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Kuniya Institute of IAS Examination

Mains – 27th Nov 23

The Multi-State Cooperative Societies (Amendment) Bill 2023

Why in News?

  • The Multi-State Cooperative Societies (Amendment) Bill 2023, which seeks to amend the Multi-State Co-operative Societies Act 2002, was passed by the Lok Sabha.

Cooperatives in India:

  • A co-operative society is a voluntary association of individuals having common needs who join hands for the achievement of common economic interest.
  • After independence, the first five-year plan (1951-56), emphasised the adoption of co-operatives to cover various aspects of community development.
  • Article 19(1)(c) of the Constitution states that All citizens shall have the right to form associations or unions or co-operative societies.
  • According to the Article 43B (DPSP) of the Indian Constitution inserted by the 97th Amendment (2011), states shall endeavour to promote –
    • Voluntary formation,
    • Autonomous functioning,
    • Democratic control and
    • Professional management of cooperative societies.
  • Cooperatives are a state subject, but there are many societies such as those for sugar and milk, banks, milk unions etc whose members and areas of operation are spread across more than one state. These inter-state Cooperatives are governed under Multi-State Cooperative Societies Act 2002.
  • According to the Supreme Court of India, Part IXB – The Co-operative Societies (also inserted by the 97th Amendment),will only be applicable to multi-state co-operative societies, as states have the jurisdiction to legislate over state co-operative societies.
  • Maharashtra has the highest number at 567, followed by Uttar Pradesh (147) and New Delhi (133).
  • Recently, Multi-State Cooperative Societies (Amendment) Bill, 2022 was passed by both the houses to amend the Multi-State Co-operative Societies (MSCS) Act, 2002.

 

Multi-state Cooperative Societies Act, 2002

  • Aims to consolidate and amend the law relating to cooperative societies, with objects not confined to one State and serving the interests of members in more than one State
  • The Act applies to all cooperative societies, with objects not confined to one State
  • All MSCS shall be registered under the Act through a Central Registrar (appointed by the Central Government.)
  • Every multi-state cooperative society may make its bye-laws consistent with the provisions of this act for its internal governance
  • Central Registrar has to prepare a scheme of amalgamation or reorganisation of a cooperative bank. This is done on the direction of the Central Government, with prior approval of RBI and in accordance with the Banking Regulation Act, 1949.

 

97th Constitutional Amendment Act 2011

  • It established the right to form cooperative societies as a fundamental right (Article 19)
  • It included a new Directive Principle of State Policy on the Promotion of Cooperative Societies (Article 43-B)
  • It added a new Part IXB to the Constitution titled “The Co-operative Societies” (Articles 243-ZH to 243-ZT)
  • It authorizes the Parliament to establish relevant laws in the case of multi-state cooperative societies (MSCS) and state legislatures in the case of other cooperative societies
  • SC, in Union of India vs Rajendra Shah and others, 2021 stated that Part IXB of Indian Constitution applied only to Multi-State Cooperative Societies.

 

Shortcomings with respect to the Functioning of Co-operatives:

  • Inadequacies in governance.
  • Politicisation and excessive role of the government.
  • Inability to ensure active membership.
  • Lack of efforts for capital formation.
  • Inability to attract and retain competent professionals.
  • There have also been cases where elections to co-operative boards have been postponed indefinitely.

 

Key Features of the Multi-State Cooperative Societies (Amendment) Bill 2023:

  • Election of board members:
    • Under the Act, elections to the board of a multi-state co-operative society are conducted by its existing board.
    • The Bill amends this to specify that the central government will establish the Co-operative Election Authority to conduct such elections.
    • The Authority will consist of a chairperson, vice-chairperson, and up to three members appointed by the central government on the recommendations of a selection committee.
  • Amalgamation of co-operative societies:
    • The Act provides for the amalgamation and division of multi-state co-operative societies by passing a resolution at a general meeting with at least two-thirds of the members present and voting.
    • The Bill allows state co-operative societies to merge into an existing multi-state co-operative society, subject to the respective state laws.
  • Fund for sick co-operative societies:
    • The Bill establishes the Co-operative Rehabilitation, Reconstruction and Development Fund for revival of sick multi-state co-operative societies.
    • Multi-state co-operative societies that are in profit for the preceding three financial years shall finance the Fund.
  • Restriction on redemption of government shareholding:
    • The Act provides that the shares held in a multi-state co-operative society by certain government authorities can be redeemed based on the bye-laws of the society.
    • The Bill amends this to provide that any shares held by the central and state governments cannot be redeemed without their prior approval.
  • Redressal of complaints:
    • As per the Bill, the central government will appoint one or more Co-operative Ombudsman with territorial jurisdiction.
    • The Ombudsman shall complete the process of inquiry and adjudication within 3 months from the receipt of the complaint.
    • Appeals against the directions of the Ombudsman may be filed with the Central Registrar (who is appointed by the central government) within a month.

 

Concerns regarding the Provisions of the Bill:

  • Effectively imposes a cost on well-functioning societies: Sick multi-state co-operative societies will be revived by a Fund that will be financed through contributions by profitable multi-state co-operative societies.
  • Against the co-operative principles of autonomy and independence: By restricting redemption of its shareholding in multi-state co-operative societies.

 

 

Right to Information Act, 2005

Why in news?

A Supreme Court bench observed that political parties may “have a point” when they fear that accountability under RTI may stretch to even disclosure of internal decisions.

 

About Right to Information Act 2005

  • Right To Information is derived from the fundamental right of freedom of speech and expression under Article 19 of the Constitution.
  • Key Provisions of the RTI Act include –
    • Sec. 4 of the Act imposes an obligation on public authorities to maintain its records duly catalogued and indexed in a manner and form which facilitates the right to information under the Act.
    • Sec. 6 of the Act entitles a person desirous of obtaining any information under the Act, to make a request in writing to the Central or State Public Information Officer specifying the particulars of the information sought by him.
    • Sec. 7 of the Act requires the Public Information Officer to either provide the information or reject the request for any of the reasons specified in Secs. 8 and 9 within 30 days of receipt of the request.
    • Under Sec. 19, if a person does not receive a decision within 30 days or is aggrieved by a decision of the Public Information Officer, he may prefer an appeal to an Officer who is senior in rank to the Public Information Officer in that Public Authority.
    • Exemptions under the Act – the information sought must not be related to defence, national security, or personal details.
    • Information must be provided within 30 days
  • Before the advent of the RTI act, the disclosure of information in India was restricted by the Official Secrets Act and some other special laws. The RTI Act relaxed many such laws in the country.

Who is covered under RTI?

  • The RTI Act, 2005 extends to the whole of India.
  • All bodies, which are constituted under the Constitution or under any law or under any Government notification or all bodies, including NGOs, which are owned, controlled or substantially financed by the Government are covered.
  • All private bodies, which are owned, controlled or substantially financed by the Government are directly covered.