Governance

Union Home and Cooperation Minister Amit Shah announced that the Centre has decided to amend the Multi State Cooperative Societies (MSCS) Act, 2002 to “plug the loopholes in the Act”.

·        Cooperatives are a state subject, however there are several societies like those for sugar and milk, banks, milk unions etc whose members and areas of operation are spread across over one state.

·        The Multi State Cooperative Societies (MSCS) Act, 2002 was passed to control such cooperatives.

·        They draw their membership from each states, and that they are therefore registered under the MSCS Act.

·        Their board of administrators has representation from all states they operate in.

·        Administrative and financial management of those societies is with the central registrar, with the law creating it clear that no state government official will wield any control on them.

·        Maharashtra has the highest variety at 567, followed by uttar pradesh (147) and new delhi (133).

·        Credit societies represent the bulk of registered societies at 610, followed by agrobased ones (which include sugar mills, spinning mills etc) at 244.

·        There are ninety six multistate cooperative dairies and sixty six multistate cooperative banks.

·        The board of administrators has management of all finances and administration. For expenditure higher than a certain level, the annual general body meeting of the society has got to be called.

·        The annual report of those societies has to be submitted either on-line or offline to the central registrar before Sept each year.

·        For state-registered societies, monetary and administrative management rests with state registrars who exercise it through district- and tehsil-level officers.

·        Issues with the Act – whereas the system for state-registered societies includes checks and balances at multiple layers to make sure transparency within the method, these layers dont exist within the case of multistate societies.

·        Unlike state cooperatives, that got to submit multiple reports to the state registrar, multistate cooperatives neednt.

·        The central registrar will only permit inspection of the societies under special conditions — a written request has to be sent to the workplace of the registrar by not less than one-third of the members of the board, or not but one-fifth of the amount of members of the society.

·        Inspections will happen only when prior intimation to societies.

·        The on-ground infrastructure for central registrar is thin — there arent any officers or offices at state level, with most work being carried out either on-line or through correspondence.

·        For members of the societies, the only workplace wherever theyll seek justice is in delhi, with state authorities expressing their inability to try to to something over forwarding their complaints to the central registrar.

·        There are instances across the country once credit societies have launched ponzi schemes taking advantage of those loopholes.