Lok Sabha Question No. 5284 (UNSTARRED), answered on 2026-03-24
Subject: Grants to Cooperative Institutions
Ministry: COOPERATION
Asked by: Smt. Geniben Nagaji Thakor

## GOVERNMENT OF INDIA MINISTRY OF COOPERATION

## LOK SABHA UNSTARRED QUESTION NO.   5284 TO BE ANSWERED ON  24 th  MARCH, 2026

## Grants To Cooperative Institutions

## 5284. Smt. Geniben Nagaji Thakor:

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

- (a) Whether  the  Government-aided  cooperative  institutions  like  milk  unions,  cooperative banks,  APMCs  and  federations  receive  Government  land,  grants,  tax  exemptions, regulatory protection or budgetary support;
- (b) If so, whether such institutions are still outside the purview of the Right to Information Act, 2005;
- (c) Whether the Government is aware of the fact that these cooperative institutions manage public resources worth thousands of crores of rupees without mandatory transparency or independent public audit;
- (d) Whether the Government has examined that the lack of transparency has led to unfair expenditure, political capture and erosion of member-centric governance; and
- (e) Whether  the  Government  proposed  to  bring  such  cooperative  institutions  under  the purview of the Right to Information Act in the interest of democratic accountability?

## ANSWER

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

(a):    Milk  Unions,  Cooperative  banks, APMCs  and  State  federations  etc  come  under  the purview of State Governments. The State Government extends financial assistance, including grants and other forms of support, to these cooperatives in accordance with their respective rules and regulations through various schemes of State. Additionally, Government of India, give benefits to cooperatives through various central sector and centrally sponsored schemes such  as  National  Programme  for  Dairy  Development  (NPDD),  Atmanirbharta  Abhiyan, Sustainable Alternative Towards Affordable Transportation (Satat) Mission, Pradhan Mantri Matsya Sampada Yojana (PMMSY) etc.

(b):  The  applicability  of  the  Right  to  Information Act,  2005  to  cooperative  institutions  is governed by Section 2(h) of the Act, under which only those institutions which are substantially financed by the appropriate Government fall within its purview.

(c) to (d): The Multi-State Cooperative Societies (MSCS) (Amendment) Act & Rules, 2023 have  been  notified  on  03.08.2023  and  04.08.2023,  respectively  to  strengthen  governance, enhance transparency, increase accountability and reform electoral process, etc. in the Multi State Cooperative Societies by supplementing existing legislation and incorporating the provisions of Ninety-seventh Constitutional Amendment.  Many provisions have been introduced through the above amendment to enhance transparency in the functioning of cooperative societies, inter-alia: -

- i. To ensure timely, regular and transparent conduct of elections in the multi-State cooperative  societies,  provision  of  Cooperative  Election  Authority  has  been included.
- ii. Appointment of Co-operative Ombudsman by Central Government to provide a mechanism to address grievances of members.
- iii. To  improve  transparency,  appointment  of  Information  Officer  by  multi-State cooperative societies to provide information to members.
- iv. Audit reports of Apex multi-State co-operative societies to be laid in Parliament to improve transparency.
- v. Accounting  and  auditing  standards  for  multi-State  cooperative  societies  to  be determined  by  Central  Government  to  ensure  uniformity  in  accounting  and auditing.
- vi. To improve governance and transparency, annual report of multi-State cooperative societies to include Board decisions which are not unanimous.
- vii. Central Government to determine prudential norms (liquidity, exposure, etc.) for multi- State co-operative societies in the business of thrift and credit.
- viii. To curb nepotism and favoritism in multi-State co-operative societies, the Director of a multi-State cooperative society shall not be present in the discussion and vote on matters where he or his relatives are an interested party.
- ix. Additional grounds for disqualification for directors have been made to improve governance.
- x. Provisions for Investment of funds by the multi-State cooperative societies have been redefined to ensure safer investments and remove references to colonial era securities.
- xi. To have more financial discipline and transparency, the board of multi-State cooperative  societies  to  constitute  Committee  for Audit  and  Ethics  amongst  other committees.
- xii. For strengthening governance, criteria for appointment of Chief Executive Officer (CEO) stipulated.
- xiii. To enhance democratic decision making in the multi-State cooperative societies, quorum has been prescribed for board meetings.
- xiv. Central Registrar to conduct inquiry if he gets information that business is being conducted in a fraudulent manner or for unlawful purposes.
- xv. If registration obtained by misrepresentation, fraud, etc., provision for winding up of a multi-State cooperative society after giving opportunity of being heard.
- xvi. To discourage members from acting against collective interests of the multi-State co- operative societies, the minimum period of expulsion of an expelled member of a multi- State co-operative society has been increased from 1 year to 3 years.
- xvii. To  prevent  a  few  members  only  benefitting  from  resources  of  the  society, Institutions  with  majority  equity  shares  held  by  the  members  of  multi-State  cooperative  societies  or  their  relatives,  would  not  be  considered  as  subsidiary institution.
- xviii. A provision for Concurrent Audit has been introduced for Multi-State Cooperative Societies  with  turnover/deposits  of  more  than  500  crore  rupees  from  a  panel  of auditors  approved  by  the  Central  Registrar.  Concurrent  audit  will  ensure  early detection of fraud or irregularities, if any, so that prompt course corrections can be made.

As  per the provisions of Section 70 of the Multi-State Cooperative Societies  Act, 2002, every multi-State co-operative society is required to appoint an auditor or auditors at each Annual General Meeting. Such auditors or auditing firms are to be selected from a panel approved by the Central Registrar. The auditor so appointed is required to submit the audit report to the multi-State co-operative society within six months from the closure of the financial year to which the accounts relate.

Further,  as  per  Section  72  of  the  Multi-State  Cooperative  Societies Act,  2002,  no  person shall be qualified for appointment as an auditor of a multi-State co-operative society unless he is a Chartered Accountant within the meaning of the Chartered Accountants Act, 1949.

(e): The existing provisions of the RTI Act already cover such institutions wherever they meet the  criteria  of  substantially  financed  by  Government.  Further,  a  provision  under  amended section 106 of Multi-State Cooperative Societies Act, 2002 (as amended in 2023) has been made to appoint Cooperative Information Officer by all multi-State cooperative societies to provide information relating to affairs and management of the society to the members of the society.

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