend that the principles be incorporated in the body of the proposed legislation but fails to specify whether this would be preambular in nature, and therefore unenforceable, or whether these would be made the litmus test for courts to confirm or invalidate any other provision of the law, rules framed thereunder or actions taken, especially by state governments, in pursuance of the enabling provisions of the law. That is the crux of the matter.
For the abuse of the co-operative movement, primarily by ruling parties in state governments, has been effected mainly by twisting the law . Unless any provision of the law, and any action thereunder, is rendered ultra vires by the fact of transgression of first principles, a mere reiteration of ICA principles in a preambular provision or even by way of a schedule to the Act is likely to remain a dead letter. Therefore, ensuring the inviolability of the basic principles of co-operation particularly the voluntary, democratic and autonomous nature of true co-operatives must constitute the very foundation of legislation regarding them. Can this be done by legislation alone, or would there be need for constitutional stage-setting to ensure irreversibility, is the question which needs to be addressed in the final report. That answer would, of course, apply pari passu to the law on multi-state co-ops.
Second, the proposals are aimed at clipping the wings of the registrar, identified as the villain of the piece as long ago as 1915 by an ICS officer, Edward MacLagan: When we think of co-operatives in India, we do not call to mind the humanitarian and philanthropic Reiffeisen, but the mercenary registrar of the co-operative society. 80 years on, nothing has changed! It is, therefore, entirely appropriate that the committee have sought to cut the registrar to size, restricting his powers to inspection or inquiry and registration liquidation, etc (although personally, I think the etc is fraught with ominous possibilities.) They have suggested that an independent, quasi-judicial auth-ority be set up. It can be no ones case that autonomy for the co-operatives should tantamount to abnegation of responsibility. Autonomy has to be responsible autonomy. Unfortunately, in the name of enforcing accountability and responsibility, the political authority has become adept at misusing the registrar as the instrument of subversion of co-operative principles. The innovation of an authority independent of both the registrar and the state government, as well as vested with quasi-judicial powers, is a Mirdha committee recommendation of revolutionary significance. It needs to be spelt out in far greater detail in the final report. Also, the committee needs to answer the question: who will bell the cat? In other words, who will ensure that the independent authority is, indeed, independent? Would that require constitutional sanction or would it be adequate to merely write the authority into the proposed legislation?
Autonomy is breached by undue interference in elections, management and audit. The committee recommends that each co-operative hold elections according to its own bylaws, the only statutory provision being that no one continue in office beyond five years. With respect to management, many of us will feel concerned at the door to undue interference being kept ajar by the recommendation that government loans might entitle governments to foist their nominees on the management of independent, autonomous co-operatives.
The report recognises this danger and suggests that any such involvement in management might be on the basis of a MoU between the co-operative and the government (or financial institution) that has a financial stake in sound management. As any such MoU will be between unequals, I have grave reservations about this proposal. I fear it will be misused by the political authority to get back through the MoU the power of undue interference which it would lose through the proposed legislation. As regards audit, though, I find the recommendation unexceptionable: audit of a co-operative society should be conducted by a well qualified auditor appointed by the society.
I would urge readers to send in their views to Mohan Kanda, joint secretary, ministry of agriculture, Krishi Bhawan, New Delhi who can bring it to the committees attention. This is your opportunity to become an active participant in civil society.
