The cooperative sector in India is all set for an overhaul, with a new central ministry, and issues of federalism will crop up.
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How and Why do governments make new Ministries
- The story: As times change, the needs of the country change too. Society evolves, and politics evolves in tandem. In July 2021, the Indian govt. announced the setting up of a "ministry of cooperation". It is clear that creation or dismantling of any ministry is always a political call, meant to carry a political message, to reach out to specific sections of the electorate. Administrative needs also play a secondary role.
- Cooperation function: It has been part of several central ministries. Between 1974 and 1979, it was in the periphery of the ministry of industries and civil supplies; then it got mainstream in 1979, as part of the department of agriculture and cooperation. The web domain name of the ministry of agriculture and farmers welfare continues to be agricoop.nic.in, “coop” being the short form for “cooperation”.
- In the 1950s, in a new Indian republic, when Jawaharlal Nehru was prime minister, cooperation was one of the functions of the then combined ministry of food and agriculture, the other subjects being agricultural production, marketing, research, agricultural economics, minor irrigation, animal husbandry, fertiliser, land reclamation, et al.
- The July 2021 move was officially to realise a vision of “Sahkar se Samriddhi”, meaning prosperity through cooperation. So now the ministry would provide a separate administrative, legal and policy framework to strengthen India’s cooperative movement.
- The Centre will have a mandate to focus on multi-state cooperatives; presently there are some 1,300 such entities, headquartered mainly in Maharashtra, Uttar Pradesh, New Delhi and Tamil Nadu.
- Politics of it: When the Congress-led UPA came to power in 2004, panchayati raj was made a full-fledged ministry, with Mani Shankar Aiyar the cabinet minister for it (close working relation with former PM Rajiv Gandhi). Such messaging also needs a strong action plan and sufficient money.
- Nehru’s first cabinet had 14 ministers, and urban development was part of a large portfolio called the ministry of works, housing and supply. It got its new name only in 1985.
- In 1991, then PM PV Narasimha Rao found it appealing to add employment to the name of the ministry. Thus the ministry of urban affairs and employment was formed.
- The Bharatiya Janata Party’s first PM, Atal Bihari Vajpayee, who rose to power on the back of urban votes, bifurcated the ministry in 1999, with the creation of a full-fledged entity called the ministry of urban employment and poverty alleviation.
- Vajpayee also created the tourism ministry in 1999, catering to the interest of small traders in urban pockets, his key voters; tribal affairs (1999); and the development of north eastern region (2003), mainly to expand his party’s reach.
- During the UPA rule (2004-14), the creation of some of the new ministries — panchayati raj (2004), minority affairs (2006) and micro, small and medium enterprises (2007) — had a clear pattern; it wanted to send out a political message to its voter base — rural Indians, minorities and small entrepreneurs.
- With Modi in 2014, the first new ministry was skill development and entrepreneurship, then positioned as an answer to India’s growing unemployment.
- An issue of jurisdiction: There were worries on overlapping jurisdiction and erosion in federalism. Experts say that cooperatives can play a stellar role if the Centre succeeds in strengthening the existing regulatory framework, and that multi-state cooperatives do come under its jurisdiction. The Centre can announce schemes to incentivise the cooperatives. Some cooperatives like NAFED are profitable because the government procures items through them.
- NAFED, or the National Agricultural Cooperative Marketing Federation of India, an umbrella organisation of about 850 marketing societies and federations across the nation, primarily helps its farmers by procuring their produce such as food grains, pulses, cotton, fruits and vegetables, and helping the organisation make enough profit to pay an annual dividend of 20% or more to its shareholders.
- Big names connected with the cooperative movement are from non-BJP parties. The chairman of the Krishak Bharati Cooperative (KRIBHCO), Chandrapal Singh Yadav, is from the Samajwadi Party, while the chairman of the Indian Farmers Fertiliser Cooperative (IFFCO), Balvinder Singh Nakai, is affiliated to the Akali Dal. The paid-up capital of KRIBHCO is made up of contributions from 9,478 cooperative societies across India, and IFFCO, one of the largest cooperatives in India, has a network of about 36,000 cooperative societies involving 5.5 crore farmers.
- Which states lead: Among the cooperative societies registered under the Multi State Cooperative Societies Act, 2002, as many as 567, or 43% of the total, are headquartered in Maharashtra, many controlled by leaders affiliated to the Nationalist Congress Party (NCP) or the Congress. These are in sectors such as credit, agriculture, housing, dairy and banking. Karnataka, Gujarat and Tamil Nadu are some other states that have leapfrogged in cooperative movement.
- Summary: If all these factors are considered, and also the fact that the three agricultural laws passed by Parliament in 2020 have gotten stuck at the ground level, then the "Sahkar se Samriddhi" slogan sound political indeed. Cooperatives are one of the last big political frontiers the present ruling party has failed to make inroads into
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