Krishna Kumar Gupta
( Retd) Chief General Manager of NABARD
Sanjay Verma, Editor, Coop Talks, comes up with thought-provoking questions on various issues confronting National Cooperative Policy.
1. The Government has announced new National Cooperative Policy recently. To what extent it is different from the last National Policy.
The earlier National Policy on Cooperatives, 2002, undertook a review of the developments in cooperative sector, identified the constraints affecting the growth of the sector and mentioned the Basic Cooperative Principles in the context of which it identified the need for a National Policy and its objectives. In the backdrop of all these aspects, it laid down various broad policy perspectives to be pursued by the Government. The National Cooperation Policy, 2025, document mentions the recent initiatives of the Government for development of cooperatives and moves on to define the Vision, Mission and Objectives of the Policy; it lays down Strategic Missions under six pillars namely ‘Strengthening the Foundation’ of the cooperative movement; ‘Promoting Vibrancy by Creating a self-sustaining ecosystem’; ‘Making Cooperatives Future Ready’; ‘Promoting Inclusivity and Deepening Reach‘; ‘Entering New and Emerging Sectors’ and ‘Shaping Young Generation for Cooperative Growth’. The policy Document defines 16 objectives within these six pillars of Strategic Missions and specifies the strategies to achieve each of these objectives. Thus, while the earlier Policy identified various policy aspects to be taken up, the new Policy focusses on various strategies to achieve the specified objectives over a period of ten years.
2. Do you think the Policy has addressed all the major issues confronting the cooperative sector? Which are the areas you think have not been addressed ?
While stressing upon the vision of ‘Sahkar-se-Samriddhi’ the new Policy has not defined the deficiencies in the cooperative system that it addresses to ameliorate; rather it has assumed the same and has straight away gone into the specifics of the strategies to achieve the aforesaid Vision. Probably, the Committee for drafting this policy considered it appropriate to define the focus areas for strengthening the cooperative movement through its aforementioned six Strategic Mission Pillars. The structure of the cooperative movement across the geographical expanse of our country is so variant and issues are also so divergent that capturing each and every aspect of development of the cooperative movement in entire country would be a herculean task. Yet, there are some of the major aspects which have not been given adequate stress in the new Policy. The Governance System is one of the major issues but the Policy has merely made a mention of ‘….legal and regulatory environment through timely reforms to provide (inter alia)… good governance’. It does not define specific strategies for addressing the currently prevailing ills of the governance System in cooperatives. Similarly, in respect of professionalism where much is needed to match with the evolving challenges in the national economy, the only mention in the policy is ‘Promote a higher level of professionalism in fostering responsive governance, leadership, and employee competence through technology-enabled recruitment reforms’. The professionalism is not mere a factor of recruitment; the Policy needed to deal with this aspect with more clearly defined strategies. Paragraph 3.2 of the Policy speaks of ‘To foster accessible, affordable finance and equal business opportunities akin to other economic institutions’; it is needless to stress that large scale needs of raising finance by the cooperatives to meet the burgeoning demand of finance for their members would revolve around the pivot of the capital resources. However, the capacity of the cooperatives to raise the capital merely from their members is freezing fast. To elaborate the matter, the subscribed share capital of the State Cooperative Banks and District Cooperative Banks in the country as a whole is Rs 9,263 crore and Rs 24,472 crore respectively as per the statistics published by NABARD for 2021-22. But the share capital of PACS in the country, collected from the farmer-members is Rs 221.90 crore only as of 31 March 2023 as reported by NAFSCOB and it has remained stagnant for last five years. PACS being the major members of DCCBs, which have contributed the share capital of the DCCBs on such a large scale and the ways in which these capital resources have been raised, is a subject matter of deliberations. Even if the membership of the PACS has s enhanced substantially by way of concerted efforts, the increase in the absolute amount of the paid up share capital will not be as substantial in relation to the credit demand. Moreover, the PACS are encouraged to take membership of various national level cooperatives; it is debatable as to the competence of PACS for the same and the sources of funds therefor. Furthermore, the new Policy lays stress on ‘Cooperation among the Cooperatives’; under this principle of cooperation, the State Cooperative Banks and / or the proposed National Cooperative Bank should be enabled to take care of entire gamut of financial services of the cooperatives including the national level cooperatives for all domestic and international financial services requirements. However, the present position is that the State Cooperative Banks are not in a position to provide all kinds of banking services of organisations like NAFED, IFFCO, KRIBHCO, AMUL or the recently established three National level cooperatives namely —– and a considerable amount of their financial services needs are being met form the commercial banks. The new Policy provides no enablers to achieve such a financial cooperation among the cooperatives. There may be a few more such areas for development of cooperatives in the next ten years’ span considered by the Policy which need to be identified and addressed appropriately. The Policy has highlighted the need for setting up of more cooperative societies so as to provide a larger coverage but it must also consider about the consolidation of the cooperatives wherever the strong symptoms of sickness are continuing for a long period and where the revival thereof has remote chances.
3. Amongst the various provisions of National Cooperative Policy, which do you think are significant ?. Any innovative or far-sighted provision ?
The National Cooperation Policy, 2025, provides various provisions significant in the current economic situation and the perceived role of cooperative institutions in the medium term foreseen economic scenario. ‘Making the Cooperatives Future Ready’ is a very promising strategic pillar that focuses on digitisation of cooperative system. ‘Entering into New and Emerging Sectors’ is yet another strategic pillar that builds upon the role of cooperatives in a wider economic canvas. However, the provisions relating to the ‘Shaping Young Generation for Cooperative Growth’ are most endearing to me as it would invigorate the cooperatives with the young blood, fresh thoughts and inculcate contemporary / futuristic appropriate technology based decision-making process in cooperative institutions. I would consider the provisions relating to the implementation and monitoring mechanism over a period of ten years also as a significant self-commitment for growth and development of cooperatives.
4. The Policy has key provisions related to youth participation? To what extent they are important?
The provisions relating to the participation of youth are significant for continuity and revival of the cooperatives as also to keep the cooperatives relevant for the rural society and economy. There are signs of advancing average age of people associated with the agriculture and the cooperatives that leads to the conclusions on decreasing interest of the youth in cooperatives. The youth of today is more informed, knowledgeable and tech-savvy on account of increasing exposure to and widening infrastructure and scope of the information technology based services. To repeat, the greater involvement of youth would invigorate the cooperatives with the young blood, fresh thoughts and inculcate contemporary / futuristic appropriate technology based decision-making process and make them ‘Future Ready’ fast.
5. Will the Policy achieve the goal of building ‘ Viksit Bharat ‘? Your views please.
The cooperatives are going to play a larger role than today in the rural economy as the rural canvass is opening fast for new and emerging sectors other than the agriculture-based activities. The strong cooperatives would not only lead to a much larger role in the traditional agricultural sectors but also in all new sectors like the infrastructure, transport, tourism, education, industry and so on emerging in the rural areas for which the new Policy has provision. Therefore, I am of a firm conviction that the new Policy would surely encourage the contribution of cooperative institutions in the building process towards ‘Viksit Bharat’.
6. As compared to the earlier Policy, this Policy has a definite implementation and monitoring mechanism? Will this lead to effective implementation? What extent the Centre-State cooperation will be important?
As compared to the earlier Policy that highlighted certain aspects of developing the cooperative institutions, the new Policy has a definite time framework of ten years and it has provided for a specific implementation and monitoring mechanism that involves not only the central machinery but also the States in implementation process. This is significant as the cooperation still remains the State subject and the role of the Central Government is in relation to the national level and multi-State cooperative organisations. Yet, the Central Government is concerned for the development of cooperatives in the country as a whole for the sake of food security and the rural development. The concerns of the Central Government have to be appreciated by the States. The Policy proposes for creating a conducive legal and regulatory environment through timely reforms and the State Government are to be encouraged for suitably amending their respective Cooperative Societies Acts and Rules to provide greater autonomy, enhance the ease of doing business and the good governance. The Policy also proposes for ncouragpng States to formulate/reformulate their State Cooperative Policy, in a manner that both State and Central Governments work towards common goals for the development of cooperatives. The States would also be required to undertake certain other measures like complete digitisation of offices of their RCS, establishing a State database of cooperative societies, establishing an institutional mechanism for the revival of sick cooperatives, convergence of various programmes and schemes related to cooperatives etc. The effective implementation of the new Policy will, therefore, need the Centre-State cooperation as a pre-requisite for successful implementation of the new Policy. It is with this intention that the Implementation and Monitoring Mechanism has emphasised upon the Centre-State Cooperation and Coordination.
7. What is the important message and take-away of the new National Cooperative Policy? Does it have a futuristic and visionary outlook ?
The cooperative movement is relevant for attaining the goals of ‘Viksit Bharat’ and, therefore, the growth and development of the cooperative sector is necessary. The new Policy perceives to strengthen the cooperatives within a time-span of ten years to make them ’Future Ready’ for their contribution to the Viksit Bharat’ economy. An all-round development of the cooperatives is necessary and that could be achieved through appropriate support and coordination between the Central and the State Governments. The policy promotes inclusive participation of women, youth, SC/STs in the cooperative institutions. The inner strengthening of the existing institutions through legal reforms, digitalization, and financial empowerment as also the expansion of the primary cooperatives to have access in each village of the country and entry of cooperatives new and emerging sectors while strengthening their traditional agricultural sector base are some of the important perceptions in the new Policy that would be leading the cooperatives towards attaining larger role in the rural economy and lead the rural India towards an al-round prosperity.
