In the recent cabinet reshuffle, Amit Shah was made the minister of cooperation i.e. a dedicated ministry for Cooperative Societies. That has set a cat among the pigeons. All corrupt perceive this step as a bigger blow than Article 370 and 35A abrogation.

Lets understand what’s a Cooperative Society?

  1. It is a society which can be formed by any number of Individuals to promote common interests. For e.g. Amul which was formed when few milkmen from Anand in Gujarat formed the society and we now see how it has grown.
  2. Cooperative societies give more bargaining power to the members as they work as a collective unit.
  3. The Part IXB of Indian constitution explains how the cooperative society will operate i.e. they should have regular elections, there should be regular audits, give reservations to women, SC, ST etc.
  4. Forming cooperative society is a fundamental right and encouraging formation of Cooperative societies is also a Directive principle of state policy as per Indian constitution.
  5. Single state Cooperative society is governed and controlled by state government and state laws, but multi-state Cooperative societies are governed by Central laws and Central Govt.

What is the problem with Cooperative societies?

  1. We have Cooperative societies in many states. For e.g. we have Sugar cooperatives in Maharashtra and UP, farmer cooperatives in Punjab and many more.
  2. Most of the cooperative societies have been politicized. For e.g. one political party in Maharashtra derives it’s strength from sugar cooperatives. Similarly, one political party in UP derives its strength from Sugar cooperatives. And many more.
  3. These political parties have tied the members to themselves and created a vote bank and formed an economic cartel and a guaranteed source of money for them.
  4. In beginning such arrangement may have helped the members, but now such an arrangement has started harming them as the political parties are not letting them grow so that they start operating outside their state or even out of India.
  5. Many Cooperative societies have established banks, such banks are hot beds of corruption. Though Modi Govt. has brought the Cooperative banks under control of RBI by amending Banking Regulation Act, 1949 and that has started cleaning the banks, but more needs to be done.
  6. In nutshell, these political parties are stifling the future growth of the societies to operate at a national and even international stage for their corrupt intentions.
  7. If the Cooperative societies go out of their states, the political control which these parties exert on the Cooperative societies will vanish.

What Amit Shah and the new ministry may do? It is tough to say what steps will be taken but my major guesses are as follows:

  1. He may make attempts free the Cooperative societies from the clutches of political parties.
  2. He may take steps to make Cooperative societies go out of their states become multi-state Cooperatives or international Cooperatives easily.
  3. He may take steps to end the deep political influence on the Cooperative societies.
  4. He may also take steps to end corruption and nepotism in Cooperative societies.


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