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Current Affairs

Cooperation ministry

Date: 10 July 2021 Tags: Miscellaneous

Issue

The union government has set up a separate ministry for Cooperation during the recent cabinet expansion process.

 

Background

Previously, there was no separate emphasis on cooperative sector. The subject was under the purview of Ministry of Agriculture.

 

Details

  • The objective of the ministry of cooperation is said to be forming separate administrative and legal framework for strengthening cooperative sector in India.

  • The ministry will work towards developing Multi-State Co-operatives (MSCS) and enable ‘Ease of doing business’ for cooperatives.

 

Cooperative movement

  • They are organization formed by people at the grassroots level to obtain a collective bargaining power for achieving common objectives.

  • Some of the sectors where cooperatives operate are agriculture, spinning mills, sugar mills, dairies etc. They are jointly set up by farmers aiming to process their products.

  • Cooperatives have become particularly important in several streams such as milk production in the country. About 35 percent of sugar is produced through cooperatives.

  • Cooperatives are also involved in financial institutions especially in rural and semi-urban areas to give credit to unorganized sector.

  • The district central cooperative banks (DCCBs) and state cooperative banks sit at the top of structure and control flow of finances in rural areas.

  • Several individuals and sectors can get credit due to the urban cooperative societies, which otherwise not possible under institutional system.

 

Need for ministry

  • Cooperative sector has managed to flourish in only handful of states such as Karnataka, Gujarat and Maharashtra.

  • The funds given in form of working capital and equity have only reached these states. Other states have not been able to get advantage.

 

Political importance

  • Politics of Maharashtra is controlled by cooperatives. They elect the chairman democratically and give rise to new leadership.

  • Winning elections in states such as Maharashtra can only be possible if cooperative sectors can be controlled and influenced.