NEWS

Centre has decided to amend the Multi State Cooperative Societies (MSCS) Act, 2002 to plug the loopholes in the Act

ACT & MULTISTATE COOPERATIVE SOCIETIES

• The Act was passed to govern cooperatives
• Cooperatives are a state subject
• There are many societies such as those for sugar and milk, banks, milk unions etc whose members and areas of operation are spread across more than one state. For example, most sugar mills along the districts on the Karnataka-Maharashtra border procure cane from both states.
• They draw their membership from both states, and they are thus registered under the MSCS Act. Their board of directors has representation from all states they operate in. Administrative and financial control of these societies is with the central registrar, with the law making it clear that no state government official can wield any control on them.

WHY DOES THE GOVERNMENT PLAN TO AMEND THE ACT

• Exclusive control of the Central registrar, who is also the Central Cooperative Commissioner has no interference of state authorities so that these societies are able to function in multiple states has created obstacles.
• While the system for state-registered societies includes checks and balances at multiple layers to ensure transparency in the process, these layers do not exist in the case of multistate societies
• Board of directors has control of all finances and administration. For expenditure above a certain level, the annual general body meeting of the society has to be called.

ISSUES WITH THE ACT

• Lack of day-to-day government control on such societies
• Unlike state cooperatives, which have to submit multiple reports to the state registrar, multistate cooperatives need not
• Central registrar can only allow inspection of the societies under special conditions — a written request has to be sent to the office of the registrar by not less than one-third of the members of the board, or not less than one-fifth of the number of members of the society.
• Inspections can happen only after prior intimation to societies.
• The on-ground infrastructure for central registrar is thin — there are no officers or offices at state level, with most work being carried out either online or through correspondence. For members of the societies, the only office where they can seek justice is in Delhi, with state authorities expressing their inability to do anything more than forwarding their complaints to the central registrar.