Kerala opposes Multi-State Cooperative Societies (Amendment) Bill, says it's against federal system

New Delhi: The Kerala government on Friday strongly opposed the Multi-State Cooperative Societies (Amendment) Bill passed by the Lok Sabha recently, alleging that the BJP-led government was trying to sabotage the country's federal system through the new legislation.

Cooperation Minister VN Vasavan said the Central government's new amendment to the legislation was an attempt to steal the freedom granted to the states under the Constitution.

His statement came days after the Lok Sabha passed the bill, which seeks to strengthen cooperatives by making their functioning more transparent, introducing a system of regular elections, and prohibiting the appointment of related persons.

Piloting the bill on July 25, Union Cooperation Minister Amit Shah said the provisions in the bill will initiate a new era for the sector that has been ignored by the previous governments. The bill was later approved by the Lok Sabha by voice vote amid the din after a short discussion in which only three members participated.

The bill seeks to establish a 'Cooperative Election Authority' with a view to introduce electoral reforms in the cooperative sector.

Criticising the provisions of the bill, Vasavan said the new amendment was brought to overcome the setback the Central government suffered in the Supreme Court.

The Centre's approach undermines democracy, the minister said in a statement here.

Noting that the state governments will have no control over multi-state cooperatives if the legislation comes into force, the minister said it even prevents the primary obligation of cooperative societies to provide security for investments or to extend credit to the common man.

He said the Central government has also included provisions under which even statutory societies functioning under state cooperative registrars can be abolished and converted into multi-state societies.

"As per the provisions of the new bill, any cooperative society can be converted into a multi-state society by decision of the governing body and by a majority vote in the general body meeting," the Kerala minister alleged.

Narrating other provisions in the amendments that allegedly undermine the federal structure, Vasavan said, with this bill, the primary purpose of the cooperatives will be lost and they will become inaccessible to the common man and small farmers.

He also alleged that cooperative societies will become similar to the new generation commercial banks, which, according to him, work only for financial gain.

The minister said the new amendment will adversely affect the state cooperative sector, which is doing good work for the common people.

"This is an assault on the freedom of the states. The amendments are a threat to the cooperative societies that have become a model for the sector," Vasavan said, adding that they should be strongly opposed.

In January, the Central Government decided to establish three new multi-state cooperative societies to promote organic products, seeds, and exports.

Replying to the debate in Lok Sabha, Shah said the government has come out with model bye-laws for cooperative societies, which have been adopted by all states with the exception of West Bengal and Kerala.

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