HM calls for introspection by cooperative sector, assures Centre's support

Union Minister Amit Shah on Saturday said the cooperative sector in the country needs to introspect to improve its systems, and would receive full support from the Centre in this exercise. Speaking at the Sahkar Maha Conclave on Banking and Sugar Industry organised by media group Sakal, Shah also pointed to the drop in the number of cooperative sugar mills in Maharashtra and rise in the number of private ones. "As far as credit societies, urban banks and district cooperative banks are concerned, a lot needs to be done. We had a series of meetings with the Reserve Bank of India and I can say about the issues that were brought before me here on this platform, we will ensure all these institutions do not face any injustice," he said. Shah, who is the country's first Union Cooperation minister besides being the minister for Home Affairs, said he was aware of the problems plaguing these institutions, and also understands why they exist. "I will talk about Maharashtra since I am in Maharashtra. There were 202 cooperative sugar mills in Maharashtra. Today, the number is down to 101. There were 22 private sugar mills in the state, but this has now gone up to 93. They ate up our (cooperative) space. The cooperative sector needs to introspect on why this is happening," Shah said. Citing issues of trust in the backdrop of irregularities in the district cooperative banks in Kolhapur, Solapur and Nagpur, for which administrators had to be appointed, Shah said this was not a good thing. He reiterated the call for introspection after citing the example of Pune's Rupee Cooperative Bank as one of the "many urban cooperative banks that got doomed". Shah lauded Maharashtra for having quality cooperative institutions like the Vasantdada Sugar Institute. Stating that those not running cooperative sectors properly will be voted out by the members, Shah said the Union government will ensure that no institution faces any kind of injustice in keeping with Prime Minister Narendra Modi's formula of 'sahakar se samriddhi' (prosperity through cooperatives). Shah said there was a need to establish more than two lakh Primary Agricultural Credit Societies (PACS) nationwide to achieve the target of providing agri-finance worth Rs 10 lakh crore through cooperatives. "Once these two lakh PACS are formed, hurdles in the path of cooperative banks are removed, and district and state cooperative banks start functioning properly, no one can stop the growth of the cooperative sector," the minister asserted.

At present, if farmers want to export their produce, they have to rely on traders because export houses do not entertain them, he said. "The farmer has to sell to a trader, and that trader will sell it to a bigger trader, and that bigger trader will sell it to an export house, and this export house will get the maximum benefit by exporting the produce. "We are going to set up an export house on the basis of cooperative (principle) which will take farmers' produce through PACS, and after exporting the produce, the export house will transfer the revenue into farmers' accounts through PACS," Shah said. Even the smallest farmer would be able to export produce through this platform," he said. Talking about the ethanol policy, Shah said in 2015, the government set itself the target of mixing 20 percent ethanol in petrol by 2025. Its in-between target was to mix 10 percent ethanol in petrol by November 2022. "By September 2022, we achieved the target of 10 percent and as of today, it is 12 percent. This is a big achievement as the import of crude oil has gone down by 10 percent and the trade deficit has also been reduced," he said. This is benefiting sugar mills (which produce ethanol as a byproduct) and ultimately sugarcane cultivators, he said. With the 10 percent reduction in oil imports, the country saved foreign exchange worth Rs 41,500 crore, the Union minister claimed. The 10 percent mixing of ethanol with petrol reduced carbon emissions by 27 lakh tonnes, he said. On organic farming, Shah said though it is increasing, farmers who practise it are not getting desired returns.

Therefore, a decision has been taken to form a cooperative society to market organic produce, he said. The Union government has decided to computerize the existing 63,000 PACS to strengthen them, Shah informed.

"New model bylaws for PACS have been prepared and sent to the states, which provide for making PACS multi-purpose," he said.

This year's budget gives income tax relief of Rs 10,000 crore to the cooperative sugar industry, he noted.

Maharashtra is among few states which are doing well in the cooperative sector and it has contributed a lot in spreading the co-operative movement across the country, Shah said.