27 May 2023 : The Indian Express

Editorial 1: Let there be Amul

Context:

• Recent opposition to Amul’s expansion to Karnataka and Tamil Nadu is a cause for concern as it is desirable that cooperative movement should be spread in the country.

About:

• India is home to a unique movement called ‘cooperatives’ which involves citizens and their democratic involvement at a grassroot level.
• A cooperative society is an organization owned and run by the people and for the people using its goods and services. 
  • Here, the people or members of the organization work in cooperation to pool resources for their common benefit and progress.
• Cooperatives are governed by Co-operative Societies Act, 1912, and The Multi-State Cooperative Societies Act, 2002.
• History: Cooperative societies in India were formed in late 1890s when farmers in western Maharashtra rebelled against money lenders’ tyranny for agricultural loans. In 1904, the British government in India enforced the Cooperative Society Act, to safeguard interests of poor farmers in Maharashtra.

• Spread: From agricultural markets, these Cooperative societies in India expanded to credit sector, and later to other large-scale sectors, housing and development, fishing markets, banking, etc.

State of Cooperatives in India:

• Indian cooperative movement, the world’s largest movement covers almost 98% of rural India, having more than 8.50 lakh societies with the membership of about 290 Million.
• Due to successful cooperatives like AMUL, KAVIN, etc. India has become the  world's largest milk producing country, accounts for more than 22.0% of the world and 57% of Asia’s total milk production.
• IFFCO and GCMMFL are in the top three positions globally in the list of top 300 cooperatives based on the ratio of turnover over GDP per capita, and in the agriculture and food industries segment.
• There are about 8,55,000 cooperative societies in India and about 13 crore people are directly associated with them.
• There are 91% villages in the country in which there is some co-operative society.
• There are 86% small farmers in the country, who cannot invest in farming themselves; cooperatives play an important role in developing facilities like cold storage for them.
• There are about 6000 Farmer Producer Organization (FPO) in the country.
• There are 65,000 Primary Agricultural Credit Societies (PACS) in the country.

Success models in Cooperatives in India:

• Agriculture and Allied Sectors: National Cooperative Development Corporation (NCDC), National Agricultural Cooperative Marketing Federation of India (NAFED), Indian Farmers Fertilisers Cooperative Limited (IFFCO), AMUL, KAVIN, Sittilingi Organic Farmers Association (SOFA) and Co-operative Rural Development Trust (CORDET).
• Banking Sector: Punjab and Maharashtra Cooperative (PMC) Bank, Bharat Cooperative Bank and Saraswat Cooperative Bank.

Challenges faced:

• Poor infrastructure, lack of quality management, over-dependence on government, dormant membership, non-conduct of elections, neglect of professionalism, etc. are the limiting factors.
• Misconceived Concentration of Power: Although cooperatives are democratic business institutions, yet the distribution and exercise of power at the Board level is a matter of concern.
  • In general, the principal task of the Chairman of the Board is to conduct the meeting and assist in formulating logical business proposals and take appropriate decisions.
• Inadequate Role of Promotional Institutions: To create awareness among co-operative members and general public, the promotional institutions like the National Co-operative Union of India and the state Co-operative Unions/Federations must take a stronger lead to implement member education programmes. Field studies have shown that the educational instructors and field projects are getting ineffective due to:
  • lack of programming for them;
  • lack of funds;
  • inadequate supply of support material; and,
  • lack of trainers training programmes.
• Mismanagement and Manipulation: A hugely large membership turns out to be mismanaged unless some secure methods are employed to manage such co-operatives.
  • In the elections to the governing bodies, money became such a powerful tool that the top posts of chairman and vice-chairman usually went to the richest farmers who manipulated the organization for their benefits.
• Lack of Awareness: People are not well informed about the objectives of the Movement, rules and regulations of co-operative institutions.
  • Studies have shown that almost 90-92% of members of PACS in Uttar Pradesh have never seen copies of the byelaws of their own co-operatives.
• Restricted Coverage: Most of these societies are confined to a few members and their operations extended to only one or two villages.
• Lack of Trained manpower: The Co-operative Movement has suffered from inadequacy of trained personnel.

Steps Taken by the Government:

• New Draft National Cooperative Policy 2023 is being drafted with the aim to deepen co- operatives as a true people-based movement reaching up to the grassroots and develop a cooperative based economy model including giving focus on ‘Make in India’.
• Ministry of Cooperation 2021: The ministry was established for strengthening co-operatives at the grassroot level, working to streamline processes for 'Ease of doing business' for co-operatives and enabling the development of Multi-State Co-operatives (MSCS).
• The Constitution (97th Amendment) Act, 2011 added a new Part IXB regarding the cooperatives working in India.
  • The word “cooperatives” was added after “unions and associations” in Article 19(1)(c) under Part III of the Constitution.
  • This enables all the citizens to form cooperatives by giving it the status of fundamental right of citizens.
  • A new Article 43B was added in the Directive Principles of State Policy (Part IV) regarding the “promotion of cooperative societies”.
  • The subject ‘Cooperative Societies’ is a State subject included in Item 32 of List-II (State List) in the Seventh Schedule of the Constitution.
• National Policy of Cooperatives 2002: It aims at providing all round development of cooperatives and providing necessary support, encouragement and assistance to them so as to ensure that cooperatives societies are an autonomous, self-reliant and democratically managed society. 
• Establishment of National Cooperative Development Corporation (NCDC) in 1962.
• National Council for Cooperative Training (NCCT), which is registered as an autonomous society under the Societies Registration Act, 1860.
• Amendment of Multistate Cooperative Societies (MSCS) Act 2002.
• Computerization of Primary Agricultural Credit Societies (PACS).
• Streamlining education and training needs of cooperative sector.
• Coordination and convergence of various schemes of different Ministries/ Department and issues of cooperatives.
• Credit Guarantee Fund Trust (CGTMSE) has notified non-Scheduled Urban Co-operative Banks, State Cooperative Banks and District Central Cooperative Banks as Member Credit Institutions of the Scheme with specified eligibility criteria. This will increase the reach of the CGTMSE scheme to the cooperative sector and help in providing adequate, affordable and timely credit to cooperatives to promote cooperative-based economic development models.
• Committees established:
  • The Rural Credit Survey Committee in 1954 recommended state participation in cooperatives at all levels.
  • The S.T. Raja Committee was appointed by the Government of India to suggest amendments to the Cooperative Law.

Way Forward:

• First, the powers of the Registrar, Cooperative Society need to be scaled down.
  •  In almost all States, the RCS has become an instrument of inspection and domination, one which imposes uniform by-laws, and amends them when individual societies do not fall in line.
  •  There is a need to transfer work from the RCS to cooperative federations — as in Singapore.
• Second, the rural-urban dichotomy in the regulatory treatment of cooperatives is specious and outdated.
  • Such differences are immaterial when regulation is to be based on the cooperative nature of organisations.
• Third, the regulation and the supervision of cooperative banks should move to a new body from the Reserve Bank of India (RBI) for urban banks and the National Bank for Agriculture and Rural Development (NABARD) for rural banks.
• Fourth, lessons from the Netherlands, where cooperative banks owe their success to a segmented market, are pertinent.
• In India, adopting a multi-agency approach, especially after bank nationalisation, has affected the efficiency of both commercial and cooperative banks.
• Commercial bank-cooperative sector linkages at various levels could alternatively provide better synergies.

Conclusion:

A well-managed and flourishing cooperative sector has a huge potential in catalysing the economy, poverty alleviation and upliftment of the weaker sections of society especially the small and marginal farmers. It will help in achieving the targets of Doubling the Farm Income along with sustainable development. It will ultimately push India towards becoming a $5trillon economy by 2024.

Editorial 2: Centre’s ordinance, Ambedkar’s warning

Context:

• Recently, Centre promulgated ordinance to give powers to two officials over the Chief Minister of Delhi.

About:

• The ordinance making power is the most important legislative power of the Executive exercised by the President and the Governor. It has been vested in them to deal with unforeseen or urgent situations.
• Article 123 of the Constitution grants the President certain law-making powers to promulgate ordinances during the recess of Parliament.
  • These ordinances have the same force and effect as an Act of Parliament but are in the nature of temporary laws.
  • The government is required to bring an Ordinance before Parliament for ratification — and failure to do so will lead to its lapsing “at the expiration of six weeks from the reassembly of Parliament”.
  • The Ordinance may lapse earlier if the President withdraws it — or if both Houses pass resolutions disapproving it. (Rejection of an Ordinance would, however, imply the government has lost majority.)
  • Also, if an Ordinance makes a law that Parliament is not competent to enact under the Constitution, it shall be considered void.
  • Since the President acts on the advice of the Council of Ministers, it is in effect the government that decides to bring the Ordinance. The President may return the recommendation of the Cabinet once if she feels it warrants reconsideration; if it is sent back (with or without reconsideration), she has to promulgate it.
• Article 213 empowers the Governor of a state to promulgate ordinances, when the state legislative assembly (or either of the two Houses in states with bicameral legislatures) is not in session. 

Status of Promulgation of Ordinances:

• Originally intended as an emergency provision, it was used on a regular basis.
  • In the 1950s, central ordinances were issued at an average of 7.1 per year.
  • The number peaked in the 1990s at 19.6 per year, and declined to 7.9 per year in the 2010s.
• State governments also used this provision very often.
  • In that research found out that Bihar had issued 256 ordinances between 1967 and 1981, of which 69 were repromulgated several times, including 11 which were kept alive for more than 10 years.
• Practice did not stop:
  • For example, in 2013 and 2014, the Securities Laws (Amendment) ordinance was promulgated three times.
  • Similarly, Land Acquisition Amendment Ordinance 2014 has been repromulgated twice – in April and May 2015.
  • The Indian Medical Council Amendment Ordinance was issued in September 2018, and reissued in January 2019.
  • Commission for Air Quality Management ordinance 2020 was repromulgated again.
• States using ordinance route:
  • For example, in 2020, Kerala issued 81 ordinances, while Karnataka issued 24 and Maharashtra 21.
  • Kerala has also repromulgated ordinances: one ordinance to set up a Kerala University of Digital Sciences, Innovation and Technology has been promulgated five times between January 2020 and February 2021.

Challenges created:

• Bypassing Legislature: This power is provided to the Executive for emergency requirements, and the law thus made must go through the scrutiny of the legislature.
  • Repromulgation completely bypasses the whole institution of legislature.
  • It implies usurpation of legislative power by the executive.
• Violating Doctrine of Separation of Powers: 
  • In the Kesavananda Bharati case 1973, the Supreme Court listed the separation of powers as a “basic feature” of the Constitution.
     
  • The ordinance mechanism, is only a temporary mechanism when Parliament is not in session; it is not an alternative to parliamentary legislation.
• Non-implementation of Supreme Court’s Judgements: It violated the rule of law in the country.

Judicial Safeguards on re-promulgation of ordinances:

• RC Cooper case (1970) held that the President’s decision to promulgate ordinance could be challenged on the grounds that ‘immediate action’ was not required, and the ordinance had been issued primarily to bypass debate and discussion in the legislature.
• DC Wadhwa case 1986, ruled that repromulgation of ordinances was contrary to the Constitutional scheme.
• In Krishna Kumar Singh case 2017, a seven-Judge Bench of the Supreme Court held that unfettered re-promulgation of ordinances is unconstitutional.

Way Ahead:

• Our Constitution has provided for the separation of powers among the legislature, executive and judiciary where enacting laws is the function of the legislature.
• The executive must show self-restraint and should use ordinance making power only in unforeseen or urgent matters and not to evade legislative scrutiny and debates.

Conclusion:

The principle of Separation of Powers and Checks and balances empowers the legislatures and the courts to check the encroachment of the Executive. However, by allowing for repromulgation of ordinances, the Legislature and the court are abdicating their responsibility to the Constitution. Need of the hour is to exercise executive restraint and reestablish the democratic parliamentary character as envisaged in the constitution preserving the rule of law and democracy in true spirit.