Everything you need to know about the Ministry of Cooperation


Before the mega cabinet reshuffle, Prime Minister Narendra Modi announced the creation of a separate Union Cooperation Ministry. It was handed over to Interior Minister Amit Shah on July 7.

The Cooperation movement was taken over by the Ministry of Agriculture before obtaining its independent portfolio.

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What are the objectives of the Ministry of Cooperation?

According to a press release from the Press Information Office (PIB), the Ministry of Cooperation will strive to strengthen the cooperative movement in the country with a separate legal and political administrative framework.

“This will help deepen the cooperatives as a true people-based movement reaching the grassroots. In our country, a Cooperative economic development model is very relevant where each member works with a spirit of responsibility. The ministry will strive to streamline the “ease of doing business” processes for cooperatives and enable the development of multi-state cooperatives (MSCS), “we read.

What is the cooperative movement?

Cooperatives are organizations formed locally by stakeholders to gain collective bargaining power. The cooperative movement, which officially started with the introduction of the Cooperative Societies Act in 1904, has been observed in various sectors such as agriculture (cooperative dairies, sugar factories, spinning mills), banking and finance, etc.

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Why was a separate ministry for cooperation created?

Over the years, cooperative institutions have experienced a drying up of their funding. While the capital came from the Center, in the form of equity or working capital, only a few states like Maharashtra, Gujarat and Karnataka were able to benefit, while other states could not receive much. It had become important to restore the structure of these cooperatives.

“Various studies conducted by institutions such as the Vaikunt Mehta Cooperative Management Institute have shown that the cooperative structure has managed to thrive and leave its mark only in a handful of states like Maharashtra, Gujarat, Karnataka, etc. . Under the new ministry, the cooperative movement would gain the financial and legal power required to enter other states as well, ”Sanjiv Babar, former director general of the Maharashtra State Federation of Cooperative Sweets. mentionned at Indian express.

How do these cooperative structures influence policy?

Cooperative institutions ranging from village PACS to urban housing companies were the starting point of many current leaders. This is because these cooperatives elect their own board of directors.

Interior Minister Amit Shah was the head of the Central Cooperative Bank of the Ahmedabad District (DCCB) in Gujarat. Likewise in Maharashtra, around 150 ministers of the legislature have been in contact with the cooperative movement in the past. NCP leader Sharad Pawar and Deputy Chief Minister Ajit Pawar also started their political careers through cooperative elections.

What funding do cooperative institutions control?

According to NABARD’s annual report for 2019-2020, there are 95,238 PACS, 363 DCCB and 33 state cooperative banks across the country. State cooperative banks declared a total of Rs 6,104 crore in paid-up capital and Rs 1,35,393 crore in deposits. The paid-up capital to the DCCB was Rs 21,447 crore and the total deposit was Rs 3,78,248 crore.

While the DCCB distributed Rs 3,00,034 crore in loans, the state cooperative banks disbursed Rs 1,48,625 crore in loans in the same year.

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