Lok Sabha Question No. 2487 (UNSTARRED), answered on 2024-08-06
Subject: Creation of New Ministry
Ministry: COOPERATION
Asked by: Dr. Thirumaavalavan Tholkappiyan

## GOVERNMENT OF INDIA MINISTRY OF COOPERATION

## LOK SABHA UNSTARRED QUESTION NO. 2487 TO BE ANSWERED ON 06/08/2024

## Creation of New Ministry

## 2487. DR. THIRUMAAVALAVAN THOLKAPPIYAN:

Will the Minister of COOPERATION ( सहकारिता मंत्री ) be pleased to state:

(a)  whether  the  Government  has  achieved  any  developments  in  formulating  new  policies, programmes, or plans in the area of co-operation after constituting a separate Ministry for Cooperation, if so, the details thereof;

(b) the specific new policies that have been introduced by the Ministry for Co-operation since its inception, and the manner in which these policies have impacted the cooperative sector;

(c)  the  manner  in  which  new  programmes  or  initiatives  launched  by  the  Ministry  for  Cooperation aimed at strengthening and supporting cooperative societies across the country;

(d) the manner in which the creation of a separate Ministry for Co-operation have benefited the cooperative sector the measurable outcomes or improvements have been observed since its establishment; and

(e) the reasons for this lack of progress, and creating a separate ministry?

## ANSWER

## THE MINISTER OF COOPERATION सहकारिता मंत्री (SHRI AMIT SHAH)

(a) to (e) : Yes. A 48-member National Level Committee was constituted on 2 nd September 2022 under the chairmanship of Shri Suresh Prabhakar Prabhu, consisting of experts of the cooperative  sector,  representatives  from  National/State/District/Primary  level  cooperative societies,  Secretaries  (Cooperation)  and  RCSs  from  States/UTs,  officers  from  Central Ministries /Departments to formulate the New National Cooperation Policy. In this regard, the National Level Committee held 17 meetings, and 4 regional workshops throughout the country to elicit suggestions/recommendations, receiving a total of 648 inputs from the consultation process. The draft report on the New National Cooperation Policy, prepared by the National Level  Committee  has  been  received.  The  draft  policy  has  been  prepared  and  is  under finalization.  The policy  is expected  to  facilitate  a  systematic  and  orderly,  all-around development  of  the  cooperative  sector,  focused  on  fast-tracking  the  growth  of  the  rural economy.

The  Ministry  of  Cooperation,  since  its  inception  on  6 th July  2021,  has  taken  many initiatives to strengthen and deepen the cooperative movement at the grassroots level including steps for ease of doing business for various stakeholders of the cooperative sector, such as 'Model Bye-Laws for PACS making them multipurpose, multidimensional and transparent entities', 'Establishing New Multipurpose PACS/ Dairy/ Fishery Cooperatives in uncovered Panchayats',  'World's  Largest  Decentralized  Grain  Storage  Plan  in  Cooperative  sector', 'Computerization  of  the  offices  of  Registrar  of  Cooperative  Societies  of  States/  UTs', 'Computerization of Agriculture and Rural Development Banks (ARDBs)', 'Computerization of functional Primary  Agricultural Credit Societies (PACS)', 'National Cooperative Database',  'Amendment  of  the  Multi-State  Cooperative  Societies  (MSCS)  Act,  2002', 'Reliefs  to  Cooperative  Societies  in  the  Income  Tax  Act',  'Initiatives  for  revival  of Cooperative Sugar Mills', 'Establishment of three new national-level multi-state cooperative societies for seed, organic products and exports', etc.

A brief of 54 initiatives taken by the Ministry since its inception and their status are enclosed in Annexure-I.

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## Brief of 54 initiatives taken by the Ministry of Cooperation

Ministry of Cooperation, since its inception on 6th 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. The 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. So far, 32 States/ UTs have adopted Model Byelaws or their existing byelaws are in line with Model Byelaws.
2. Strengthening of PACS through Computerization :    In  order  to  strengthen PACS, the project for Computerization of 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 67,009 PACS from 30 States/ UTs have been sanctioned under the project. The hardware has been procured by 28 States/UTs. A total of 25,674 PACS have been onboarded on ERP Software and 15,207 PACS have gone live.
3. Establishing  New  Multipurpose  PACS/  Dairy/  Fishery  Cooperatives  in uncovered Panchayats : The plan for establishing new multipurpose PACS or primary dairy/ fisheries cooperatives covering all the Panchayats/ villages in the next five years, with support of NABARD, NDDB, NFDB, NCDC and other National level Federations has been approved by the Government. As per the National Cooperative Database, a total of 6,844 new PACS, Dairy and Fishery cooperative societies have been registered across States/ UTs.
4. World's  Largest  Decentralized  Grain  Storage  Plan  in  the  cooperative sector :  The  Government has approved a plan to create warehouses, custom hiring centers, primary  processing  units  and  other  agri-infrastructure  for  grain  storage  at  the  PACS  level, through the convergence of various GOI schemes, including AIF, AMI, SMAM, PMFME, etc. This will reduce the 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. Under the Pilot Project, godowns have been constructed in 11 PACS of 11 States and the Pilot is now being extended to 500 additional PACS.
5. PACS as Common Service Centers (CSCs) for better access to e-services : An MoU has been signed between Ministry of Cooperation, MeitY, NABARD and CSC eGovernance 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, 37,169 PACS have started providing CSC services to rural citizens which will also increase the income of these PACS.
6. Formation of new Farmer Producer Organizations (FPOs) by PACS : The 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.  Apart  from  this,  992  FPOs  have  been  formed  in  the cooperative sector by NCDC. This will be helpful in providing farmers with necessary market linkages and getting fair and remunerative prices for their produce.
7. PACS given priority for Retail Petrol/ Diesel outlets : The Government has allowed PACS to be included in the Combined Category 2 (CC2) for allotment of retail petrol/ diesel outlets.   As per information received from Oil Marketing Companies (OMCs), more than 270 PACS from 25 States/UTs 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, guidelines have been issued to convert the existing bulk consumer licensee PACS into retail outlets to increase the profit of PACS and generate employment opportunities in rural areas. 109 PACS from 4 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 : The 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.  From  four States/  Union Territories,  a total  of 31  PACS have submitted online applications.
10. PACS  as  PM  Bharatiya  Jan Aushadhi  Kendra  for  improving  access  to generic medicines at the rural level : The Government is promoting PACS to operate Pradhan Mantri Bhartiya Janaushadhi Kendras which will provide additional income source to them and  ease  access  to  generic  medicines  for  rural  citizens.  So  far,  4,341  PACS/  cooperative societies have applied online for PM Bhartiya Janaushadhi Kendras, out of which 2,594 PACS have been given initial approval by PMBI and 674 have received drug licences from State Drug Controllers which are ready to function as PM Bhartiya Jan Aushadhi Kendras
11. PACS  as  Pradhan  Mantri  Kisan  Samriddhi  Kendras  (PMKSK) :  The Government is promoting PACS to operate PMKSK to ensure easy accessibility of fertilizer & related services to farmers in the country. As per the information shared by States/ UTs, 38,141 PACS are functioning as PMKSK.
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  deep  reach  of  PACS  in  rural  areas,  on  the  initiative  of  the  Ministry  of Cooperation,  Ministry  of  Jal  Shakti  has  made  PACS  as  eligible  agencies  to  carry  out  the Operations & Maintenance (O&M) of PWS in rural areas. As per information received from States/ UTs, 1,833 PACS have been identified/ selected by 16 States/ UTs to provide O&M services at Panchayat/ Village level.
14. Micro-ATMs to Bank Mitra Cooperative Societies for providing doorstep 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, micro-ATMs 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, about 2,700 micro-ATMs have been distributed to Bank Mitra cooperative societies in Panchmahal and  Banaskantha  Districts  of  Gujarat.  This  initiative  is  now  being  implemented  in  all  the Districts of the State 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 Dairy Cooperative societies, Rupay Kisan Credit Cards (KCCs) are being distributed to the members of cooperatives for providing credit at comparatively lower interest rates and to enable them to carry  out  other  financial  transactions.  So  far,  48,000  Rupay  KCC  have  been  distributed  in Panchmahal and Banaskantha Districts of Gujarat. This initiative is now being implemented in all the Districts of the State of Gujarat.
16. Formation  of  Fish  Farmer  Producer  Organization  (FFPO) :  In  order  to provide market linkage and processing facilities to fishermen, NCDC has registered 69 FFPOs in the initial phase. In addition, the Department of Fisheries, Government of India has allocated the work of converting 1000 existing fisheries cooperative societies into FFPOs to NCDC, with an approved outlay of Rs. 225.50 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: Doorstep banking facilities can now be provided by UCBs. Account holders of these banks can now avail of 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  settlements  of outstanding  loans,  like  Commercial  Banks:  Co-operative  banks,  through  board-approved policies, can now provide the process for settlement with borrowers, along with technical writeoff.

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.

22. Individual housing loan limit more than doubled by RBI for Rural and Urban Cooperative Banks:

a. Housing loan limit of Urban Cooperative Banks has now been doubled from Rs. 30 lakhs to Rs. 60 lakhs.

b. Housing loan limit of Rural Cooperative Banks has been increased to two and a half times to Rs. 75 lakhs.

23. Rural Cooperative 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 will benefit Housing cooperative societies also.

24. License  fee  reduced  for  Cooperative  Banks:  License  fee  for  onboarding Cooperative Banks to the '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 homes through biometrics.

25. Non-scheduled  UCBs,  StCBs  and  DCCBs  notified  as  Member  Lending Institutions (MLIs) in the CGTMSE Scheme to increase the share of cooperatives in lending: 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 be able to get collateral-free loans from cooperative banks now.

26. Notification  of  Scheduling  norms  for  including  Urban  Cooperative  Banks: UCBs  that  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 the monetary ceiling from Rs. 2 lakhs 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 operational 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.: This will 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 order to remove difficulties in cash transactions by cooperatives under Section 269ST of IT Act, the Government has issued a clarification that cash transactions 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:  The  Government  has decided that a flat lower tax rate of 15% will be charged, compared to an earlier rate of up to 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: The 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 in the limit of Tax Deducted at Source (TDS) in Cash Withdrawal: The 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 their liquidity.

## D. Revival of Cooperative Sugar Mills

35. Relief  from  Income  Tax  to  Sugar  Cooperative  Mills:  The  Government  has issued a clarification that cooperative sugar mills would not be subjected to additional income tax for paying higher sugarcane prices to farmers up to 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:  The  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 the assessment year 2016-17, giving them a relief of more than Rs.10,000 crore.

37. Rs. 10,000 crore loan schemes launched for strengthening of Sugar Cooperative Mills: The Government has launched a scheme through NCDC for setting up ethanol plants or cogeneration plants or for working capital or all three purposes. A loan amount of Rs. 5746.76 cr. has been sanctioned by NCDC to 36 Cooperative Sugar Mills so far.
38. Preference to Cooperative Sugar Mills in the purchase of Ethanol: Cooperative Sugar Mills have now been put at par with private companies for ethanol procurement by the Government of India under the Ethanol Blending Programme (EBP).
39. Reduction in GST on molasses from 28% to 5%: The Government has decided to reduce the GST on molasses from 28% to 5% which will enable cooperative sugar mills to earn more profits for their members by selling molasses to distilleries with higher margins.

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

40. New National Multi-State Cooperative Seed Society for certified seeds : The 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 so far has planted breeder seeds of Wheat, Mustard, and Pulses (Gram, Pea) on 366 hectares of land during the Rabi season. Similarly, during the Kharif season breeder seeds of Peddy, Moong, Soybean, Groundnut, Jowar and Guar have been planted on 148.26 Hectare land. As on date, 11714 PACS/ Cooperative Societies have become members of BBSSL.
41. New  National  Multi-State Cooperative  Organic  Society for organic farming : The 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. As on date 3,775 PACS/ cooperative societies have become member of NCOL. So far, 12 organic products have been launched by NCOL under 'Bharat Organics' brand.
42. New  National  Multi-State  Cooperative  Export  Society  for  promoting exports : The 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 to give thrust to exports from cooperative sector. As on date, about 7700 PACS/ cooperative societies have become member of NCEL. A total of 8,15,007 metric tonnes of commodities have been exported by NCEL. Out of which 8,01,790 metric tonnes of rice, 7,685 metric tonnes of onions, 4507 metric tonnes of sugar, 1025 metric tonnes of wheat have been exported.

## F. Capacity Building in Cooperatives

43. Promotion  of  training  and  awareness  through  National  Council  for Cooperative Training (NCCT) : By increasing its reach, NCCT has conducted 3,619 training programs and provided training to 2,21,478 participants in FY 2023-24. From April to June 2024, NCCT has conducted 494 programmes against the quarterly target of 435 programmes and trained 19,591 participants against the target of 10875 participants.

44. Establishment of a Cooperative University : Cabinet Note has been prepared by  the  Ministry  of  Cooperation  for  setting  up  a  national-level  cooperative  university  for cooperative education, training, consultancy, research and development and a sustainable and quality supply of trained manpower.

## 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  businesses  for  Cooperative  Societies  and  create  a digital  ecosystem  for  transparent  paperless  regulation  in  all  the States/  Union Territories,  a Centrally Sponsored Project 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) spread across 13 States/ Union  Territories  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. So far, proposals from 10 States/UTs have been received and sanctioned. Further, GOI share amounting to Rs 4.26 crore was released to 8 States/UTs in FY 2023-24 and FY 2024-25 for procurement of hardware, digitization and setting up of support system.

## 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 8.09 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 the 97th Constitutional Amendment in the Multi-State Cooperative Societies.
51. Inclusion  of  Cooperatives  as  'buyers'  on  GeM  portal :    Government  has permitted cooperatives to register as 'buyer' on GeM, enabling them to procure goods and services from 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 'Swayamshakti Sahkar' for SHGs; 'Deerghavadhi Krishak Sahkar' for long term agricultural credit and 'Dairy Sahkar' for dairy. Total financial assistance of Rs. 60,618.47 Crores has been disbursed by NCDC in FY 2023-24. NCDC has disbursed Rs.19,287.17 crore so far in the financial year 2024-25. 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.  Various  financial  assistances  have  been sanctioned  by  NCDC  such  as;  Rs.  11.55  crores  for  purchase  of  14  deep  sea  trawlers  in Maharashtra at a block cost of Rs 20.30 crores, Rs 37.39 crores to Rajmata Vikas Macchimar Sahakari Sanstha Limited, Mumbai for setting up a seafood processing unit at a Block Cost of Rs.46.74  crores,  Rs.  32.69  crores  for  Integrated  Fisheries  Development  Project  (IFDP)  of Government of Kerala and NCDC has sanctioned the proposal of Shri Mahavir Macchimar Sahakari Mandali Limited, Gujarat for purchasing 30 deep sea trawlers with a block cost of Rs.36.00 crores.
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.  Disbursements  have  already  started  after  proper  identification  and submission of proof of their deposits and claims.

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