Introduction of Constitutional Amendment Act: A Historical Perspective

T. Paranjothi*R. Elangovan**

IntroductionThe subject of Constitutional Amendment has been the topic of discussion right from 1996. There was a statement from the then Minister for Agriculture and Cooperation Dr. Jaganath Mishra that the Constitution would be amended to preserve the democratic character of cooperatives. Many political parties also mentioned about cooperatives in their election manifesto The National Cooperative Union of India was pressing for the Constitutional Amendment and UPA-I Government based on the observation of High Powered Committee headed by Shri Shivajirao Patil took up this issue. The Conference of the State Minister of Cooperation held in December 2004 endorsed the views to incorporate certain provisions in the Constitution to provide protection to cooperatives and to insulate them from avoidable political and bureaucratic interference.

Accordingly, the Constitution (One Hundred and Sixth Amendment) Bill, 2006 was introduced in Fourteenth Lok Sabha on 22.5.2006. On reference from the Honorable Speaker, the Parliamentary Standing Committee on Agriculture had also examined the Bill. However, the Bill could not be considered by the House as it lapsed. The Constitutional (One Hundred and Eleventh Amendment Bill) was introduced in Lok Sabha on November 30 , 2009 and referred to the Standing Committee.

The Constitutional Amendment after discussion by the Standing Committee on Agriculture and considering the views of Department of Agriculture and Cooperation was introduced in the Parliament and passed by the Lok Sabha and Rajya Sabha respectively on 22nd and 28th

December 2011. The amendment received the assent of the President of India on 12th January 2012 and a Gazette notification was issued on 13th

January 2012. The Central Government also issued the official notification and the same came into force w.e.f. 15th February 2012 making it binding on the State Government to introduce the amendment (Extra ordinary Part II Section 3 Sub section (ii) No. 234 dated 13th February 2012, S.O. No. 265 E of the Ministry of Agriculture, Department of Agriculture and Cooperation, Government of India).

--------------------------------------------------------------------------------------------*Professor and Head, Centre for Research and Publications, Vaikunth Mehta National Institute of Cooperative Management, Pune 411 007, email: tparanjothi@vamnicom.gov.in

**Associate Professor, Centre for Management Development Programme, Vaikunth Mehta National Institute of Cooperative Management, Pune 411 007, email:relangovan@vamnicom.gov.in

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The State Governments of Bihar, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh and Uttar Pradesh have amended their Act and the same is approved by the Assembly. The states of Maharashtra and Tamil Nadu have brought in Ordinance. The legislative changes have taken place due to the ILO recommendations 193.

The article proposes to discuss about Constitutional Amendment from a historical perspective. The article is divided into six sections. The first section outlines the features of the Constitutional Amendment Act 2011. The second section brings out the election manifesto of political parties and also views of the Coopertive Development Foundation, Hyderabad. The third Section discusses the ILO Resolution 193. The fourth section presents the recommendations of the Standing Committee on Agriculture, the views of Department of Agriculture and Cooperation and the observations of Administrative Reforms Commission. Section five presents the Loksabha debate and the reply of Honourable Minister of Agriculture. Section six presents the Rajya Saba debate and reply of Honourable Minister of Agriculture.

SECTION - IThe main features of the Constitution (97th amendment) Act 2011 are as follows:

1. Citizens now have the fundamental right to form co-operative societies, as the words or co-operative societies.

2. The State shall endeavour to promote voluntary formation, autonomous functioning, democratic control and professional management of cooperative societies.

3. The Legislature of a State may, by law, make provisions with respect to the incorporation, regulation and winding up of cooperative societies based on the principles of voluntary formation, democratic member control, member economic participation and autonomous functioning.

4. The maximum size of the Board shall not exceed 21 members and its term (as also of the Office-Bearers) 5 years. SC/ST members and Women members will have 1 and 2 seats reserved for them respectively on the Board. The Board is allowed to fill casual vacancies by nomination from the particular category of members if its term is less than half of its original term. Co-option of 2 persons to be allowed on the Board, who are having experience in the fields of banking, management, finance or specialization in any other field

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relating to the objects and activities undertaken by the society. Such co-opted members shall not have vote in the election of office-bearers nor are they eligible to become office-bearers. Functional Directors of the co-operative society shall also be the members of the Board. Co-opted members and Functional Directors shall be in addition to the maximum size of 21.

5. The election of a board shall be conducted before the expiry of the term of the board so as to ensure that the newly elected members of the board assume office immediately on the expiry of the office of members of the outgoing board.

6. The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of all elections to a cooperative society shall vest in such an authority or body, as may be provided by the Legislature of a State, by law.

7. No board shall be superseded or kept under suspension for a period exceeding six months. In case of supersession of a board, the administrator appointed to manage the affairs of such cooperative society shall arrange for conduct of elections within the period specified and handover the management to the elected board.

8. The audit of accounts of a society shall be completed within 6 months from the close of the financial year. The state law shall specify the minimum qualification and experience required by an auditor or an auditing firm. The auditor shall be appointed by the general body of the society from out of the list approved by the Government/Authority appointed by Government. The audit report of the Apex Society shall be placed before the State Legislature.

9. The Annual General Body Meeting shall be convened within 6 months from the date of close of financial year.

10. Members shall have access to accounts, books and documents kept by the society as part of its regular transactions. Further, the state laws shall specify the minimum requirement of attending meetings as also the minimum level of services the members should attend/avail from the society.

11. Make provisions to ensure the participation of members in the management of the cooperative society providing minimum requirement of attending meetings by the members and utilizing the minimum level of services as may be provided in such law.

12. Provide for cooperative education and training for its members.

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SECTION -II

ELECTION MANIFESTO OF POLITICAL PARTIES

Congress-I- Usher in a new policy for cooperatives to restore their democratic

structure and autonomy of management

Bhartiya Janata PartyTo strengthen the cooperative movement the BJP will

- Free cooperatives from political interference- Prevent the intrusion of vested interests- Simplify rules and regulations governing the functioning of

cooperative societies- Make entry in pass books mandatory for all money deposits- Only those entirely dependent on agriculture will be allowed to

become members of farmers cooperative societies- Ensure free and timely elections to cooperative bodies

Janata DalAgriculture and rural development

- Export and import of agricultural commodities will be handled by marketing cooperative societies of farmers

Schedule castes and scheduled tribes Cooperative of producers among SCs/STs engaged in crafts cottage industries and collection of MFP will be encouraged

Samata PartyDecentralisation and Federalism

- Decentralisation and Federalism: We believe that a democratic co-operative movement, owned and controlled by its members, is our people’s best hope for economic and social justice. It shall be our endeavour to create the conditions for an autonomous, self reliant and democratic co-operative movement in our country. Co-operatives alone can assure remunerative price to the producer and fair price to the consumer for essential articles or commodities

They could strengthen our democratic fibre and are the most effective instruments of socio-economic transformation. Just as the 73rd and 74th Amendments have liberated Panchayati Raj and Nagarpalika Institutions, we are committed to free co-operatives from the clutches of bureaucracy; restore them to their members and strengthen co-operatives to genuinely serve all sections of our society.

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Poverty Alleviation- A powerful efficient and dedicated co-operative movement can

play purposeful and effective role in this regard.

Agriculture and Rural Economy- Co-operative agriculture will be encouraged in consultation with

those willing to participate in such an endeavour

Cooperative Development Foundation Views

The Cooperative Development Foundation, Hyderabad (1996) vehemently opposed the Constitutional Amendment for the following reasons:

- State Cooperative laws do undermine the democratic nature of cooperatives, but the solution does not lie in dealing with the managing aspects of any form of business (cooperative in this instance), in the Constitution of India. When the desire is that cooperative law should not contain what the byelaws of a cooperative should contain, the question of having such matters included in the Constitution simply does not arise.

- State cooperative laws also undermine the right and responsibility of the general body of a cooperative to appoint auditors, and again, the solution can hardly lie in shifting that right and responsibility from the Registrar of Cooperatives to an independent body set up under the Constitution.

- The setting up of an independent body for the conduct of elections to cooperatives, and again for the audit of the accounts of cooperatives, through a Constitutional amendment, will mean an affirmation of the false image deliberately protected since independence, that cooperatives are part of State.

- The proposal to set up a fund to meet the cost of audit and election commission makes it abundantly clear that the whole exercise is one, aimed at ensuring that government officials whose departments are starved for want of funds and because of strength far in excess of sanctioned strength, can be rehabilitated in the commissions with cooperatives footing the bill. The protection to be offered will further ensure that the non-performance or mal-performance that they are accustomed to, continues to be fully protected.

- The proposal to amend the Constitution of India addresses none of these concerns – it simply ensures that in this age of liberalisation, cooperators will continue to feel distanced from their institutions, and that they will continue to be captive clients

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of the department of cooperation in their new avatar, meeting their costs, ensuring their livelihoods, carrying on their shoulders the ominous burden of subsidizing the government.

- The proposal must be rejected outright.

SECTION -III

ILO RESOLUTION 193

International Agencies and Coopertive DevelopmentThe role of international communities and agencies in promoting, nurturing, developing and monitoring the progress of coopertives is phenomenal. The international agencies like United Nations Organisation (UN), Food and Agricultural Organisations (FAO) and International Labour Organisations (ILO) all of them have played a significant role in developing and spearheading the causes of the movement and to take the cooperative movement to a new height. The declaration by UN, the year 2012 as International Year of Cooperatives with the theme of 'Cooperative Enterprise Build the Better World' signifies the importance attached by these international agencies.

Role of ILO and Cooperatives ILO plays a crucial role in the protecting the interest of the working class, looks upon cooperatives as a potential tool in the developing the living standards of the people by the public and private sectors. Cooperatives provided on employment to over 100 million jobs and they are the torch bearer of ILO's Global Employment Agenda and contribute to promoting decent work.

ILO activities are guided by the international standard on cooperatives, the ILO Recommendations on the Promotion of Cooperatives, 2002 (R.193). Its Cooperative Branch (EMP/COOP) serves ILO constitutents and cooperative organisations in four priority areas:

- Raising public awareness on cooperatives through evidence based advocacy and sensitisation to cooperative values and principles.

- Ensuring the competitiveness of cooperatives by developing tailored tools to cooperative stakeholders including management training, audit manuals and assistance programmes.

- Promoting the inclusion of teaching of cooperative principles and practices at all levels of the national education and training systems.

- Providing advice on cooperative policy and cooperative law, including participatory policy and law making and the impact on cooperatives of taxation policies, labour law, accounting standards, and competition law among others.

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Partnerships for cooperative promotionThe ILO works in partnership with the International Cooperative Alliance (ICA) the representative world body of cooperatives and is a member of the committee for the Promotion and Advancement of Cooperatives (COPAC), an interagency committee which promotes sustainable cooperative development. It also collaborates with cooperative development agencies and training institutions.

Genesis of ILO Resolution 193- Some Stylized FactsAt its 74th Session (March 1999) the Governing Body of the International Labour Office decided to place on the agenda of the 89th Session (2001) of the International Labour Conference the question of the promotion of cooperatives.

In accordance with article 39 of the Standing Orders of the Conference, which deals with the preliminary stages of the double - discussion procedure, the office drew up a preliminary report intended to serve as a basis for the first discussion of the question. The report contains an introduction to the question, an examination of the changing environment of cooperatives in developing, transition and industrialized countries and an analysis of the prerequisites for success in the promtion of cooperatives based on the law and practice in various countries. The report was accompanied by a questionnaire and was communicated to the governments of member States of the ILO, which were invited to send their replies so as to reach the Office not later than 30 June 2000. Ninety Five member states replied to the report and around 60 member states stated that the reply is prepared after due consultation with the employees' and workers organisations.

The ILO had an earlier Recommendation, number 127, adopted in 1966. Since the time of the adoption of Recommendation No. 127, Cooperatives (Developing Countries), political, economic and social changes have affected the situation of cooperatives throughout the world.

As a result, in March 1999, the ILO's Governing Body decided that a new universal standard could help enable cooperatives to develop more fully their self-help potential, placing them in a better position to meet current socio-economic problems such as unemployment and social exclusion, and help them compete in a global market place. At about the same time, the United Nations began debating new guidelines on cooperatives, which were adopted by the General Assembly on 19th December 2001. The ILO Governing Body's decision to revise Recommendation No. 127 was based on the following:

The focus of Recommendation No. 127 was limited to developing countries while new roles for cooperatives in both the industrialized and the former communist countries had emerged in the last thirty years.

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Promoting Cooperatives1

- Recommendation No. 127 mirrored the development concerns of the 1960s where cooperatives were seen primarily as tools in the hands of the government. The recommendation thus overemphasised the role of the government in cooperative development and underestimated the autonomous character of cooperatives. In accordance with the reformulated universally recognised cooperative principles, the Governing Body considered that cooperatives should be regarded primarily as a means for their members to achieve their common economic and social goals. Their autonomy as a form of private enterprise guided by ethics and principles should be upheld.

- In many countries, political, economic and social changes have put pressure on government to limit its involvement in economic and social affairs. The State's role is increasingly limited to that of providing the political, legal and administrative framework for the development of private organisations including cooperatives. Recommendation No. 127 had yet to take account of these developments.

- In industrialised countries, new forms of cooperatives and new cooperative enterprise structures had emerged to take advantage of the challenges and opportunities opened up by globalisation and technological changes. Heightened competition from other forms of business enterprises had also necessiatated these changes. These facts required recognition in a new ILO standard on cooperatives.

- In 1995, the International Cooperative Alliance had held its Centenary Assembly and adopted a new Statement on the Cooperative Identity. This clearly redefined cooperatives as autonomous, member led enterprises, with a distinctive set of values and principles. An extract from the Statement forms part of the text of Recommendation 193. so to assist countries in developing a new legal and policy framework for cooperatives, Recommendations 193 was adopted.

It is the only international policy framework on cooperatives, and has been adopted by a tripartite organisation bringing together employers, workers and governments.

It has come at an opportune time. The idea -the myth some would say - that the free market, company driven model could solve economic problems has been seen to be untrue. A different model of enterprise, business driven and democratically controlled, can offer a different way.

ILO Resolution 193

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Cooperatives are also one of the most 'natural' phenomena in the world. After all we have more than eight hundred million members.But cooperatives have become invisible in many countries and in much development theory. They are too often dismissed as a relict from the past. Our model of solidarity combined with enterprise is too often ignored by policy makers.

Recent years have seen a growing realisation that cooperatives have a great deal to offer, not only for our members, customers and employees, but also for society as a whole. An expression of that renewed interest in cooperatives is the ILO's Promotion of Cooperatives Recommendation 2002 (No. 193).

The ICA and its membrs have worked together with ILO constituents in order to incorporate the cooperative view into the text of the instrument. As Mr. Juan Somavia, the ILO's Director General, has pointed out that the Recommendation "is the only international policy framework for cooperative development that has the added value of being adopted by governments, employers' organisation and trade unions, and supported by relevant civil society organisations".

The definition and scope of the Resolution 193 states that

"Measures should be adopted to promote the potential of cooperatives in all countries, irrespective of their level of developemnt, in order to assist them and their membreship to:

(a) Create and develop income generating activities and sustainable decent employment.

(b) Develop human resource capacities and knowledge of the values, advantages and benefits of the cooperative movement through education and training.

(c) Develop their business potential, including entrepreneurial and managerial capacities

(d) Strengthen their competitiveness as well as gain access to markets and to institutional finance

(e) Increase savings and investment(f) Improve social and economic well-being, taking into account the

need eliminate all forms of discrimination(g) Contribute to sustainable human development(h) Establish and expand a viable and dynamic distinctive sector of the

economy, which includes cooperatives, that responds to the social and economic needs of the community

Resolution 193 provides a framework for governments to develop the laws, administrative systems and policies that can enable cooperatives to flourish. The ICA played a central role in developing the Recommendation. ICA members were present in all three constituencies

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at the International Labour Conferene that adopted the Recommendation - governments, employers and workers.

Recommendation 193 is not an end in itself. It must be translated into action. We need to ensure both that national poverty reduction strategies promote cooperatives and that we develop the mechanisms to enable people to organise themselves and bring the power of cooperation into their communities.

Importance of the Resolution 193One may think how this resolution will help the nation in bringing a change in the outlook of cooperatives? When the recommendation is put into practice one can see a different face of cooperatives. The Report of the Director General ILO 2003 states that 'the core tools cooperatives need in order to flourish are advice on capacity building, entrepreneurship development, leadership training, market research, accessing loan finance and grant aid, inter cooperative networking, and federation building. For such grass-roots support to work effectively, cooperatives need a secured legal framework governing their status'.

Much cooperative legislation dates from the colonial era, the post-colonial period, when many governments supported cooperatives, but often did not allow them the autonomy which is essential for them to thrive. In former centrally planned economies, where the government in reality controlled cooperatives, laws passed in the 1990s, in the immediate post-communist period, may be inappropriate.

Key points of the Resolution- Cooperatives operate in all sectors and all countries

(Recommendation 127 was limited to developing countries)- Cooperatives are based on principles and values- The ICA statement of cooperative identity which states those

values and principles is accepted as the basic definition of a cooperative

- Cooperatives should enjoy equal treatment with other types of enterprise

- Governments should create an enabling environment and facilitate access to support services

- Employers' and workers' organisations should promote cooperatives

- Cooperatives should cooperate internationally

The role of Government- To provide a conducive policy and legal environment- To grant support when justified by special circumstances- To develop partnerships with cooperatives where appropriate

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The role of employers' organisation- To extend membership and provision of services to cooperatives

wishing to join.

The role of workers' organisation- To assist cooperative employees to join trade unions- To assist trade union members to establish cooperatives- To participate in setting up cooperatives to create or maintain

employment- To promote productivity, equality of opportunity and rights of

worker members- To undertake education and training

The role of cooperative organisations- To work with the social partners (employers' and workers'

organisations) to create a favourable climate for cooperative development

- To provide technical, commercial and financial support services- To promote the horizontal and vertical integration of

cooperatives- To invest in human resource development- To represent cooperatives at the international level, and

encourage international collabortion

Progression of ILO Resolution 193 in Indian contextIndian cooperatives in the recent past suffered on account of the lack of focus, loss in direction and absence of conducive legal and policy framework. Considering the effect of ILO resoulution 193 and its impact on the functioning of cooperatives it is truly god sent prasadam to cooperatives and other stakeholders. As mentioned earlier the preliminary report has been prepared before finalisation of the resolution and India being the member nation replied to the questionniare albeit the absence of discussion with the stakeholder of the resolution2.

As the recommendation of ILO is mandatory on the part of the Government of India (GoI) the GoI responded to the recommendation and suggestions, sought and also opposed some of the aspectes of the recommendation. The question is whether the Government of India is earnestly implementing the recommendation 193? What are the steps taken by Government of India in this direction? What is the plan of action of Government of India? How many cooperatives are aware of the recommendation and its implication? All these questions need to be addressed by the Government. The Government of India on its part announced the New Cooperative Policy with an assurance to empower the cooperatives and make them as an alternative institutional mechanism

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against the market force and to protect the weak. Further the Government introduced the Constitutional Amendment Act 2011. However according to the recommendation the role of Government is much bigger and there are still a long way to go.

All the stake holders need to get involved further to make the Constitutional Amendment Act proceed in the right direction. Cooperatives being a state subject it would be advisable for the State Governments to discuss the ILO Resolution and place the same before the Assembly and debate it in a comprehensive manner so that the fruits are seen.

SECTION -IV

STANDING COMMITTEE ON AGRICULTURE

The Standing Committee on Agriculture headed by Shri Basu Deb Acharia was briefed by the representatives of the Ministry of Agriculture (Dept. of Agriculture and Cooperation) on the Bill on 12th January 2010 and they also decided to invite suggestions/views of various stake holders on the Bill through an advertisement in the media. 37 Individuals/Organisations responded and written suggestions/memorandum were received. Evidences from National Coopertive Union of India, National Agricultural Cooperative Marketing Federation of India Ltd., National Cooperative Consumer's Federation of India Ltd., Krishak Bharati Cooperative, National Federation of Urban Cooperative Banks and Credit Societies Ltd., Indian Farmers Fertiliser Cooperative Ltd., National Cooperative Development Corporation, National Cooperative Agriculture and Rural Development Banks Federation Ltd., National Federation of State Cooperative Banks Ltd, National Bank for Agriculture and Rural Development were collected. The Committee took oral evidence of the representatives of Ministry of Agriculture (Deptt. of Agriculture and Cooperation) and Ministry of Law and Justice (Legislative Department) on 5th August 2010. The Committee considered and adopted the report at their sitting held on 20th August 2010 and submitted it on 27th August 2010.

The States of Andhra Pradesh, Assam, Meghalaya, Nagaland, Tripura, West Bangal, and four Union Territory Administrations of Andaman and Nicobar, Daman and Diu, Delhi and Lakshadweep forwarded their views to the Committee.

The Standing Committee discussed in detail the suggestions/ proposals received from Experts/Organisations/Stake holders /State Governments/Union Territory Administration on various clauses of the Bill.

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The recommendations of the Standing Committee and the views of the Department of Agriculture and Cooperation (DAC) are presented below:Sl.No.

Recommendations of the committeeViews of DAC

1 Article 19(1) (c) of the Constitution says that all citizens shall have the right to form associations or unions‘. The Committee have been informed that the Department of Legal Affairs of the Ministry of Law and Justice, Government of India is of the opinion that the word associations‘ in Article 19(1) (c) of the Constitution includes the words cooperative societies also. A view has been expressed in the Committee that the word associations‘ does not include cooperatives‘. The Committee, therefore, recommends that the Government should examine whether the words cooperative societies‘ can be inserted after the word associations‘ in the aforesaid Article.

The issue has been examined in consultation with Ministry of Law and Justice. The Department is of the view that amendment to Article 19(1)(c) is not required as the word association‘ includes cooperative societies. Further, a new clause 43B is proposed to include the provision of cooperative societies in Directive Principles of State Policy. Therefore, this recommendation of the Committee could not be accepted.

2 The Committee further recommended that a new Article 43B on Empowerment of Cooperatives may be added in Part – IV of the Constitution that contains Directive Principles of State Policy, which may read as under: ―43B Empowerment of Cooperatives: The state shall endeavour to promote voluntary formation, autonomous functioning, democratic control and professional management of the cooperatives.

Accepting the recommendation of the Committee, it is proposed to add the following provision: ―43B Promotion of Cooperative Societies: The state shall endeavour to promote voluntary formation, autonomous functioning, democratic control and professional management of cooperative societies.

3 Cooperative Societies is a State subject under Entry 32 of the State List of Seventh Schedule of the Constitution. The Committee is of the firm view that the Central Government should not interfere in the day-to-day affairs of the cooperative societies.

Regarding the recommendation that the Central Government should not interfere in the day-to-day affairs of the cooperatives, it is the policy of the Central Government not to interfere in the day-to-day affairs of the cooperative societies. Nor there is any provision in the Constitution (106th Amendment) Bill, 2006 providing any power to the Central Government even for any action or directive for the governance of cooperative societies, leaving aside the interference in day-to-day

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working of the cooperatives. This recommendation is accepted.

4 The Committee is of the unanimous opinion that a comprehensive amendment to the Constitution on cooperatives is not necessary. They, therefore, recommend that The Constitution (One Hundred and Sixth Amendment)Bill 2006‘ should be converted into a comprehensive central model law for voluntary formation, autonomous functioning, democratic control and professional management of the cooperatives with certain incentives and disincentives to the State that implement or not implement the model law. The States can enact their own laws on the subject, however, State Laws should be compatible with the Central Model Law.

The Committee‘s view is that a comprehensive amendment to the Constitution is not necessary and has recommended to convert the Bill into a comprehensive Central model law. During the discussion in the meetings of the Committee as well while replying to the Points for Discussion, the Department has made it clear that the said model law will not serve the purpose. This is mainly on following grounds:- (a) Any such model law would be only advisory in nature and it is for the State Governments to follow the suit or not. In fact, it can not be termed as ‗Central model law‘. The recommendations of the ‗Model Cooperatives Act‘ as recommended by Choudhury Brahm Perkash Committee are already there but the states are not adopting them in their State Acts.

(b) The basic aim to bring this Constitution Amendment Bill is to provide for certain provisions in the Constitution regarding the conduct of elections, audit, tenure and size of the board etc. which are considered basic to the democratic and professional management of cooperatives and being the constitutional provision, these will be mandatory to be conformed in the State Legislations.

(c) As the Cooperative Societies is a State Subject, Central Government has no legislative jurisdiction to enact such a model law. If such a model law is prepared by the Central Government as advisory to the States, the recommendation of the Committee that the state law should be compatible with the Central model law will not be implementable.

Due to aforementioned reasons, this recommendation of the Committee could not be accepted.

5 The Committee recommended that no Regarding restriction on holding 14

person should be allowed to become the office bearer of the cooperative society for more than two consecutive terms. However, he will again be eligible to contest the elections after a gap of full one term.

office for more than two consecutive terms the Multi-State Co-operative Societies Act has a similar provision prohibiting Chairman or President of Multi-State Cooperative Society to hold such office for more than two consecutive terms. However, the High Power Committee while giving its interim report on amendments to MSCS Act has recommended that this restriction should be removed. There are both pros and cons on this issue. While viewing the concept of democratic member control over the cooperatives, it can be said that it is for the members to decide that for how long a member holds a certain office. On the other, when this provision was introduced, it was with the basic intention to prevent the vested interests from holding an office of cooperative society for a longer period. However, it would be advisable that this issue may be left to the State Legislature and need not to provide in the Bill. Otherwise also no provision has been provided in the Bill regarding disqualifications or any prohibitory provision for being chosen as a member of the board or its office bearer. Therefore, this recommendation of the Committee could not be accepted.

6 The Committee noted that Clause 243ZJ specifies that the maximum number of Directors shall not exceed twenty-one except in the case of a State level cooperative society. It has been observed that in many cases there are very large boards and it is very difficult to arrive at reasonable decision. The Committee, therefore, recommended that the maximum number of directors including functional directors should be restricted to twenty-one for all cooperatives irrespective of their sizes. Hence, the words except in case of a State Level cooperative society‘ should be deleted from the proviso to Clause 243ZJ(1).

This recommendation of the Committee has been accepted to keep the maximum number of directors as twenty-one for all the cooperative societies. However, the functional Directors would be in addition to this limit, to ensure that adequate number of elected Directors are there on the Board.

7 The Committee recommend that in the second proviso to the Clause 243ZJ(3) for the words Vice-Chairman or Vice-President, Chairman or President of the board, the words office bearer of the board‘ may be substituted.

Clause 243ZJ(3) provide that the co-opted members shall not cast vote in the election of the Chairman or President, Vice-Chairman or Vice-President. Clause 243 ZH(e) defines the words ‗office bearers‘ means a

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President, Vice-President, Chairperson, Vice-Chairperson, Secretary or Treasurer of a cooperative society and includes any other person to be elected by the cooperative society. This recommendation of the Committee is accepted.

8 The Committee feel that though the cooperative societies are not part of local governance like panchyati raj institutions and municipalities and should be allowed to conduct their own elections, however, they are of the opinion that major ill of cooperative sector is their election process. They, therefore, recommend that the matter should be further examined so as to have free, fair, impartial and timely elections of the cooperative societies conducted by the State Election Commission or any other appropriate independent body.

Under the Multi-State Co-operative Societies Act, the responsibility to conduct the election is that of the board of directors. To make the cooperatives member driven organizations the concept of conduct of election by a cooperative itself conforming to principle of democratic management. However, in practice, as observed by the Committee the election process is a major ill of the cooperative sector. The elections are not held regularly or the election process is vitiated for one reason or another. Moreover, the magnitude of the problem has to be examined in view of the large spread of primary cooperative societies in the states. Most of these societies are financially weak and many of them even may not bear the expenses if the elections are held by the State Election Commission on pattern of the panchayat raj institution. It is, therefore, proposed that accepting the recommendation of the Committee elections may be held by an authority as may be provided by the State Legislature in law.

9 The Committee note that in the Bill it is stated that the board of cooperative societies shall not be superseded where there is no government shareholding or loan or financial assistance or any guarantee by the Government‘. The Committee note that the shareholding by the Government has not been qualified and even if the Government have one rupee as shareholding, it will have the right to supersede the board of the cooperative society. These unfettered powers to Government as proposed in the Bill will affect the autonomy of the Cooperatives adversely. The Committee are of the opinion that the board of cooperative society should not be superseded where

The Multi-State Co-operative Societies Act, 2002 provide for supersession of a multi state society only in the case where Government equity is not less than 51%. The existing provision in clause 243 ZL was proposed keeping in view the overall spread of cooperative societies in the country, the stake of the State Governments by way of share holding, loans, government guarantee, etc. In case of Multi-State Cooperative Societies Act, there are very few multi-state cooperative societies where the Government equity is there. Otherwise also safeguards have been provided in this clause to prevent misuse of the

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government shareholding is less than 51 per cent.

provision by the Government such as; maximum period of supersession not exceeding six months (one year in case of cooperative banks), responsibility of the administrator to arrange for the elections of the board within this period and supersession of board only on tangible grounds. Therefore, this recommendation of the Committee could not be accepted.

10 The Committee are of the opinion that there is a need to set up Cooperative Members Grievances Redressal Forum‘ to decide all types of disputes arising in respect of constitution, business, management, or any other activity of the cooperative society. This may deliver cheap and quick justice to the members of the cooperatives.

After careful examination of the recommendation of the Committee, this Department is of the view that there are already provisions in the State Cooperative Laws providing for mechanism for settlement of disputes etc. Further, it will also add to the multi-layer mechanism already provided in the State Acts for the settlement of disputes, inspection/inquiry etc. Moreover, if these provisions are added in the Bill, it would be touching the governance of cooperatives, which is not the intention of the Bill and therefore, should be left to the wisdom of the State Legislature. Therefore, this recommendation of the Committee could not be accepted.

11 The Committee observed that the spirit of an independent audit may be diluted if the cooperative society being audited has a hand in the choice and appointment of its auditors. There may be chances that although officially the general body will appoint the auditors, it is the Board of Directors of the concerned cooperative society, whose choice will actually prevail to the detriment of auditing ethics, given the reality that most of the members of the cooperative society are neither deeply involved nor have the time and information required to make the best choice. The independent audit can be ensured only if audit is carried out by the auditor from the government approved panel of auditors / audit firms or through a separate government organization say for example Directorate of Audit. The Committee are of the opinion that the Director of Cooperative Audit should be made answerable to the State Legislature.

The Committee has recommended that in order to ensure independent and impartial audit, the auditor should be appointed from the Government approved panel or through a separate Government organization say Directorate of Audit. Accepting the recommendation of the Committee, it is proposed to provide a provision in clause 243 ZM to the effect that the auditor shall be appointed out of a panel approved by the Government/ Registrar.

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Administrative Reforms CommissionThe 9th Report of the Commission agreed with the recommendations of the Standing Committee and was of the view that the objective of the proposed amendment can be better achieved by simply adding an Article as a Directive Principle where the State could be made responsible for making laws which will ensure autonomous, democratic, member driven and professional cooperative institutions. This could be in the form of a new Article 43B as recommended by the Standing Committee.

SECTION - V

LOK SABHA DEBATEThe discussion on the motion for consideration of the Constitution (One Hundred and Eleventh Amendment Bill, 2009) was moved by Shri Sharad Pawar, Hon'ble Minister for Agriculture and Minister for Food Processing Industry on 21st December 2011. The full text of his speech is given in Annexure-I.

Shri Anto Antony (INC) participating in the debate requested the Government to amend article 243ZO (1) of the bill stating that the Division Bench of Kerala High Court has declared that the provisions of Right to Information Act is not applicable to the cooperative societies. He submitted that the aforesaid article may kindly be amended in such a way that a member shall have access to the books, information and accounts of the society with regard to that particular person and other records having general nature.

In respect of article 243ZJ (1) the representation of cooperative employees in the board is not mentioned. He was of the view that employees are the major factor behind the growth of co-operative societies excluding them from the board is injustice. Therefore, he

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requested the Government to kindly ensure the representation of employees in the board. Hence, he requested the Government to insert the following proviso in the Article 243 ZJ (1):

“Provided further that there shall be a director co-opted by the Board from among the employees of the Society to which the election is made, according to the majority decision of the employees of that society and such Director shall have all rights and privileges of an elected member except for voting in the election of the office bearers of that Board and also being elected as office bearer of that Board.”

He requested the Government to insert a new paragraph into the article 243 ZJ and suggested the following:

“Provisions can also be made for co-option in case of the absence of elected directors from the ward and in such cases the co-opted members shall not have the right to vote in any election of the co-operative society in their capacity as such member or eligible to be elected as office bearers of the Board.”

He was also of the view that the opinions of professionals should be reckoned and the words "shall be excluded" needs to changed to "shall be included". He also opined that the functional directors of cooperative society shall be included for the purpose of counting total number of directors.

In respect of state control Shri Anto Antony remarked " I also take this opportunity to express my concerns over the dilution of the control of the State Governments. Absence of State control may push cooperative societies into a competitive market of financial institutions. Cooperative societies are not profit-making institutions and, therefore, suffer a lot in a

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laissez-faire system. Hence, I would request the Government not to dilute the control of the State Government in this regard".

Shri Shailendra Kumar (SP) strongly supported the Bill. He observed that some cooperative societies are enjoying monopoly and they need to be paid special attention and curtailed accordingly. As far as primary societies are concerned he mentioned that there are no service rules and many societies do not have business plan. He suggested that measures should be taken to monitor the financial support provided.

Shri Jagdish Sharma (JDU) supported the provisions in the Bill and pleaded for model act exclusively for cooperatives. He appreciated the provision for granting autonomy to the cooperatives through this Bill.

Shri Ramashankar Rajbhar (BSP) supported the Bill. He pleaded for reservation of SC, ST, OBC, Women and minorities in the Board of management. He raised whether this Bill would facilitate and ensure trading of agricultural produce with other States. He pleaded for providing loans with very less rate of interest or even without rate of interest for trading in agriculture produce.

Smt (Dr.) Ratna De (AITC) explained the provisions in the Bill and the urgent need to strengthen the cooperatives. She commended the Standing Committee recommendations. She was of the view that not more than one person from a family should be a member of a society. The menace of the middlemen should be stopped. She was optimistic that the passage of Constitutinal Amendment Bill would bring the much needed sea change in the very face of the coopertaive movement in our country.

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Shri Anandrao Adsul (SS) supported the Constitutional Amendment Bill and remarked that restructuring the number of Board of Directors to 21 is a good amendment. He requested to include the representative of employees in the board. He supported the bill stating that "Sir, in totality, I have seen that there are very good provisions which will definitely give safety to the Central Act, viz., the Cooperatives Act. It will serve the purpose. That purpose is that those societies are of the common people and definitely the common people will get the benefit out of it".

Shri R. Thamaraiselvan (DMK) commended the amendment envisaged in the Bill. He was of the view that cooperative farming has not gained any importance in India while in many parts of the world it has been successful. He mentioned that the area under cultivation can be increased. He pleaded for increasing the reservation for S.C., S.T. and women and also supported the views of his colleagues that the employees of coopertives societies also should be given proper representation.

Shri A. Sampath [CPI (M)] suggested some amendments in the bill. In the first page, second para tenth line, I want to include the phrase “and also pay financial aid to ensure social justice”.

In para 243 ZK, line 14, it has to be “at least three months” before the expiry of the term of the board of directors. As per the present bill it would mean, that elections can be conducted even one day prior to the expiry of the term of a cooperative society. This could lead to further disputes, therefore, elections in cooperative bodies should be held at least three months prior to the term of expiry of an elected society.

In Article 243(ZH) he wanted to add clause ' suspension for a period of six months'. He proposed it should be “the total period of suspension should not exceed six months during the whole tenure of a board”.

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Regarding clause 243 ZL, “If any of the provisions of the clauses 1-5 of the above, article 343 ZL is violated Government should not interfere” must be changed. The bill clarifies that non interference by Government is warranted wherever, Government does not have share holding, or does not give grant or aid. This could mean that if affluent sections of society, constitute a cooperative body, and function as a cartel, then cooperative societies can turn to corporate houses. It can even lead to a situation, were, cooperative societies can become instruments for misappropriating the wealth of the country. In such cases, as per the bill, the Government will be made incapable of interfering or superseding. Even in the case of Charitable Societies Act Government can intervene or supersede. In the clause-by-clause consideration of the Bill Advocate A. Sampath moved the amendments which were put to vote and negatived.

Shri Rudra Madhab Ray (BJD) apprehended whether the state governments will actually devolve powers to the cooperatives because in Article 243 (G) of Part IX, it has been clearly mentioned that subject to the provisions of this Constitution, Legislature of a State may, by law, endow the panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-governments.

He also doubted that whether by this amendment, the Government of India can compel the States to make devolution. He had objection to three clauses of this Bill. In Article 243Z J(1) of Part IX B, para 3, it has been mentioned that provided further that the Legislature of a State may, by law, provide for reservation of one seat for the Scheduled Castes or the Scheduled Tribes. This means, one seat will be reserved either for the Scheduled Castes or for the Scheduled Tribes. But where the thickness of population of the Scheduled Castes and the Scheduled Tribes is more, one section of the population will be overlooked. He suggested that one seat should be reserved for the Scheduled Castes and another seat should be

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reserved for the Scheduled Tribes so that this will go to the State Governments and they can decide.

He quoted that the High-powered Committee constituted by the Government to review this Bill have categorically stated that those persons who have been defeated in the election for the Board of Directors should not be co-opted and wanted to add this clause.

Shri S. Semmalai (AIADMK) supported the bill and welcomed it. He suggested that a suitable provision is to be incorporated to restrict the term of the Officer of the President of the Cooperative Society to not more than ten years, that is, for two terms only. By restricting the term of the President, it may be ensured that no vested interest is developed. In respect of provision to supersede he apprehended that this provision may be used arbitrarily by the authorities. Hence he suggested that a show cause notice should be given detailing the irregularities committed and given reasonable opportunities to the Board to place its defects. He felt that incorporation of suitable provision in this regard will remove any ambiguity.

Shri Prabodh Panda (CPI) remarked the amendment is a blow to the very concept of the autonomous aspect of the cooperative sector. He mentioned that this Bill is going to dilute the concept of autonomy of cooperatives by including it in the Directive Principles of State Policy and by taking away the autonomy of cooperatives in an indirect manner and this is a step to corporatize the cooperative sector. He was of the view that the proposed provisions of the bill should not be included in the Constitution and it can be included as a separate schedule under Article 19 (1) (c). He also stated that this is a sort of encroachment on the rights of the states and very essence of the autonomous system of the cooperative sector should not be diluted.

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Shri Shivaramagouda (BJP) welcomed the Constitutional Amendment Bill. He wanted the number of Directors should be fixed according to the number of districts in the concerned state so that the representatives from all the districts would get priority in the state apex cooperative bodies and requested the Hon'ble Minister to look into this aspect. He further mentioned "they must not be treated as a part of the Government machinery like the institution of local governance which have been established as the third tier of the government following the 73rd Constitutional Amendment".

Shri Jagadanand Singh (RJD) congratulated and supported the Bill. He mentioned that society should not be superseded but Officials involved in fraud and misappropriation should be punished. He suggested that clause relating to superseding the societies should be removed and weaker sections should be empowered to manage the cooperatives.

Shri Prasanta Kumar Majumdar (RSP) strongly opposed the bill. He stated that "The cooperative societies is a subject enumerated in Entry 32 of the State List of the Seventh Schedule of the Constitution and the State Legislatures have accordingly enacted legislations on cooperative societies. However in spite of expansion of cooperatives, their performance and functioning have not been upto the desired level. Therefore proper vigilance and monitoring must be there to streamline their performances. The Central Government must ensure that the cooperative societies run well and in a sound manner. Currently, the principles of autonomy, fundamental right and the voluntary nature of the societies are being diluted. A new Article 19 (C) must be inserted in Part IV of the Constitution (Directive Principles of State Policy) for the states to strive to promote voluntary formation, autonomous functioning, democratic control and professional management of cooperative societies and Article 43 (B) should be removed. Wherever two or three states have

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set up one cooperative, that too is being run by an existing law of 2002. The Centre should not interfere in the functioning of the states in as far as cooperatives are concerned. The States rights must be safeguarded and the Government should not encroach upon those prerogatives".

Shri Kameshwar Baitha (JMM) strongly supported the Bill. He cited the brand image of 'Amul' products and 'Dhara' oil created in Gujarat. He was of the view that this type of image need to be replicated in other states. He opined that the tribals in Jharkhand, Orissa, West Bengal, Chattisgarh, Andhra Pradesh need to be organised into a cooperative society and given a membership card authorising them to collect Tendu leaves.

Shri Ramkishun (SP) welcomed the Bill. He was of the view that whereever Officials commit misappropriation there should be a provision of fine as punishment.

Shri Kaushalendra Kumar (JD) spoke in favour and strongly supported the Bill. He requested the Minister to bring in more amendments to improve the functioning of PACS.

Shri Arjun Ram Meghwal (BJP) said "The axiom of the cooperative movement is 'one for all, all for one' several things except this axiom, are dealt within this amendment". He observed no effort has been made to correct the long term NPA which increased due to the wrong policies of the government. He further added that "The recommendations of the prior Committees have not been acceded to in this amendment. It is not clear as to how the resources would be available at the cost price. No means has been suggested to get rid from the clutches of the middlemen. There is a provision for 21 members cap in the Board of Directors, which is not good. The tenure of the Board is fixed for 5 years. Only one seat has been given for both SC and ST in the Board and they do not have

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voting right. This is not right. One separate seat each for ST and SC should be given with voting right".Dr. M. Thambidurai (AIADMK) said "I oppose this Bill".

The reply of the Hon'ble Minister for Agriculture and Cooperation in the Lok Sabha is given in Annexure -II.

Shri Sharad Pawar, Minister of Agriculture moved the amendment stating “That this House do suspend clause (i) of rule 80 of the Rules of Procedure and Conduct of Business in Lok Sabha in so far as it requires that an amendment shall be within the scope of the Bill and relevant to the subject matter of the clause to which it relates, in its application to the Government amendment No.3 to the Constitution (One hundred and Eleventh Amendment) Bill, 2009 and that this amendment may be allowed to be moved.”

The new clause 1A added to the Bill was voted in favour of by 320 members and the motion was adopted.

SECTION -VIRAJYA SABHA DEBATE

The motion for consideration of The Constitution (One Hundred and Eleventh Amendment) Bill was moved on 28th December 2011 by Shri Sharad Pawar in the Rajya Sabha. He stated that though the cooperatives have grown, their performance in qualitative terms was not up to the desired level and there is intervention in their day-to-day functioning. He mentioned that right to form a cooperative society is a fundamental right and empowers the Parliament in respect of multi-state cooperative societies and the State Legislatures in case of other cooperative societies. He further stated that these provisions will not only ensure the autonomous and democratic functioning of cooperatives, but ensure the accountability of management and also provide for deterrence. The text of his speech is given in Annexure -III.Shri Balavant alias Bal Apte (BJP) stated that it is right time to recognise cooperatives as economic institutions and efforts are required

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to rid the cooperative societies of the various ills. He remarked “Those who run these cooperative societies are barons. Therefore, apart from giving them constitutional status, active action to rescue these societies from these barons has to be taken. The great prejudice is being shown by the Central Government towards the cooperative sector. A substantial economic provision has to be made". He felt that if the Governmental funding goes through the cooperaives, it will certainly go to the people. He was optimistic that the Constitutional Amendment will have a consequence of actual action.

Dr. E. M. Sudarsana Natchiappan (INC) pleaded for prohibiting the

system of many of the State Governments having their own officials. He

expressed happiness that this Constitution Amendment will give them six

months time till the notification of this Amendment and there will be an

election throughout India.

Shri P. Rajeeve (CPI (M)) opposed the Constitution Amendment Bill

stating the Central Government is trying to encroach upon the right of the

State Governments to make legislation with regard to cooperative

societies. He said “ The Standing Committee on Agriculture after hearing

the views of all the stakeholders, recommended against the Constitutional

Amendment Bill. Hence, this Bill is a direct attact on the Directive

Principles of State Policy”.

Prof . S.P. Singh Baghel (BSP) did not support the Bill in the present

form. He said the people who do not know even the fundamentals of

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cooperative movement, become the Chairman of giant cooperative

organisations. He presented the pathetic condition of cooperatives in

Uttar Pradesh. He was of the view that the Chairman of a cooperative

society should be elected directly by the members instead of delegates.

He wanted the representatives of minorities and backward classes should

also be included.

Prof. Anil Mumar Sahani (JD(U)) questioned “What action has been

taken to make cooperative movement a leading movement”? He wanted

an independent committee should be constituted to conduct elections of

all the societies in the whole country.

Dr. Janardhan Waghmare (NCP) observed cooperative movement is

an alternative to capitalist economy as well as socialist economy. He

spoke on the achievements of cooperatives in Maharashtra, citing, sugar,

dairy and wanted to find out ways and means to strenghten this

movement in the face of the pressures of global economy. He was of the

view that much more investment is needed in the cooperative sector.

Shri Pyarimohan Mohapatra (Independent) remarked that through

this Bill, the powers of the States are being sought to be snatched away.

He urged the Honourable Minster not to derogate the Constitution by

pushing this kind of a thing in the Constitution.

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Shri D. Bandyopadhyay (AITC) viewed the Bill can give economic

power to the powerless. He urged upon the Government to consider to

having a separate and independent Election Commission since it is not

possible for the Registrar alone to supervise a huge organisation.

Shri Veer Pal Singh Yadav (SP) said cooperative movement would be

benefitted by this amendment on a large scale and it would give a new

life to the movement. He was of the view that this amendment will

remove most of the shortcomings of the system. He wanted a cadre of

secretaries of cooperative societies and sought representation for OBC.

Shri M.P. Achuthan (CPI) suspected the aim of the Bill is to encroach

upon the genuine rights of the States and there is no need to bring such

a constitutional amendment as cooperative movement in every state has

got its own specific features.

Shri Birendra Prasad Baishya (AGP) was of the view that vested

interests should take serious note of this and the Bill is against the federal

structure of the country.

Dr. Prabhakar Kore (BJP) said "I welcome the Bill because I come from

cooperative movement. In some of the cooperative institutions like sugar

factory, the member must have his land. Otherwise he cannot become a

member. in that case, what this Act is going to do? Most of the

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cooperative institutions, banks and sugar factories are covered under

taxation which is our aim".

Shri Jesudasu Seelam (INC) mentioned that this is a very good and

important piece of legislation to reform a vital sector. He spoke of the

achievements of cooperatives in India and wanted financial discipline. He

supported the Bill as it would help more than 6.5 lakh cooperatives and

the sector would grow.

Dr. Barun Mukherji (ALFB) felt that the Bill is superfluous and there

was no need to bring this Bill at all. He stated "cooperative sector is run

by the people and for the people. Cooperative movement was started to

help the helpless poor people, to give assistance in the form of credit and

monetary support, and also various types of other supports. We would

like that it should grow in its own way. In many of the States the

Cooperative Act has been amended and has taken care of many of the

objects that are being proposed by this particular Bill". He pleaded for

reservation of OBCs.

Dr. K.P. Ramalingam (DMK) expressed apprehensions and said that “I am afraid that this Bill may erode the strength of the State Governments...I would like to make it clear that our nation is functioning in a federal setup. Federal structure has to be honoured". He further stated that cooperatives come under the control of States and said “I have a doubt as to what is the need to bring this Bill now?...I would like to

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ask whether this amendment is necessary at this time. If so, will it not deprive the State Governments of their power?" He said if the state governments are deprived of all of their powers, "gradually, I fear that it will lead the state governments to demand autonomy".3

Shri Vijayakumar Rupani (BJP) mentioned that for the success of

cooperative movement the office bearers of cooperative society should

remain changed and their elections should be held periodically.

Shri Mani Shankar Aiyar (INC) drew the attention to the provision in

243(z)(i), which specifically says that subject to the provisions of this part,

the legislature of a State may by law make the required provisions. He

said there is no attempt to invade the territory of the State Governments.

He cited voluntary associations, democracy, interference by State

Governments, professionalisation were the reasons for cooperatives not

living up to the expectations. He stated “Members from SC, ST and

women category should be included in the board of cooperative societies.

No Government should be allowed to interfere in the autonomous

functioning of a cooperative society. To complement part 9 and 9 (a) of

the constitution part 9 (b) should be added giving constitutional status to

the cooperatives. We must also bring in part 9 (c) giving constitutional

status to the Nyaya Panchayat. At that point the people of India will

believe that we are with them'.

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Smt. Maya Singh (BJP) urged upon the Honourable Minister that there

should be a reservation of 50 percent for women in the boards of

cooperative societies on the lines of 50 percent reservation for women by

Governments in Panchayats, Municipal Councils and Municipals

Corporations.

Shri Biswajit Daimary (BPF) supported the Bill and urged upon the

Honourable Minister that the amendments should be implemented

properly so that the poor and backward people living in rural areas may

be able to know about and get the benefits of cooperative movement.

Shri Mohammed Addeb (Independent) supported the Bill. He

mentioned the minorities particularly the muslims are not linked with the

cooperative movement and wanted them to be included in the Bill.

Shri Ram Kripal Yadav (RJD) supported the Bill. He cited the

contribution of sugar cooperatives, dairy cooperatives. He observed the

movement is almost dead in many States including Bihar and the

institutions connected therewith are lying closed. “A lot of property is

being destroyed. The cooperative movement is of no use if people are

not associated with it. The movement is in the grip of few people. We will

have to revive the movement. Where there are rural-based products,

people should be connected with the cooperative. We can initiate white

revolutioon by means of the movement. Chilling plants should be set up

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to store milk from various villages. In this way we can alleviate poverty

and unemployment. The cooperative societies can distribute seeds,

fertilizers, coal and foodgrains. That is how black marketing of these

things can be checked. The State Governments are hitting at the freedom

and autonomy of the cooperative societies. On account of this, their

efficiency has decreased. The participation of women can be useful. The

Government should ensure the reservation of backward classes like that

of the SC, ST and women. Minorities such as Muslim, Jains, Sikhs, etc.

should also be give reservation". In respect of the clause 243ZJ, the word

‘and’ should replace the word ‘or’ so that one each member of SC and ST

can represent in the board of member”.

Prof. Ram Gopal Yadav (SP) supported the Bill. He pointed out the

irregularities committed by the State Governments and pleaded for

reservation to the SCs, STs, Women, OBCs and minorities.

The Honourable Minister replied to the Debate by thanking the House for

supporting the Constitutional Amendment Bill. He spoke on the

contribution of leaders, disbursement of agricultural credit, their role in

fertilisers, milk agro-processing and PDS. He delved at length on

democracy, management and conduct of elections. He also spoke on the

rights of legislature, revival of the cooperative sector, public distribution

system, empowering the poor in cooperatives. The reply of the

Honourable Minister is given in Annexure -IV. 154 members voted in

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favour of the Bill and 43 voted against the Bill. Thus the Bill was passed

by a majority of the total membership of the House and by a majority of

not less than two-thirds of the Members of the House present and voting.

Annexure - IIntroduction of the Bill in the Lok Sabha

Hon. Members are aware that the Cooperative Societies is a State subject under Entry 32 of the State List of the Seventh Schedule of the Constitution. Accordingly, the States have enacted their own Cooperative Societies Acts for incorporation, regulation and winding up of cooperative socieites within their territorial jurisdiction. However, for incorporation, etc. of the cooperative societies with objects serving the interests of the Members in more than one State, the Parliament enacted Multi-State Cooperative Societies Act, 1984 under Entry 44 of the Union List of the Seventh Schedule replacing the Multi-Unit Cooperative Societies Act, 1942. The Act of 1984 has since been replaced by the Multi-State Cooperative Societies Act, 2002.

Since Independence, cooperative movement has grown significantly with most extensive network of cooperative institutions all over the country. These cooperative institutions are functioning in the sectors of agricultural credit, agricultural inputs, marketing of agricultural produce, storage and

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processing of agro produce, urban credit, housing, production of fertilisers, dairy, fisheries, handlooms, and handicrafts etc. However, it has been expericenced that in spite of considerable numerical expansion of cooperatives in different sectors of the national economy, their performance in qualitative terms has not been up to the desired level. Many of these institutions are not being managed on principles of democratic member control and professional management. In many cases, these cooperatives are heavily dependent on financial support from the Government, which has led to intervention in their day to day functioning. There are also instances of avoidable political interference in working of these institutions.

In this direction, the Government has enunciated a National Policy on Cooperatives. The Multi State Cooperative Societies Act, 2002 has also been enacted with a view to provide a guiding framework for State legislations, though its application is limited to only those cooperative societies with objects serving interests of members in more than one State. It has been the endeavour of the Government of India to evolve an appropriate policy and legislative framework to create environment conducive to the healthy and sound growth of cooperatives. It has been felt that there are several provisions in the State Acts, which go beyond the spirit of democratic functioning of cooperatives, for which State Governments have been persuaded to amend their Acts. However, in spite of the felt need for amendments in the State Acts, the pace of reforms in cooperative legislations by the States is not encouraging. Therefore, a view has emerged in the cooperative sector, all over the country, to incorporate certain provisions in the Constitution to provide protection to cooperatives and to insulate them from avoidable political and bureaucratic interference. This was also endorsed by the Conference of State Cooperative Ministers held way back in December, 2004.

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Accordingly, the Constitution (One Hundred and Sixth Amendment) Bill, 2006 was introduced in Fourteenth Lok Sabha on 22.5.2006. On reference from the Hon. Speaker the Parliamentary Standing Committee on Agriculture had also examined the Bill. However, the Bill could not be considered by the House as it lapsed.

It was decided to re-introduce the Bill for amendment to the Cooperatives. The Constitution (One Hundred and Eleventh Amendment) Bill, 2009 has been introduced in the Lok Sabha on 30.11.2009. The hon. Speaker, Lok Sabha referred the Bill to the Parliamentary Standing Committee on Agriculture. The Standing Committee after holding discussions with Secretary and other officers of the Department of Agriculture and Cooperation, State Governments, Experts and other stakeholders in the field of cooperatives, presented its Report to Lok Sabha on 30 th August, 2010. The suggestions made by the Standing Committee have been examined in the Department in consultation with the Ministry of Law and Justice. It has been decided with the approval of the Cabinet in its meeting held on 1.12.2010 to accept one of the main recommendations of the Standing Committee that is right to form cooperative societies as a Fundamental Right by amending Article 19 (1) (c) of the Constitution. The Bill already takes care of another important recommendation of the Committee to set up a specialized agency on the lines of Election Commission for conducting elections of the Cooperative Societies.

The object of the Constitution (One Hundred & Eleventh Amendment) Bill 2009 is to ensure that the Cooperative Societies in the country function in a democratic, profession, autonomous and economically sound manner. The proposed amendment in the Constitution, interalia, seeks to empower the Parliament in respect of multi-state Cooperative Societies and the State Legislatures in case of other Cooperative Societies to make appropriate law, laying down the following matters, namely:-

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a) Right to form Cooperative Societies as a Fundamental Right by insertion of the words ‘Cooperative Societies’ in sub clause (c) of clause (1) of Article 19.

b) Insertion of Article 43B in part IV of the Constitution as Directive Principles of State Policy for voluntary formation, autonomous functioning, democratic control and professional management of Cooperative Societies.

c) Provisions for incorporation, regulation and winding up of cooperative based on the principles of democratic member-control, member-economic participation and autonomous functioning;

d) Specifying the maximum number of Directors of a Cooperative Society not exceeding twenty-one members;

e) Providing for a fixed term of five years from the date of election in respect of the elected members of the board and its office bearers;

f) Providing for a maximum time limit of six months during which a Board of Directors of a Cooperative Society could be a superseded or kept under suspension;

g) Providing for independent professional audit; h) Providing for right of access to information to Members of

Cooperative Societies; i) Empowering the Government to obtain periodic reports of

activities and accounts of Cooperative Societies; j) Providing for reservation of one seat for the Scheduled Castes or

the Scheduled Tribes and two seats for women on the Board of every Cooperative Society, which have individuals as members from such categories; and

k) providing for offences relating to Cooperative Societies and penalties in respect of such offences.

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It is expected that these provisions will not only ensure the autonomous and democratic functioning of cooperatives, but enhance the public faith in these institutions and also ensure the accountability of management to the Members and other stakeholders and also provide for deterrence for violation of the provisions of the law.

The Bills seeks to achieve these objects.

Annexure-IIReply by the Honourable Minister for Agriculture to the Debate in

Lok Sabha

Madam Speaker, at the very outset, I would like to thank all the hon. Members of this House for giving such overwhelming support to the proposed Bill.  I congratulate the hon. Members for their keen interest and concern for strengthening the cooperative sector in the country, which has emerged as one of the most important institutions to serve the economically weaker sections of the society.

          I am very grateful to the hon. Members who have given very useful suggestions for making improvements in the governance of cooperative societies in the country.

          Madam, as I have already indicated in my speech yesterday, the cooperative movement has seen considerable growth in many important sectors of the economy.

          Madam, with your permission, may I lay the rest of my speech on the Table of the House?

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An overwhelming majority of about six lakh cooperatives are registered under the respective State Cooperative Societies Act. Only about 600 Multi-State Cooperative Societies are registered in the country under the Multi-State Cooperative Societies Act, 2002, which is a Central Act. Therefore, the States have to primarily take steps to strengthen the cooperatives in the country. The Government of India is always prepared to guide and support the States in this endeavour.

          The cooperative movement in the world is more than 200 years old. In our country also, cooperative style of working has been part of our life and prevalent for centuries. However, the cooperative societies were formally incorporated when the Cooperative Credit Societies Act, 1904 was passed. The State of Assam and Tamil Nadu were the first to introduce cooperative banks to provide credit to the weaker sections of the people. The cooperative societies namely Rajahauli Village Bank, Jorhat, Jorhat Cooperative Town Bank and Charigaon Village Bank, Jorhat in Assam and Tirur Primary Agricultural Cooperative Bank Limited, in Tamil Nadu were constituted in the year 1904. This was closely followed by the cooperatives registered in Madhya Pradesh, Punjab, Odisha, Karnataka and West Bengal in the year 1905.

          A Model Cooperative Societies Act was finalized in 1990 on the recommendations of an Expert Committee under the chairmanship of Ch. Brahm Prakash to take the cooperative movement forward and suggest a future direction for cooperatives. However, since 'Cooperation' is a State subject, certain difficulties were experienced in making amendment in the State Cooperative Acts on the lines of Model Cooperatives Act. Subsequently, Parallel Cooperative Legislation for self-reliant cooperatives have been proposed for the governance of those cooperatives, which have not received any assistance from the government. So far, only 9 States have enacted this Parallel Cooperative Act, which provides for more autonomous and democratic functioning of cooperatives.

          The Parliament has also enacted the Multi State Cooperative Societies Act for promoting cooperative societies with objects not confined to one State and serving the interests of members in more than one State. The Multi State Cooperative Societies Act with its progressive provisions for the democratic member control and autonomous functioning, has helped to create successful national level cooperatives such as IFFCO and KRIBHCO.

           The IFFCO was registered on November 3, 1967 as a cooperative society. The society is primarily engaged in production and distribution of fertilizers. It is a unique venture in which the farmers of the country through their own cooperative societies created this new institution to safeguard their interests. The number of cooperative societies associated with IFFCO have risen from 57 in 1967 to 39,824 at present. IFFCO's

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annual capacity has been increased to 3.69 million tonnes of Urea and NPK/DAP equivalent to 1.71 million tonnes. In addition, essential agro- inputs for crop production are made available to the farmers through a chain of 158 Farmers Service Centre (FSC). IFFCO has promoted several institutions and organizations to work for the welfare of farmers.

           KRIBHCO has setup a Fertilizer Complex to manufacture Urea, Ammonia & Bio-fertilizers at Hazira in the State of Gujarat. Late Shrimati Indira Gandhi, former Prime Minister of India laid the Foundation Stone on February 5, 1982. Annual capacity for Urea and Ammonia is 1.729 million MT and 1.003 million MT respectively. The Bio fertilizer plant has a capacity of 250 MT per year capacity. Ten Seed Processing Plants are also in operation in various states.

          Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF) was established in 1973. It is India's largest food product marketing organization with dairy milk procurement of approx 12 million lit (peak period) per day from 15,712 village milk cooperative societies, 17 member unions covering 24 districts, and 3 million milk producer members. It is the Apex organization of the Dairy Cooperatives of Gujarat, popularly known as 'AMUL', which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products. Its success has not only been emulated in India but serves as a model for rest of the World. GCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading House" status. For its consistent adherence to quality, customer focus and dependability, GCMMF has received numerous awards and accolades over the years.                                              

          I am very happy to inform Hon'ble Members that the right to form cooperative societies is proposed to be made a Fundamental Right under Article 19 (1) (c) of the Constitution as recommended by the Standing Committee on Agriculture. It is expected that this would give boost to the cooperative movement and enthuse the people to actively participate in the cooperative as a matter of right. This would significantly increase the interest and responsiveness of the members and strengthen the cooperative movement further.

          Many hon. Members have suggested that there should be employees representation in the management of the cooperative societies. The employees of any working organization play a key role in ensuring success of the organization. In a way, the long term interests of the employees are closely linked to the well-being of the organization in which they work. They can play a very useful role in the organization to meet its objectives. The proposed amendment provides for having the functional Directors on the Board of a cooperative society to utilize their experience and expertise for improving the functioning of the society.

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These functional Directors would be the employees of the society. There is also a provision for co-option of the persons who have the expertise in the field related to objects and activities undertaken by the society, as members of the Board. The employees, among others, would also be eligible for being appointed as members of the Board of the society in this category. Further provisions, if required, in this regard, may be brought up by the States in their respective Cooperative Societies Act.

          Many hon. Members have given their views on the supersession and suspension of the Board of Directors by the Government. While some members advocate more powers to the Government to supercede the Boards of even those societies where there is no financial assistance from the Government, others feel that this power should either be taken away or it should be severely restricted. I am of the view that the power to supercede or suspend the board of a cooperative society should be used only in exceptional circumstances; only in those cases, where there is serious negligence in the performance of duty or where serious irregularities prejudicial to the interests of the society are committed. However, it has been noticed that there are many instances of supersession and suspension of the Board on very routine and less serious grounds. It is also found that elections are not held for many years for the societies which seriously affects their democratic member control and autonomous functioning. As per the report furnished by NABARD, elections are yet to be held in the States of Andhra Pradesh, Manipur, Odisha and Tamil Nadu. We have tried to build up proper checks and balances to ensure that the power of supersession and suspension is not used indiscriminately or frivolously. The proposed Constitutional amendment specifies the major cases where such supersession or suspension may be resorted and it also limits such action in respect of those societies where some financial assistance has been provided by the Government. It also provides for mandatory conduct of elections within six months of such supersesson by an independent authority. Thus, adequate safeguards have been built in to prevent the misuse of this power by the concerned officers.

An issue has been raised whether the cooperative societies are covered under the provisions of the RTI Act. The RTI Act secures access to information under the control of public authorities for citizens in order to promote transparency and accountability in their working. As most of the cooperative societies would not fall under the category of 'Public Authority', therefore, they may not be covered under the provisions of this Act. However, there have been certain orders from various Courts in this regard. The High Court of Kerala in WP No. 1417 of 2009 - Thalapalam Service Cooperative Vs Union of India & Others has held that whether a society is a public authority, is a disputed question of fact, which is to be resolved by the authorities under RTI Act. However, it is in the interest of cooperative societies to have well-informed active members, which only

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can ensure successful functioning of the cooperative institutions. In view of this, it has been provided in the proposed amendment that the members of the cooperative society would be entitled to secure important information about the working and business of the society. This would bring in much desired transparency and fairness in the working of the societies.

The proposed amendment would go a long way to address the problems and deficiencies that the cooperatives face today. It would not only ensure the autonomous and democratic functioning of the cooperatives but enhance the public faith in these institutions. It would also ensure the accountability of management to the members and other stakeholders and also provide for deterrence for violation of the provisions of the law. It is expected that the cooperative movement would be further strengthened by this amendment and would be able to serve the members particularly those from economically weaker sections much better.

                                                                               

Annexure III

Introduction of the Bill in the Rajya SabhaTHE MINISTER OF AGRICULTURE (SHRI SHARAD PAWAR): Sir, I beg to move: That the Bill further to amend the Constitution of India, as passed by Lok Sabha, be taken into consideration. Mr. Deputy Chairman, Sir, I feel privileged to seek the support of this august House for the very important Constitution (One Hundred and Eleventh Amendment) Bill, 2009, to strengthen the cooperative movement in the country. The year 2012 will be celebrated as the Year of Cooperation all over the world. The cooperatives are one of the most important instruments to provide service to the economically weaker sections of the population and have a widespread reach up to the village level. Hon. Members are aware that 'Cooperative Societies' is a State Subject under Entry 32 of the State List of the Seventh Schedule of the Constitution. Accordingly, the States have enacted their own Cooperative Societies Acts for incorporation, regulation and winding up of cooperative societies within their territorial jurisdiction.

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However, for incorporation, etc., of the cooperative societies with objects and area of operation not confined to one State and serving the interests of members in more than one State, the Parliament enacted the Multi-State Cooperative Societies Act, 1984, under Entry 44 of the Union List of the Seventh Schedule (replacing the Multi-Unit Cooperative Societies Act, 1942). The Act of 1984 has since been replaced by the Multi-State Cooperative Societies Act, 2002.

The cooperative movement in the country has witnessed substantial growth in many diverse areas of the economy. With a network of about six lakh cooperative societies and a membership of about 24.92 crore, the cooperative movement in India has emerged as one of the largest in the world. The cooperative movement today provides coverage to almost 97 per cent of the villages and 71 per cent of the rural households. The agricultural credit advanced through cooperatives has increased from a meagre Rs.214 crore in 1960-61 to Rs.70,105 crore in the year 2010-11, with about 19 per cent share in total institutional agricultural credit. The share of cooperatives in fertilizer distribution is about 35 per cent, and in sugar production, it is nearly 46 per cent. The cooperatives also account for 33.5 per cent of wheat procured. Fifty-four per cent of the handlooms and 20 percent of the retail fair price shops are in the cooperative sector. The cooperative sector provides direct and self-employment to about 16.69 million people in the country. It has been experienced theft in spite of considerable numerical expansion of cooperatives in different sectors of the national economy, their performance in qualitative terms has not been up to the desired level. Many of these institutions are not being managed on principles of democratic member control, autonomous functioning and professional management. In many cases, these cooperatives are heavily dependent on financial support from the Government, which has led to intervention in their day-to-day functioning. There are also instances of avoidable political interference in working of these cooperative institutions. It has been the endeavour of the Government of India to evolve an appropriate policy and legislative framework to create environment conducive to the healthy and sound growth of cooperatives. With this in view, the Government of India has taken various measures for promoting and developing the cooperative sector in the country. These include, inter-alia, framing of national policy on cooperatives, enactment of the Multi-State Cooperative Societies (MSCS) Act, 2002, assistance to cooperative education and training, assistance through NCDC for development of cooperatives, implementation of recommendations of Prof. Vaidyanathan Committee and constitution of high-powered Committee on Cooperatives etc. It has been felt that there are several provisions in the State Acts, which go beyond the spirit of democratic functioning of cooperatives, for which the State Governments have been persuaded to amend their Acts. However, in spite of the felt need for amendments in the State Acts, the pace of reforms in cooperative legislations by the States is not encouraging, and,

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therefore, a view has emerged in the cooperative sector to incorporate certain provisions in the Constitution to provide protection to cooperatives and to insulate them from avoidable political and bureaucratic interference. This was also endorsed by the Conference of State Cooperative Ministers held way back in December, 2004.

Accordingly, the Constitution (One Hundred and Sixth Amendment) Bill, 2006 was introduced in 14th Lok Sabha on 22nd May,2006. On reference from the hon. Speaker, Lok Sabha, the Parliamentary Standing Committee on Agriculture had also examined the Bill. However, the Bill could not be considered by the House as it lapsed.

It was decided to re-introduce the Bill for amendment to the cooperatives. The Constitution (One Hundred and Eleventh Amendment) Bill, 2009 as has been introduced in the Lok Sabha on 30.11.2009. The hon. Speaker of Lok Sabha referred the Bill to the Parliamentary Standing Committee on Agriculture. The Standing Committee after holding discussions with Secretary and other officers of the Department of Agriculture and Cooperation, representatives of the State Governments, experts and other stakeholders in the field of cooperatives, presented its Report to Lok Sabha on 30th August, 2010. The suggestions made by the Standing Committee have been examined in the Department in consultation with the Ministry of Law and Justice. The Bill has been passed in Lok Sabha on 22nd December, 2011 with overwhelming support of the Members. I am very happy to inform the hon. Members that the right to form cooperative societies is proposed to be made a fundamental right under article 19(1)(c) of the Constitution, as recommended by the Standing Committee on Agriculture. It is expected that this would give boost to the cooperative movement and enthuse the people to actively participate in the cooperative as a matter of right. This would significantly increase the interest and responsiveness of the members and strengthen the cooperative movement further. The object of the Constitution (One Hundred and Eleventh Amendment) Bill, 2009 is to ensure that the cooperative societies in the country function in a democratic, professional, autonomous and economically sound manner. The proposed amendment in the Constitution, inter-alia, seeks to empower the Parliament in respect of multi-State cooperative societies and the State Legislature in case of other cooperative societies to make appropriate law, laying down the following matters, namely:(i) Right to form cooperative societies as a fundamental right by

insertion of the words 'cooperative societies' in sub-clause (c) of clause (1) of Article 19.

(ii) Insertion of Article 43B in Part IV of the Constitution as a Directive Principle of State Policy for voluntary formation, autonomous functioning, democratic control and professional management of cooperative societies.

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(iii) Provisions for incorporation, regulation and winding up of cooperative based on the principles of democratic member-control, member-economic participation and autonomous functioning;

(iv) Specifying the maximum number of directors of a cooperative society not exceeding twentyone members;

(v) Providing for a fixed term of five years from the date of election in respect of the elected members of the board and its office bearers;

(vi) Providing for a maximum time limit of six months during which a board of directors of a cooperative society could be superseded or kept under suspension;

(vii) Providing for independent professional audit;(viii) Providing for right of access to information to members of

cooperative societies;(ix) Empowering the Government to obtain periodic reports of activities

and accounts of cooperative societies;(x) Providing for the reservation of one seat for the Scheduled Castes or

the Scheduled Tribes and two seats for women on the Board of every cooperative society, which have individuals as members from such categories; and

(xi) Providing for offences relating to cooperative societies and penalties in respect of such offences. It is expected that these provisions will not only ensure the autonomous and democratic functioning of cooperatives, but enhance the public faith in these institutions and also ensure the accountability of management to the members and other stakeholders and also provide for deterrence for violation of the provisions of the law.

The Bill seeks to achieve these objectives.

  Annexure IV

Reply by the Honourable Minister for Agriculture to the Debate in Rajya Sabha

The Hon'ble Minister, replying to the debate, said: I am grateful that the House has supported this important Constitutional Amendment Bill which has been passed by the Lok Sabha. The cooperative movement is very old in the country. By means of the movement, we can empower the poor people of society. Many leaders used to believe in the movement. In Gujarat, Shri Bankuthbhai Mehta imparted guidance to the cooperative institutions. Many persons strengthened the movement and made big contributions in the

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expansion of cooperative institutions. Crores of people have participated in the movement as its members. About 18 or 20 per cent agricultural credit is disbursed by them among the farmers. The cooperative societies have made great contribution in the fields of fertilizers, milk, agro-processing and PDS. The urban cooperative bank has shown the deposits of huge money. The villagers have easy access to the cooperative banks. The urban cooperative institutions have strengthened crores of families. We want to lead the cooperative movement along the democratic path. Its management should be better. It requires professionalism. Its economic transaction should be neat and clean. There is the need to improve election process of the members. No election has been conducted in various States for the last 5-6 years. There are the occurrences of super cession and many office bearers are in administration for many years. In the cooperative banks of Kerala, money has been deposited in the names of great persons whose names are being misused by people. We will have to check this kind of tendency. By the Amendment Bill, we will improve the process and system of election to some extent. There should be an institution like election commission. We formulate a policy in consultation with the important office bearers of banks and other institutions. That is how the extant Bill has been prepared. We can prepare some set-up of election for the bigger institutions; but, it will be difficult to conduct election for the cooperative societies in the villages.

The State Assembly has been provided with the right to formulate legislation thereof and the Government of India does not want to intervene into it. We can get people belonging to SCs but those belonging to STs are not easily available everywhere. Where can we bring them from? The Government of India helps the institutions working in cooperative sectors. The Government have contributed a lot for the revival of the entire sector as per the recommendations of Prof. Vaidyanathan Committee. A number of cooperative institutions by means of this waiver got revived. Today, it is by means of the Government of India that financial support is being provided for the training of the people working in cooperative sector. The Government of India takes the financial responsibility thereof through cooperative institutions. The Government of India wants to have Cooperative Sugar Mills in the country. 15 per cent of sugar is used to be provided to the people of BPL category through Public Distribution System. This has been done for the empowerment of the poor in cooperative sector. We shall talk to all in regard to the sick institutions whether they can provide some help for revival from such a situation. When such a problem appears, the Government also provide help. Wherever farmers are required to be helped, the Government provides the same. We cannot ignore our social responsibility.Decentralisation happens to be the soul of cooperative sector. This movement has in a way been set out to provide help to the lower class of society. It is with a view to bring about reforms, as required, the Bill has been introduced before the House. Your help is solicited for the rectification of the cooperative sector. We do not have any problem in providing reservation but we cannot for forget that it is an institution. Whether he belongs to the minority community or to OBCs or women, we have to have a campaign to make them members thereof. One can become office bearer thereof from out of members alone.

Conclusion

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In constitutional amendment forming a cooperative is a fundamental right. Emphasis is given to the principles of cooperation, restricting number of board of directors, convening the general body meeting within six months, and access to accounts by members. The uniqueness of the Constitutional Amendment Act is that the board cannot be superseded or kept under suspension for a period exceeding six months. This will ensure effective functioning of cooperatives and prevent the state governments from using cooperatives as a tool for achieving their political ends. Further the members participation in attending meeting and utilising the minimum number of services will ensure members loyalty towards the cooperatives. Professionalisation of cooperatives through education and training has been a subject of discussion for a pretty long time. The Constitutional Amendment Act has made it mandatory and this will lead to professionalisation of cooperatives. The ILO resolution and political will of major political parties paved way for bringing the Constitutional Amendment Act. It is now the responsibility and obligation of the various state governments to amend their laws in consonance with Constitutional Amendment Act 2011.

Notes:1) This is written based on the work of the Stirling Smith who is an

Associate at the Cooperative College, Manchester, England

2) It is against the spirit of the resolution as it warranted that the member nation should place the draft report before the Parliament and discuss thoroughly on the report and send reply to ILO. The website ttp://www.ilo.org/public/english/standards/relm/ilc/ilc89/ pdf/rep-v-2.pdf clearly indicates that the Government of India did consult none of the stakeholders while replying to the

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questionnaire. Besides no conclusive evidence is available on the discussion in the parliament on the ILO Resolution 193. It needs to be noted that many countries in Asia Pacific region have not placed the same in the Parliament.

3) It is to be noted that DMK was one of the coalition partner of UPA-II Government when the Act was introduced.

References:1. A Note on the proposal of the Union Deptt. of Agriculture and Cooperation to

amend the Constitution for providing Constitutional protection to cooperatives, Cooperative Development Foundation, Hyderabad.

2. arc.gov.in/9th report/ARC-9th Report -Ch 6-pdf P.1403. Election Manifesto (1996) of various political parties on the subject of

Cooperatives, Cooperative Services Group, National Dairy Development Board, Anand

4. http://www.ilo.org/dyn/normlex/en/f?p=1000:12100:0:::P12100_ILO_CODE:R193

5. http://www.ilo.org/public/english/standards/relm/ilc/ilc89/pdf/rep-v-2.pdf6. National Policy on Cooperatives, The Cooperator, October 2002 Pp 136-140.7. The Constitution of (Ninety Seventh Amendment)Act, 2011, The Gazette of

India, 12th January 2012, Pp.1-58. The Gazette of India, Ministry of Agriculture Notification Dt.13th February

2012.9. www.loksabha.nic.in10. www.rajyasabha.nic.in11. www.prsindia.org/uploads/media/Constitution111/Constitution111SCR.pdf12. 164.100.47-132/LSS/New Debates/uncorrecteddebate-aspx

(The authors acknowledge the support provided by Shri M.K.Mishra, Mrs. S.P. Naikare, and Mrs. V.V.Kulkarni in preparation of the article)

Abbreviations:

AGP - Asom Gana ParishadAIFB - All India Forward BlocAITC - All India Trinamool CongressAIADMK - All India Anna Dravida Munnetra KazhagamBJD - Biju Janata DalBJP - Bharatiya Janata PartyBPF - Bodoland Peoples FrontBSP - Bahujan Samaj PartyCPI - Communist Party of IndiaCPI (M) - Communist Party of India (Marxist)DMK - Dravida Munnetra KazhagamINC - Indian Natinal CongressJD (U) - Janata Dal (United)JMM - Jharkhand Mukti MorchaNCP - Nationalist Congress PartySS - Shiv SenaSP - Samajwadi PartyRSP - Revolutionary Socialist PartyRJD - Rashtriya Janata Dal

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