Manmohan for more freedom for co-operatives

By Our Economy Bureau | 17 Nov 2004

New Delhi: The UPA government will soon bring a constitutional amendment to ensure for the cooperative societies their rights to election, autonomous management and independent professional audit, the prime minister, Manmohan Singh, said here on Tuesday.

Announcing this at a function organised by the National Cooperative Development Corporation for the presentation of its biennial awards for excellence to 34 co-operative societies, Singh said that the amendment would incorporate in the constitution the three key words for the empowerment of cooperatives - `voluntary,'' `democratic'' and `autonomous'' - along with these three rights so that no state law would be able to abrogate them.

He said that his government was committed to restoring full independence to co-operatives so that they work according to the spirit of the co-operative movement and serve as effective institutions for people''s participation in development and equitable distribution of income.

"Undue interference on the part of government is apt to hamper the fundamental initiative for collective endeavour and ''cooperative enterprise''. Independence and autonomy have to be granted to co-operatives to enable them to evolve into efficient, professional democratic organisations. We have to ensure that no distortions of these fundamental principles are allowed to occur. I would, therefore, urge that in the interest of healthy growth and existence of co-operatives, democratic management be restored, both in their management and business affairs," the Prime Minister said.

Singh also informed the gathering that a task force has already been set up to recommend an action plan for reviving rural cooperative banking institutions. The task force would also recommend an appropriate regulatory framework and measures for improving the efficiency and viability of the cooperative banking sector. Its report is expected very shortly, he said. These steps, he said, were necessary as corporate governance and internal and external accountability were some of the weak links in the cooperative movement. Amplifying further, Dr Singh said, "In this respect, the recent sagas of failures of high profile urban co-operative banks is not exactly a shining example of governance. Never before has the need for restoring customer confidence in the cooperative sector been felt more acutely than at present."

As an advice, Singh said that co-operatives "have to now devise a system of cooperative corporate governance for ensuring relevance as well as performance. In fact, the very definition of corporate governance implies conducting business in accordance with the well-being of all the stakeholders'' desires that generally leads to value generation, while keeping intact the basic rules of equity and participation."