Data Focus

Why Maharashtra’s co-op sector is worried about Centre’s new Ministry?

Radheshyam Jadhav Pune | Updated on July 21, 2021

Move seen as BJP’s bid to make inroads into a sector that was traditionally dominated by Congress, NCP

The Centre’s decision to set up a Ministry of Co-operation to be headed by Home Minister Amit Shah has stirred Maharashtra’s co-operative sector.

Co-operative barons in the State have also objected to the recent amendments in the Banking Regulation Act to enhance RBI’s regulatory powers.

Data available with the State government show what is at stake and why the Congress-Nationalist Congress Party (NCP) alliance and the BJP have locked horns to control Maharashtra’s co-operative sector.

Rural economy

With ₹87,998 crore of deposits and working capital of ₹1,10, 501 crore, the District Central Co-operative Banks (DCC) in Maharashtra are the pivot of the rural economy. At the helm of the three-tier co-operative credit structure in the State is Maharashtra State Co-operative Bank (MSCB). It has deposits of ₹20,849 crore and working capital of ₹33,454 and controls 31 DCCs which, in turn, provide finance to 20,744 Primary Agricultural Credit Societies (PACS). The PACS have a working capital of ₹20,000 crore and provide agricultural credit mainly for seasonal farm operations.

Maharashtra has a huge network of 2.13 lakh co-operative societies, of which about 52 per cent are co-operative housing societies with working capital of ₹3,97,466 crore and deposits of ₹2,10,404 crore. Of the total sugar factories in India, a maximum 33 per cent are located in the State and 21 per cent in Uttar Pradesh. The co-operative marketing societies in the State have a share capital of ₹93,000 crore.

Lifeline of politics

During 2020-21, the annual target for agriculture and allied activities sector in annual credit plan was ₹93,626 crore and up to December, crop loans worth ₹40,515 crore were disbursed through financial institutions.

More than 50 per cent of the State population depends on agriculture and allied sector for livelihood. Control over co-operative institutions essentially means control over the rural economy of the State.

State co-operatives are the lifeline of Maharashtra’s politics. Traditionally, the Congress and, in the last two decades, Sharad Pawar’s Nationalist Congress Party (NCP), have dominated the co-operative sector in the State. Co-operative societies, non-agricultural co-operative societies, dairy co-operative and sugar mills have helped co-operative barons control financial resources and, consequently, vote bank.

Not surprisingly, a cursory look at the Maharashtra politicos will show that majority of them have fuelled their political ambitions through co-operative sector.

The co-operative movement, which was once mainly confined to agricultural credit, extended to finance, agro-processing, marketing, housing, dairy, storage, textile, fisheries and various other industries. Recently, the BJP has made inroads into the co-operative sector and with support from the Centre is trying to lock horns with the NCP-Congress leaders to take over State co-operatives. State BJP leaders have alleged massive corruption in the sector and are seeking the Centre’s intervention.

With the new Ministry and Amit Shah as its head, the Maharashtra co-operative sector might be on a roller-coaster. It might also have an impact on political realignment in the State, taking BJP closer to the power corridors in Maharashtra.

 

 

Published on July 20, 2021

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