The Hindu Business Line : More freedom for co-operatives, says Manmohan

THE UPA Government will soon bring a Constitutional amendment to ensure for the cooperative societies their rights to election, autonomous management and independent professional audit, the Prime Minister, Dr Manmohan Singh, said here on Tuesday.

Announcing this at a function organised by the National Cooperative Development Corporation (NCDC) for the presentation of its biennial awards for excellence to 34 cooperative societies, Dr Singh said that the amendment would incorporate in the Constitution the three key words for the empowerment of cooperatives - `voluntary,' `democratic' and `autonomous' - along with these three rights so that no State law would be able to abrogate them.

Dr Singh said that his Government was committed to restoring full independence to cooperatives so that they work according to the spirit of the cooperative movement and serve as effective institutions for people's participation in development and equitable distribution of income.

"Undue interference on the part of Government is apt to hamper the fundamental initiative for collective endeavour and `cooperative enterprise.' Independence and autonomy have to be granted to cooperatives to enable them to evolve into efficient, professional democratic organisations. We have to ensure that no distortions of these fundamental principles are allowed to occur. I would, therefore, urge that in the interest of healthy growth and existence of cooperatives, democratic management be restored, both in their management and business affairs," the Prime Minister said.

Dr Singh also informed the gathering that a task force has already been set up to recommend an action plan for reviving rural cooperative banking institutions. The task force would also recommend an appropriate regulatory framework and measures for improving the efficiency and viability of the cooperative banking sector. Its report is expected very shortly, he said.

These steps, he said, were necessary as corporate governance and internal and external accountability were some of the weak links in the cooperative movement. Amplifying further, Dr Singh said: "In this respect, the recent sagas of failures of high profile urban co-operative banks is not exactly a shining example of governance. Never before has the need for restoring customer confidence in the cooperative sector been felt more acutely than at present."

As an advice, Dr Singh said that cooperatives "have to now devise a system of cooperative corporate governance for ensuring relevance as well as performance. In fact, the very definition of corporate governance implies conducting business in accordance with the well-being of all the stakeholders' desires that generally leads to value generation, while keeping intact the basic rules of equity and participation."

Earlier, expressing dismay at the poor state of health of cooperatives, the Agriculture Minister, Mr Sharad Pawar, said that out of 310 cooperative sugar factories, 111 were facing problems of sickness, and out of 159 spinning mills, 77 had closed and another 55 were on the verge of closure. Mr Pawar informed that a committee had been set up for revitalisation of the sugar industry to make it globally competitive and that NCDC would shortly launch a rehabilitation scheme for spinning cooperatives.

Out of the 34 cooperative societies that have won the awards for the year 2004 — the cooperative centenary year, half of them are agriculture credit, service or multi-purpose societies. The others are engaged in consumer, dairy, marketing, handloom and cold storage activities.

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More freedom for co-operatives, says Manmohan