The Modi government is set for a
Cabinet reshuffle. In the midst of the reshuffle, there come the news of
creation of new Ministry. The ministry is of the Department of Co-operation. The
intended objectives seems to be facilitating the growth of cooperative
societies across states and build by multi state cooperative societies. The cooperative
movement while having roots across states is confined in terms of its structure
to a single state and cannot go beyond the boundaries of the state or perhaps the
district. Amul for instance would be confined to Anand district and not go
beyond the same. The same thing would perhaps hold good for Karnataka Milk
Federation. This is true of many cooperative societies across the country. The ability
to leverage the scale and scope is constrained thanks the legislative framework
in place. If there needs to be changed to allow the successful cooperatives to
flourish, there needs to be changes in the legislative and governance
framework.
There might be questions about the
feasibility of a cooperative society in the contemporary economy. They emerged
in a certain context of the India economy and society. They represented a
certain specific form of organization that was essential at some point of time.
It was the Indian innovation to the Marxian idea of the commune ownership. It perhaps
derived inspiration from the Lenin’s practices in the Soviet Union, though they
did exist a cooperative movement already in India. It was perhaps an answer to
the British innovation at least in the Indian context of the modern firm in
textile or other industries that emphasized profit maximization. It was an
outcome of a desire to pursue collective welfare at least intended in theory. The
individual capitalist profits were supposed to be replaced by the collective
ownership and thus sharing of surplus with all the stakeholders. Maybe it was conceived
as to satisfy the labour getting the adequate rewards in line with the productivity
it has manifested.
Yet with passage of time, the
unintended consequences did manifest in ways one did not imagine .the
cooperative societies became tools of money laundering. They became vehicles
for fund mobilization for political parties. They became the breeding grounds
for future political leadership. They became a tool around which someone could maximize
their profits at the expense of someone else in the name of promoting equity. Barring
few, all cooperative societies and organizations hardly sought to serve the
need they were supposed to do. They hardly the filled the gap in building Indian
economy’s new organizational structure. The cooperative movement was to coexist
with the private sector yet it hardly gave any contribution barring an
occasional success or two. In this context, it would have been prudent to have
allowed cooperative organizations to develop into a limited liability company. Yet
however, for reasons more political more than anything else contributed to the
continuation of these organizations.
The cooperative movement is subject
to state legislation and is part of the state list. They have ensured their
dominant lobby to influence policies at the state level. They have managed to
secure political prominence that allows the parties to hold power at the
grassroots. In fact, states like Maharashtra or Gujarat have seen lot of power
influence through these organizations. Each government would attempt to seek
control of the cooperative societies and similar organizations. Many a
battlefield in local political superiority are contested in the domains of the
cooperative movement. There needs to be exertion of control in seeking to build
reforms and further consolidate the organizations to leverage scale and scope. Therefore,
there does exist merit in seeking to make these organizations go national from
local.
At the outset, it must be conceded
that politics is the reason behind their survival. There is a good case
building up to contest their continuity. Yet, the current government seems to
have opted not to confront the existing structure. It might be politically
expedient to do so. It is apparent the Modi government wants to take control of
the cooperatives. It is too lucrative to be left to the control of the states. The
power to the state capital lies through these cooperatives to a good extent and
the power to the centre lies through the state capitals to a substantial
extent. In this context, it is highly tempting that the Centre would attempt to
take over the cooperatives directly or indirectly. This is what precisely the
Centre seems to have done with the latest tinkering of the rules.
The Centre has now got into the game
of cooperatives. It might require a change from the state list to the
concurrent list. The Centre is using the camouflage of the necessity of scale
and scope to mark its entry into the movement. The real agenda is however different.
It is about controlling power in these organizations. It is about contesting
the power of the opposition ruled cooperatives, something thorn in the flesh in
states like Maharashtra etc. The ruling BJP at the centre seems determined not
allow a free run to the cooperatives. They apparently intend to bring the
Centre into play as a significant player thus seeking to disrupt the movement. They
intend without doubt to slowly bring under their ambit the cooperative movement
albeit indirectly. The feudal lords of the cooperative movement would perhaps
be compelled either to back the ruling party or facing the central wrath. The RBI
control of the cooperative banks few months ago was a first step in this
direction. The current moves seem to be a continuation of the same.
Prima facie, it goes against the
very concept of maximum governance minimum government. It is only seen as an
expansion of the government. However, it seems the government would have to be
pragmatic when it comes to achieving its objectives. The primary objective
would be the control of the institutions something they would not let go. This seems
to have ruled the basis for decision making in terms of creating new ministry
for the cooperation. The rest is alibi or maybe to be charitable the
commentary.
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