Lok Sabha Question No. 232 (UNSTARRED), answered on 2023-12-05
Subject: Empowerment of Cooperative Sector
Ministry: COOPERATION
Asked by: Pradeep Kumar Singh

## GOVERNMENT OF INDIA MINISTRY OF COOPERATION

## LOK SABHA UNSTARRED QUESTION NO232 TO BE ANSWERED ON 05/12/2023

## Empowerment of Cooperative Sector

## †232SHRI PRADEEP KUMAR SINGH:

## Will the Minister of COOPERATION ( सहकाįरता मंũी ) be pleased to state:

- (a) the  efforts  made  so  far  for  empowerment  of  cooperative  sector  after  the  creation  of separate Ministry of Cooperation;
- (b) the steps taken to deepen the reach of cooperative sector at the grassroots as most of the farmers and villages are associated with the cooperative sector; and
- (c) the  details  of  the  efforts  made  and  measures  undertaken  by  the  Government  in  this regard?

## ANSWER THE MINISTER OF COOPERATION

## सहकाįरता मंũी (SHRI AMIT SHAH)

(a) to (c):In order to achieve the vision of 'Sahakar se Samriddhi', the Ministry of Cooperation has  taken  a  number  of  initiatives  in  consultation  with  various  Ministries/Departments  of  the Government of India, State/UT Governments, National Cooperative Federations, Statutory and Non-Statutory bodies such as NABARD, NDDB, NCDC, NFDB etc. since its formation i.e., 06 th July, 2021.

The details of such initiatives taken and progress made so far is annexed .

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## Ministry of Cooperation

Ministry of Cooperation, since its inception on 6 th July,  2021, has undertaken several initiatives to realize the vision of 'Sahakar-se-Samriddhi' and to strengthen & deepen the cooperative movement from Primary to Apex level Cooperatives in the country. List of initiatives taken and progress made so far are as follows:

## A. Making Primary Cooperatives economically vibrant and transparent

1. Model Bye-Laws for PACS  making them multipurpose, multidimensional and transparent entities : Government, in consultation with all the stakeholders, including States/ UTs,  National Level Federations, State Cooperative Banks  (StCBs),  District Central Cooperative Banks (DCCBs), etc., has prepared and circulated Model Byelaws for PACS to all  the  States/  UTs,which  enable  PACS  to  undertake  more  than  25  business  activities, improve  governance,  transparency  and  accountability  in  their  operations.  Provisions  have also been made to make the membership of PACS more inclusive and broad-based, giving adequate  representation  to  women  and  Scheduled  Castes/Schedules  Tribes.Model  Byelaws have been adopted by 31 States/ UTs so far.
2. Strengthening of PACS through Computerization :  In  order to strengthen PACS, project for Computerization of 63,000 functional PACS with a total financial outlay of ₹2,516 Crore has been approved by the Government of India, which entails bringing all functional PACS in the Country onto a common ERP based national software, linking them with NABARD through  StCBs  and  DCCBs.  A  total  of  62,318  PACS  from  28  States/  UTs  have  been sanctioned under the project. Software is ready and trials have alreadystarted in 5,673 PACS in 26 States/ UTs so far.
3. New  Multipurpose  PACS/  Dairy/  Fishery  Cooperatives  in  uncovered  Panchayats :  A proposal  has  been  approved  by  the  Government  to  set  up  new  multi-purpose  PACS  or primary dairy/ fisheries cooperatives covering every Panchayat/village in the next five years, with support of NABARD, NDDB, NFDB, NCDC and other National level Federations. As reported  by  the  States/  UTs,  the  process  for  registering  9,961new  PACS/  Dairy/  Fishery cooperative societies in 23 States/ UTs is in various stages.
4. World's Largest Decentralized Grain Storage Plan in Cooperative sector : Government has approved a plan to create warehouses, custom hiring centres, primary processing units

and  other  agri-infra  for  grain  storage  at  PACS  level,  by  converging  various  schemes  of Government  such  as  AIF,  AMI,  SMAM,  PMFME,  etc.This  will  reduce  wastage  of  food grains and transportation costs, enable farmers to realize better prices for their produce and meet various agricultural needs at the PACS level itself. 22States/ UTs and National level Cooperative Federations such as National Cooperative Consumers Federation (NCCF) and National  Agricultural  Cooperative  Marketing  Federation  of  India  Ltd.  (NAFED),  have identified  1,711  PACS  for  creation  of  storage  capacity  under  the  Pilot  Project.At  present, construction is going in 13 PACS of 13 States/ UTs under the Pilot Project.

5. PACS as Common Service Centers (CSCs)for better access to e-services : MoU has been signed between Ministry of Cooperation, MeitY, NABARD and CSC e-Governance Services India  Limited  for  providing  more  than  300  e-services  such  as  banking,  insurance,  Aadhar enrolment/  updation,  health  services,  PAN  card  and  IRCTC/  Bus/  Air  ticket,  etc.  through PACS. So far, 24,470 PACS have started providing CSCservices to the rural citizenswhich will also result in increase in income of those PACS at the same time.
6. Formation of new Farmer Producer Organizations (FPOs) by PACS :  Government has allowed 1,100 additional FPOs to be formed by PACS with the support of NCDC, in those blocks  where  FPOs  have not  yet  been  formed  or  the  blocks  are  not  covered  by  any  other implementing agency. This will be helpful in providing the farmers with necessary market linkage and get fair and remunerative prices for their produce.
7. PACS given priority for Retail Petrol/ Diesel outlets : Government has allowed PACS to beincluded in the Combined Category 2 (CC2) for allotment of retail petrol/ diesel outlets.As per information received from Oil Marketing Companies (OMCs), a total of 228 PACS have applied online for retail petrol/ diesel outlets.
8. PACS  given  permission  to  convert  bulk  consumer  petrol  pumps  into  retail  outlets : Based on the discussions with the Ministry of Petroleum and Natural Gas, guidelineshavebeen issued to convert the existing bulk consumer licensee PACS into retail outlets  for  increasing  the  profit  of  PACS  and  generate  employment  opportunities  in  rural areas.  109 PACS from 5 States having wholesale consumer pumps have given consent for conversion into Retail Outlets, out of which 43 PACS have received Letter of Intent (LOI) from the OMCs.
9. PACS eligible  for  LPG  Distributorship  for  diversifying  its  activities :  Government  has now  allowed  PACS  to  apply  for  LPG  Distributorships.This  will  give  PACS  an  option  to increase  their  economic  activities  and  create  new  employment  opportunities  in  rural  areas. Two locations have already been advertisedin the State of Jharkhand.
10. PACS asPM BharatiyaJan Aushadhi Kendra for improving access to generic medicines at rural level :  Government  is  promotingPACS  to  operate  Pradhan  Mantri  Bhartiya JanaushadhiKendras which will provide additional income source to them and provide easy access of generic medicines to rural citizens.So far, 4,289 PACS/ cooperative societies have applied online for PM JanaushadhiKendras, out of which 2,293 PACS have been given initial approval also.
11. PACS  as Pradhan Mantri Kisan Samriddhi  Kendras  (PMKSK): Government is promotingPACS to  operate  PMKSK  for  ensuring  easy  accessibility  of  fertilizer  &  related servicesto  farmers  in  the  country.  As  per  the  information  shared  by  States/  UTs,  28,648 PACS are functioning as PMKSK so far.
12. Convergence  of  PM-KUSUM  at  PACS  level :  Farmers  associated  with  PACS  can  adopt solar agricultural water pumps and install photovoltaic modules in their farms.
13. PACS to carry out O&M of rural piped water supply schemes (PWS) : In order to utilize the reach of PACS in rural areas, on the initiative of the Ministry of Cooperation, Ministry of Jal  Shakti  has  madePACS as eligible agencies  to carry out the Operations & Maintenance (O&M) of PWS in rural areas.As per information received from States/ UTs, 1,381 PACS have been identified by 12 States/ UTs to provide O&M services at Panchayat/ Village level.
14. Micro-ATMs  to  Bank  Mitra  Cooperative  Societiesfor  providing  doorsteps  financial services : Dairy and Fisheries cooperative societies can be made Bank Mitras of DCCBs and StCBs to ensure their ease of doing business, transparency and financial inclusion, MicroATMs are also being given to these Bank Mitra Co-operative Societies with support from NABARD to provide 'Door Step Financial Services'. As a pilot project, 1,723 Micro-ATMs have been distributed to Bank Mitra cooperative societies in Panchmahal and Banaskantha Districts of Gujarat.
15. Rupay Kisan Credit Card to Members of Milk Cooperatives : In order to expand the reach of  DCCBs/ StCBs and to provide necessary liquidity to the members of DairyCooperative

societies,  RupayKisan  Credit  Cards  (KCCs)  are  being  distributed  to  the  members  of cooperativesforproviding  credit  at  comparatively  lower  interest  rates  and  enable  other financial  transactions.As  a  pilot  project,  73,503  Rupay  KCC  have  been  distributed  in Panchmahal and Banaskantha Districts of Gujarat.

16. Formation of Fish Farmer  Producer Organization (FFPO) :  In  order  to  provide  market linkage and providing processing facilities to the fishermen, NCDC hasregistered 69 FFPOs in  the  initial  phase.  Department  of  Fisheries,  Government  of  India  has  further  allocated conversion  of 1000existing  fisheries  cooperative  societies  intoFFPOsto  NCDC,withan approved outlayof Rs225.50 crore.

## B. Strengthening the Urban and Rural Cooperative Banks

17. UCBs have been allowed to open new branches to expand their business: UCBs can now open new branches up to 10% (maximum 5 branches) of the existing number of branches in the previous financial year without prior approval of RBI.
18. UCBs have been allowed by RBI to offer doorstep services to their customers: Door step banking facility  can  now  be  provided  by  the  UCBs.Account  holders  associated  with  these banks  can  now  avail  various  banking  facilities  at  home  such  as  cash  withdrawal,  cash deposit, KYC, demand draft and life certificate for pensioners, etc.
19. Cooperative banks have been allowed to make one-time settlement of outstanding loans, like  Commercial  Banks: Co-operative  banks,  through  board-approved  policies,can  now provide process for technical write-off as well as settlement with borrowers.
20. Time limit increased to achieve Priority Sector Lending (PSL) targets given to UCBs : RBI has extended the timeline for UCBs to achieve Priority Sector Lending (PSL) targets by two years i.e., up to March 31, 2026.
21. A Nodal Officer designated in RBI for regular interaction with UCBs : In order to meet the  long  pending  demand  of  the  cooperative  sector  for  closer  coordination  and  focused interaction, RBI has notified a nodal officer as well.
22. Individual  housing  loan  limit  more  than  doubled  by  RBI  for  Rural  and  Urban  Cooperative Banks:
- a. Housing loan limit of Urban cooperative banks have now been doubled from Rs 30 lakh to Rs 60 lakh.
- b. Housing loan limit of Rural cooperative banks has been increased to two and a half times to Rs 75 lakh.
23. Rural Co-operative Banks will now be able to lend to commercial real estate/ residential housing  sector,  thereby  diversifying  their  business :  This  will  not  only  help  Rural  cooperative banks to diversify their business, but benefit Housing co-operative societies also.
24. License  fee  reduced  for  Cooperative  Banks :  License  fee  for  onboarding  Cooperative Banks to 'Aadhaar Enabled Payment System' (AePS) has been reduced by linking it to the number of transactions.Cooperative financial institutions will also be able to get the facility free of cost for the first three months of the pre-production phase. With this, farmers will now be able to get the facility of banking at their home with their fingerprints.
25. Non-scheduled  UCBs,  StCBs  and  DCCBs  notified  as  Member  Lending  Institutions (MLIs) in  CGTMSE Scheme to increase the share of cooperatives in lending: The cooperative banks will now be able to take advantage of risk coverage up to 85 percent on the loans given. Also, cooperative sector enterprises will also be able to get collateral free loans from co-operative banks now.
26. Notification  of  Scheduling  norms  for  including  Urban  Co-operative  Banks: UCBsthat meet the 'Financially Sound and Well Managed' (FSWM) criteria and have maintained the minimum deposits required for classification as Tier 3 for the last two years are now eligible to  be  included  in  Schedule  II  of  the  Reserve  Bank  of  India  Act  1934  and  get  'Scheduled' status.
27. Monetary ceiling doubled by RBI for Gold Loan: RBI has doubled monetary ceiling from Rs. 2 lakh to Rs.4 lakh, for those UCBs that meet the PSL targets.
28. Umbrella Organization for Urban Cooperative Banks : RBI has accorded approval to the National Federation of Urban Co-operative Banks and Credit Societies Ltd. (NAFCUB) for the  formation  of  an  Umbrella  Organization  (UO)  for  the  UCB  sector,  which  will  provide necessary IT infrastructure and operation support to around 1,500 UCBs.

## C. Relief to Cooperative Societies in the Income Tax Act

29. Surcharge reduced from 12 % to 7% for co-operative societies having income between Rs.  1  to  10  Cr.: Thiswill  reduce  the  burden  of  Income  Tax  on  Cooperative  Societies  and more capital will be available with them to work for the benefit of their members.
30. MAT reduced for cooperatives  from 18.5%  to  15%: With  this  provision,  now  there  is parity between Cooperative Societies and Companies in this regard.
31. Relief in cash transactions under section 269ST of the Income Tax Act: In orderto remove difficulties in cash transactions by cooperatives under Section 269ST of IT Act,Government has issued a clarification that cash transaction of less than Rs. 2 lakhs done by a cooperative society  with its distributor in a day will be considered separately, and will not be charged with income tax penalty.
32. Tax cut for new manufacturing Cooperative societies: Government has decided that a flat lower  tax  rate  of  15%  will  be  charged,  compared  to  an  earlier  rate  of  upto  30%  plus surcharge, for new cooperatives commencing manufacturing activities by March 31, 2024. This will encourage the formation of new cooperative societies in the manufacturing sector.
33. Increase in limit of Cash Deposits and Cash Loans by PACS and PCARDBs: Government has enhanced the limit for Cash Deposits and Cash Loans by PACS and Primary Cooperative Agriculture and Rural Development Banks (PCARDBs) from Rs 20,000 to Rs 2 lakh per member. This provision will facilitate their activities, increase their business and benefit members of their societies.
34. Increase inthe limit of Tax Deducted at Source (TDS) in Cash Withdrawal: Government has increased the cash withdrawal limit of cooperative societies without deduction of tax at source  from  Rs.1  crore  to  Rs.3  crore  per  year.  This  provision  will  save  Tax  Deducted  at Source  (TDS)  for  cooperative  societies,  which  will  enhance  liquidity  of  the  cooperative society.

## D. Revival of Cooperative Sugar Mills

35. Relief from  Income  Tax  to  Sugar  Cooperative  Mills : Government  has  issued a clarification thatSugar cooperative mills would not be subjected to additional income tax for paying  higher  sugarcane  prices  to  farmers  upto  Fair  and  Remunerative  or  State  Advised Price, from April, 2016 onwards.
36. Resolution of decades old pending issues related to Income Tax of Sugar Cooperative Mills :  Government  has  made  a  provision  in  its  Union  Budget  2023-24,  wherein  Sugar cooperatives have been allowed to claim as expenditure their payments to sugarcane farmers for the period prior to assessment year 2016-17, giving a relief of more than Rs.10,000crores.
37. Rs. 10,000 crore loan scheme launched for strengthening of Sugar Cooperative Mills : Governmenthas  launched  a  scheme  through  NCDC  for  setting  up  ethanol  plants  or cogeneration plants or for working capital or for all three purposes.Loan amount of Rs. 3,010 cr. has been sanctioned by NCDC to 24 Cooperative Sugar Mills so far.
38. Preference to Cooperative Sugar Mills in purchase of ethanol : Cooperative Sugar Mills have now been put at par with private companies for ethanol procurement by Government of India under the Ethanol Blending Programme (EBP).
39. Reduction in GST on molasses from 28% to 5%: Government has decided to reduce the GST on molasses from 28% to 5% which will enable cooperative sugar mills to earn more profits for its members by selling molasses to distilleries with higher margins.

## E. Three new Multi-State Societies at the National Level

40. New National Multi-State Cooperative Seed Society for certified seeds : Government has established  a  new  apex  multi-state  cooperative  seed  society  under  the  MSCS  Act,  2002, namely Bharatiya  Beej  Sahakari  Samiti  Limited  (BBSSL)  as  an  umbrella  organization  for quality  seed  cultivation,  production  and  distribution  under  a  single  brand.BBSSL  has received 8,200 PACS/ cooperative societies applications from 27 States/ UTs for membership so far.
41. New National Multi-State Cooperative Organic Society for organic farming : Government  has  established  a  new  apex  multi-state  cooperative  organic  society  under  the MSCS Act, 2002, namely National Cooperative Organics Limited (NCOL) as an umbrella organization to produce, distribute and market certified and authentic organic products.NCOL has received 2,475 PACS/ cooperative societies applications from 24 States/ UTs for membership so far.6 organic products have already been launched by NCOL so far.
42. New National Multi-State Cooperative Export Society for promoting exports : Government  has  established  a  new  apex  multi-state  cooperative  export  society  under  the

MSCS  Act,  2002,  namely  National  Cooperative  Export  Limited  (NCEL)  as  an  umbrella organization  togive  thrust  to  exports  from  cooperative  sector.  NCEL  has  received  2,625 PACS/  cooperative  societies  applications  from  22  States/  UTs  for  membership  so  far.Till date,  NCEL has  got permission to export  14.92 LMT rice to 16 countries and 50,000 MT sugar to 2 countries.

## F. Capacity Building in Cooperatives

43. Establishment  of  the  Cooperative  University: Steps  are  being  taken  by  Ministry  of Cooperation  for  setting  up  of  a  National  Cooperative  Universityfor  Cooperativeeducation, training,  consultancy,  research  and  development  and  a  sustainable  and  quality  supply  of trained manpower.
44. Promotion  of  training  and  awareness  through  National  Council  for  Cooperative Training (NCCT) :  By  increasing  its  reach,  NCCT has conducted 3,287 training programs and provided training to 2,01,507 participants in FY 2022-23.

## G. Use of Information Technology for 'Ease of Doing Business'

45. Computerization  of  the  Central  Registrar's  Office :  Central  Registrar's  office  has  been computerized to create a digital ecosystem for Multi-State Cooperative Societies, which will assist in processing applications and service requests in a time bound manner.
46. Scheme  for  computerization  of  office  of  RCSs  in  States  and  Union  Territories :  To increase'Ease of doing business' for Cooperative Societies and create a digital ecosystem for transparent paperless regulation in all States/Union Territories, a Centrally SponsoredProject for computerization of RCS Offices has been approved by the Government. Grants will be provided for purchase of hardware, development of software, etc. to the States/ UTs.
47. Computerization of Agriculture and Rural Development Banks (ARDBs) : To strengthen the Long-term Cooperative Credit structure, the project of computerization of 1,851 units of Agriculture and Rural Development Banks (ARDBs) has been approved by the Government. NABARD  is  the  implementing  agency  for  the  project  and  will  develop  a  national  level software  for  ARDBs.  Hardware,  support  for  Digitization  of  legacy  data,  training  to  the employees, etc. will be provided under the project.

## H. Other Initiatives

48. New  National  Cooperative  Database  for  authentic  and  updated  data  repository :  A database  of  cooperatives  in  the  country  has  been  prepared  with  the  support  of  State Governments to facilitate stakeholders in policy making and implementation of programmes/ schemes  related  to  cooperatives  across  the  country.  So  far,  data  of  around  7.86  lakh cooperatives has been captured in the database.
49. Formulation of New National Cooperative Policy : A National level committee comprising 49  experts  and  stakeholders  drawn  from  all  over  the  Country  has  been  constituted  to formulate the New National Cooperative Policy for enabling a vibrant ecosystem to realize the vision of 'Sahakar-se-Samriddhi'.
50. Multi-State  Co-operative  Societies  (Amendment)  Act,  2023 :  Amendment  has  been brought  in  the  MSCS  Act,  2002  to  strengthen  governance,  enhance  transparency,  increase accountability,  reform  electoral  process  and  incorporate  provisions  of  97 th Constitutional Amendment in the Multi State Cooperative Societies.
51. Inclusion  of  Cooperatives  as  'buyers'  on  GeM  portal :    Government  has  permitted  the cooperatives  to  register  as  'buyer'  on  GeM,  enabling  them  to  procure  goods  and  services from nearly over 67 lakh vendors to facilitate economical purchases and greater transparency. So far, 559 cooperative societies have been onboarded on GeM as buyers.
52. Expansion of National Cooperative Development Corporation (NCDC) to increase its range and depth : NCDC  has  launched new  schemes in various sectors such as 'SwayamshaktiSahkar' for SHGs; 'Deerghavadhi Krishak Sahkar' for long term agricultural credit and 'Dairy Sahkar' for dairy. Total financial assistance of Rs. 41,024 Crores has been disbursed by NCDC in FY 2022-23, which is almost 20% higher than the disbursement of Rs.34,221 crore in 2021-22. Government of India has permitted NCDC to issue bonds worth ₹2000  crore  with  government  guarantee,  subject  to  the  adherence  of  specified  terms  and conditions. Further, NCDC is setting up sub-offices in 6 North Eastern States - Arunachal Pradesh, Meghalaya, Mizoram, Manipur, Nagaland and Tripura with the objective of taking various national schemes to the cooperative societies at their doorstep.
53. Financial  assistance  by  NCDC  for  Deep  Sea  Trawlers :  NCDC  is  providing  financial assistance for  projects  related  to  deep  sea  trawlers  in  coordination  with  the  Department  of Fisheries,  Government  of  India.  NCDC  has  already  sanctioned  financial  assistance  of  Rs

20.30 crore for purchase of 14 deep sea trawlers for the Fisheries Cooperative Societies of Maharashtra.

54. Refund to Investors of Sahara Group of Societies : A portal has been launched for making payments  to  the  genuine  depositors  of  the  cooperative  societies  of  Sahara  Group  in  a transparent  manner.  Disbursement  have  already  started  after  proper  identification  and submission of proof of their deposits and claims.

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