Strengthening Governance and Transparency in Multi-State Cooperative Societies: Comprehensive Reforms Introduced
Key Highlights
- Total Registered Societies: 1702 across India; Maharashtra leads with 691.
- Non-Functional Societies: 100, with the highest liquidation cases in Rajasthan (26).
- Concurrent Audits: Mandated for societies with turnover exceeding ₹500 crore.
- Transparency Measures: Appointment of Ombudsman, Information Officers, and tabling audit reports in Parliament.
In a significant move to enhance transparency, accountability, and governance, the Government of India has undertaken comprehensive amendments to the Multi-State Cooperative Societies (MSCS) Act and Rules. These reforms aim to address issues of mismanagement, financial irregularities, and governance lapses, ensuring a robust framework for the smooth operation of multi-state cooperative societies across the country.
State of Multi-State Cooperative Societies in India
As of November 28, 2024, 1702 Multi-State Cooperative Societies (MSCS) are registered under the MSCS Act, spanning various states and union territories. Maharashtra leads with 691 societies, followed by Uttar Pradesh (183) and Delhi (166). At the other end, smaller states like Arunachal Pradesh, Nagaland, and union territories like Goa and Chandigarh have just one society each.
Of these, 100 societies are currently non-functional and undergoing liquidation proceedings. Rajasthan has the highest number under liquidation at 26, followed by Uttar Pradesh with 12 and Odisha with 11.
Of these, 100 societies are currently non-functional and undergoing liquidation proceedings. Rajasthan has the highest number under liquidation at 26, followed by Uttar Pradesh with 12 and Odisha with 11.
Table 1: List of registered Multi State Cooperative Societies in different states/ Union territories in the country under MSCS Act as on 28th November, 2024.
|
State/UT Name
|
Societies
|
|---|---|
|
Andhra Pradesh
|
23
|
|
Arunachal Pradesh
|
1
|
|
Assam
|
6
|
|
Bihar
|
21
|
|
Chandigarh
|
1
|
|
Chhattisgarh
|
8
|
|
Delhi
|
166
|
|
Goa
|
1
|
|
Gujarat
|
49
|
|
Haryana
|
22
|
|
Himachal Pradesh
|
2
|
|
Jammu And Kashmir
|
2
|
|
Jharkhand
|
11
|
|
Karnataka
|
40
|
|
Kerala
|
77
|
|
Madhya Pradesh
|
31
|
|
Maharashtra
|
691
|
|
Manipur
|
4
|
|
Nagaland
|
1
|
|
Odisha
|
20
|
|
Puducherry
|
5
|
|
Punjab
|
26
|
|
Rajasthan
|
74
|
|
Sikkim
|
1
|
|
Tamil Nadu
|
141
|
|
Telangana
|
14
|
|
The Dadra and Nagar Haveli and Daman and Diu
|
1
|
|
Uttar Pradesh
|
183
|
|
Uttarakhand
|
8
|
|
West Bengal
|
72
|
|
Total
|
1702
|
Table 2: The list of number of Multi-State Cooperative Societies including banks, which are under liquidation, state-wise: –
|
Name of State
|
No. of MSCS
|
|---|---|
|
Andhra Pradesh
|
2
|
|
Bihar
|
1
|
|
Delhi
|
11
|
|
Goa
|
1
|
|
Gujarat
|
4
|
|
Jharkhand
|
1
|
|
Maharashtra
|
18
|
|
Odisha
|
11
|
|
Punjab
|
1
|
|
Rajasthan
|
26
|
|
Tamil Nadu
|
3
|
|
Telangana
|
2
|
|
The Dadra and Nagar Haveli and Daman and Diu
|
1
|
|
Uttar Pradesh
|
12
|
|
Chandigarh
|
1
|
|
West Bengal
|
5
|
|
Total
|
100
|
Key Amendments and Reforms
To address operational challenges and bring about systemic improvements, the following measures have been introduced:
1. Governance and Transparency Improvements
- Cooperative Election Authority: Established to ensure timely and transparent elections in multi-state cooperative societies.
- Ombudsman Mechanism: Appointment of a Cooperative Ombudsman by the Central Government to address grievances effectively.
- Information Officers: Multi-state cooperative societies must appoint officers to provide information to members, fostering transparency.
2. Financial Oversight
- Concurrent Audit: Societies with turnover/deposits exceeding ₹500 crore must undergo concurrent audits by Central Registrar-approved auditors to detect irregularities early.
- Prudential Norms: Central Government will set norms for societies involved in thrift and credit to enhance financial discipline.
- Audit Reporting: National cooperative societies’ audit reports will now be tabled in Parliament.
3. Accountability and Ethical Governance
- Conflict of Interest: Directors must abstain from discussions and voting on matters involving their interests or those of their relatives.
- Expanded Disqualification Criteria: Additional grounds for disqualification to prevent repeat offenses and improve governance.
- Quorum for Board Meetings: Prescribed to enhance democratic decision-making.
4. Financial and Operational Reforms
- Investment Safeguards: Investment rules updated to remove colonial-era references and ensure safer options.
- Audit and Ethics Committee: Mandatory formation to oversee financial discipline and ethical operations.
- CEO Appointment Criteria: Guidelines introduced to ensure capable leadership.
5. Deterring Fraudulent Practices
- Inquiry Provisions: Central Registrar empowered to investigate fraudulent or unlawful activities in societies.
- Misrepresentation Penalty: Societies found to have obtained registration fraudulently may face winding-up proceedings.
Focus on Liquidation
Out of the 100 MSCS under liquidation, Rajasthan, Uttar Pradesh, and Maharashtra are among the top contributors. This step is critical to addressing long-standing financial mismanagement issues and ensuring accountability.
Impact of Reforms
The amendments bring much-needed clarity and oversight to the functioning of multi-state cooperative societies. With mechanisms like concurrent audits, stricter governance norms, and a focus on ethical practices, these reforms aim to restore trust and efficiency within the cooperative ecosystem.
These steps signify a progressive shift towards making multi-state cooperative societies more resilient, transparent, and aligned with modern governance principles. The amendments are expected to bolster the trust of members and stakeholders alike, paving the way for a stronger cooperative movement in India.
Share this post
Trending News
Rajat N
December 22, 2024
Rajat N
December 22, 2024
Rajat N
December 22, 2024
Rajat N
December 22, 2024
About Author
Rajat N
Web Designer and Digital Marketing Manager with 3+ years of experience at Vibrant Marketer. Skilled in crafting visually appealing and user-friendly websites. Also proficient in content writing and graphic design to enhance brand visibility.