The Hindu Business Line : Get co-op reforms going, Nabard tells Kerala Govt

Thiruvananthapuram April 10 The Kerala Government must walk the talk and get the cooperatives reforms package going in the State, according to Mr B.S. Shekhawat, outgoing Chief General Manager at the Regional Office of the National Bank for Agricultural and Rural Development (Nabard).

Adoption of the reform package recommended by the Vaidyanathan panel would bring about true democratisation in the cooperatives and inject the much needed dose of professionalism in their administration without which they would not survive in the rapidly changing economic environment, Mr Shekhawat told newspersons here.

There is broad agreement among the Government, various stakeholders and the political class in the State about the need for reforms. At least 16 States have entered into an agreement with the Centre expressing willingness to adopt the Vaidyanathan panel prescription, which require them to grant functional and financial autonomy to the co-operatives based on some conditions.

Even West Bengal, the State's ideological counterpart, had signed along the dotted line on as late as March 5 committing itself to reforms, Mr Shekhawat said. State Governments would step aside from supervisory functions and henceforth be required to play the role of facilitators only.

REFORMS PACKAGE

Kerala stands to receive at least Rs 1,000 crore as part of the reforms package to clean up balance sheets. It has to enter into a tripartite agreement with the Centre and Nabard for purposes of implementation of the package. Nabard will be the implementing agency.

The co-operative would function just like any other bank and would be run by competitive people on professional lines. Recruitments would be done strictly on the basis of merit, backed up by a suitable promotion policy. Lateral recruitments would be rendered perfectly legal in the new scheme of things.

Mr Shekhawat expressed concern over the unhappy state of affairs in the cooperative sector. First, it has "miserably failed" to reach anywhere near the Rs 1,660-crore target it had set for itself in terms of dispensing agricultural credit during 2006-07.

This is despite the fact that the cooperatives and the regional rural banks continue to be the best delivery mechanism for agricultural credit. The co-operatives managed to achieve Rs 602 crore in disbursements, of which the sanctioned loans amounted to no more than Rs 342 crore.

Another worrisome feature is the ratio of production credit to investment credit, which continued to be heavily loaded in favour of the former (up to as much as 80 per cent) in the State.

This did not make available resources needed for development of agriculture infrastructure. Besides, production credit sanctioned did not lend itself to scrutiny throwing up questions over the manner in which the money was spent.

"Agriculture has to be a sustainable proposition for agricultural credit to be sustainable," Mr Shekhawat said. A line needed to be drawn between farm credit and farmer credit. The farmer should be made conversant with a basket of skills and services in order to reduce his dependency on agriculture. Nabard is willing to suitably tweak the non-farm sector credit services to take care of these needs.

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Get co-op reforms going, Nabard tells Kerala Govt