“Prosperity through Cooperation”
Major initiatives of Ministry of Cooperation
(6th July 2021 - 14th June 2023)
(A) Economic strengthening of Primary Co-operative Societies
1. Model Bye-Laws for making PACS Multipurpose
The Model Bye-laws for PACS were prepared by Ministry of Cooperation after
consultation with all States/UTs, National Federations and other stakeholders and
were circulated on 05 January 2023. This will increase the sources of income of
PACS/LAMPS and create new employment opportunities in more than 25 new
sectors like dairy, fisheries, storage, etc. So far, they have been adopted by 23
States/Union Territories and the work of adoption in other States is in progress.
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2. Strengthening of PACS through Computerization
Total 63,000 functional PACS/LAMPS are being linked with NABARD through a
single National Software Network. So far, proposals for computerization of a total
of 58,383 PACS have been received from 24 States and 4 Union Territories. For
this, a total of Rs 437.17 crore has been released by the Central government to the
States for hardware purchase, digitization and setting up support systems. National
Integrated Software has been prepared by NABARD. Computerization will start
after the procurement of hardware and finalization of System Integrator by the
States. This initiative will enhance efficiency and transparency in PACS.
3. Establishment of Multipurpose PACS/Dairy/Fisheries Cooperative Societies
(2 lakh new societies) in every Panchayat/Village
This scheme, approved by the Cabinet on February 15, 2023, has a target of setting
up 2 lakh new Multi-purpose PACS/Dairy/Fisheries Cooperative Societies in the
Panchayats/Villages not covered so far, in the next 5 years. Under this, various
schemes of the Government of India will be converged at the level of primary
Cooperative Societies. Inter-Ministerial Committee, National Level Coordination
Committee, State Level Cooperative Development Committees and District Level
Cooperative Development Committees have been formed for the implementation
of this scheme. Meetings are being held by the Ministry with all the States. Action
plan related to the establishment of new Societies has been prepared by NABARD,
NDDB and NFDB and work has already started on this plan.
4. World's largest Decentralized Grain Storage Program in Cooperative
sector to ensure food security
Under this scheme, approved by the Cabinet on May 31, 2023, different types of
agricultural infrastructure such as godowns, custom hiring centers, processing
units, fair price shops, etc. will be created by convergence of various schemes of
the Government of India at the PACS level. This scheme will ensure country's food
security, reduce wastage of food grains, result in better price for farmers for their
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produce and meet various agricultural needs at the PACS level itself. The
implementation of this scheme is being started through a Pilot project with the
cooperation of the States, and will be coordinated by the Inter-Ministerial
Committee, National Level Coordination Committee, State Level Cooperative
Development Committee and District Level Cooperative Development Committee.
5. PACS as Common Service Centers (CSCs) for better access to e-Services
MoU has been signed on 02.02.2023 between Ministry of Cooperation, Ministry of
Electronics and Information Technology, NABARD and CSC e-Governance
Services India Limited for providing CSC services through PACS, after which
more than 300 e-services provided by CSC will now be provided by PACS also.
Till date more than 15,000 PACS have been onboarded as CSC and the work on
onboarding of other PACS is also in progress. The onboarded PACS are also being
provided training by CSC-SPV and NABARD.
6. Formation of new Farmer Producer Organizations (FPOs) by PACS
Under the FPO scheme, it has been decided to allot 1100 additional FPOs to the
National Cooperative Development Corporation (NCDC) in cooperative sector.
Now, PACS will be able to do other economic activities related to agriculture as
FPOs. This initiative will also be helpful in providing the members of the
cooperative societies with the necessary market linkage to get fair and
remunerative prices for their produce.
7. Eligibility of PACS for LPG Distributorship
Petroleum Ministry is amending rules to make PACS eligible for LPG
distributorship, after which PACS will also be able to distribute LPG. This will
give PACS an option to increase their economic activities and create new
employment opportunities in rural areas.
8. Permission to convert Bulk Consumer Petrol Pump operated by PACS into
retail outlet
The Ministry of Petroleum and Natural Gas has agreed to convert existing bulk
consumer licensee PACS into retail outlets. PACS will also be given priority for
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new petrol pump dealership. These provisions will increase the profit of PACS and
create new employment opportunities in rural areas.
9. PACS as Jan Aushadhi Kendra for access to generic medicines at Rural
level
In a meeting held on June 06, 2023 under the chairmanship of the Hon’ble Home
and Cooperation Minister with the Hon’ble Minister of Chemicals and Fertilizers,
it was decided to open 1,000 Jan Aushadhi Kendras by August, 2023 and 2,000 Jan
Aushadhi Kendras by December, 2023 at identified PACS. With this initiative,
cheaper generic medicines will be available to the common people at the
Village/Block level and PACS will get additional employment opportunities.
Interested PACS are to be identified and encouraged by the State Government to
apply online.
10. PACS as Fertilizer Distribution Centre
In a meeting held on June 06, 2023 under the chairmanship of the Hon'ble Minister
of Home Affairs and Cooperation with the Hon'ble Minister of Chemicals, decision
has been taken to make functional PACS eligible to act as fertilizer retailers,
Pradhan Mantri Kisan Samriddhi Kendras (PMKSK) and drone entrepreneurs for
spraying fertilizers and pesticides. These drones can also be used for property
survey. This step will ensure availability of fertilizers to the farmers at the PACS
level and will create new business opportunities in PACS.
11. Convergence of PM-KUSUM Scheme at PACS Level
The structure and reach of PACS, which have direct linkage with 13 Crore farmer
members, can be leveraged to set up decentralized solar power plants at the
Panchayat level. With this, farmers connected to PACS can replace Agricultural
Diesel Pumps with Solar Agricultural Water Pumps and ensure their energy
security by installing Photovoltaic Modules on the periphery of their land, thereby
extending the reach of the scheme up to the last mile. Further, PACS and its
member farmers will get alternative sources of income. A concept note has been
prepared by the Ministry of Cooperation and sent to MNRE on this subject and a
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meeting of the Secretary (Cooperation) with the Hon’ble Minister of New and
Renewable Energy has been held on this proposal.
(B) Relief in Income Tax Law for Co-operative Societies
12. Reduction in surcharge on Income Tax for Cooperative Societies
The surcharge on Income Tax for Cooperative Societies with income from Rs 1
Crore to Rs 10 Crore has been reduced from 12% to 7% at par with Companies.
This will reduce the burden of Income Tax on Cooperative Societies and more
capital will be available with the societies to work for the benefit of the members.
13. Reduction in Minimum Alternate Tax (MAT) on Cooperative Societies
The Minimum Alternate Tax rate for Cooperative Societies has been reduced from
18.5% to 15%. With this provision, now there is parity between Cooperative
Societies and Companies in this regard. This will strengthen cooperative societies
and Cooperative Sector will expand.
14. Increase in limit of Cash Deposits and Cash Loans by PACS and
PCARDBs
The limit for Cash Deposits and Cash Loans by PACS and Primary Cooperative
Agriculture and Rural Development Banks (PCARDBs) has been increased from
Rs 20,000 to Rs 2 lakh per member. This provision will facilitate their activities,
increase their business and benefit the members of societies.
15. Tax cut for New manufacturing Cooperative Societies
New manufacturing cooperative societies commencing manufacturing operations
by March 31, 2024, will be taxed at a flat rate of 15% as against the existing tax
rate of up to 30% with surcharge. With this provision, now there is parity between
Cooperative Societies and companies in this regard. This will encourage the
formation of new cooperative societies in the manufacturing sector.
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16. Increase in the limit of Tax Deducted at Source (TDS) in Cash Withdrawal
Through the Union Budget 2023-24, the cash withdrawal limit of cooperative
societies without deduction of tax at source has been increased from Rs.1 crore to
Rs.3 crore per year. This provision will save Tax Deducted at Source (TDS) for
cooperative societies, which they will be able to use to work for the benefit of their
members.
17. Relief in cash transactions under section 269ST of the Income Tax Act
Co-operative societies earlier treated the 'Contract' with their distributors as 'one
event' and in all the transactions with that distributor in the entire year, if the cash
receipt was more than two lakh rupees, it was considered taxable and income tax
penalty was imposed on it. The Income Tax Department has issued a circular
making it clear that now the 'Contract' made by cooperative societies with their
distributors will not be considered as 'an event'. With this clarification, each cash
transaction of more than 2 lakhs done by the cooperative societies with their
distributor will be considered separately, so that they will not be charged with
income tax penalty. With this, State and District milk unions will now be able to
pay in cash to member milk producers by receiving payment in cash from their
distributors during Bank holidays.
(C) Redressal of difficulties faced by Co-operative Banks
18. Urban Co-operative Banks (UCBs) will now be able to open new branches to
expand their business.
19. UCBs will also be able to make one-time settlement of outstanding loans, like
Commercial Banks.
20. Additional time limit has been given to achieve the Priority Sector Lending
(PSL) targets given to UCBs.
21. A Nodal Officer has been designated in RBI for regular interaction with UCBs.
22. RBI has permitted UCBs to provide door-step banking services to their
customers.
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23. RBI has more than doubled the individual housing loan limit for Rural and
Urban Co-operative Banks.
24. Rural Co-operative Banks will now be able to lend to commercial real estate -
residential housing sector, thereby diversifying their business.
25. Co-operative Banks have been included as Member Lending Institutions
[MLIs] of CGTMSE. With this, now the member Co-operative Banks will be
able to take advantage of risk coverage up to 85 percent on the loans given.
Along with this, the cooperative sector enterprises will also now be able to get
collateral free loans up to Rs 5 crore from Co-operative Banks.
26. License fee for onboarding Co-operative Banks to the modern 'Aadhaar
Enabled Payment System' (AePS) has been reduced by linking it to the number
of transactions. Apart from this, 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.
(D) Revival of Cooperative Sugar Mills
27. Relief from Income Tax to Cooperative Sugar Mills
Cooperative Sugar Mills will not have to pay additional income tax on payment of
higher sugarcane prices to farmers up to the fair and remunerative price or the
State advised price. With this provision, Cooperative Sugar Mills will now be able
to give higher price of sugarcane to their members and they will get income tax
deduction on this higher expenditure.
28. Resolving decades old pending issues related to income tax of Cooperative
Sugar Mills
Provision has been made through the Union Budget 2023-24 that the payments
made by Cooperative Sugar Mills to sugarcane farmers before the assessment year
2016-17 will be allowed to be claimed as expenditure. By this, they will be able to
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get relief of about 10,000 crore rupees, thus resolving the income tax issues
pending for decades.
29. Rs 10,000 crore loan scheme through NCDC for strengthening of
Cooperative Sugar Mills
Ministry of Cooperation has launched a new scheme named ‘Grant-in-aid to
NCDC for Strengthening of Cooperative Sugar Mills’ under which Government of
India would give grant of Rs.1,000 crore to NCDC during Financial Year 2022-23
and 2023-24. NCDC will use this grant to provide loans up to Rs 10,000 crore to
Cooperative Sugar Mills, which they will be able to use for setting up ethanol
plants or for setting up cogeneration plants or for working capital or for all three
purposes.
30. Preference in purchase of ethanol to Cooperative Sugar Mills and
establishment of Cogen Power Plants
Cooperative Sugar Mills will be put at par with private companies for ethanol
procurement by the Ministry of Petroleum under the Ethanol Blending Programme
(EBP). There are also plans to set up Cogeneration Power Plants from sugarcane
bagasse. With these steps, the business of Cooperative Sugar Mills will expand and
in result their profits will also increase.
(E) Three new Multi-State Societies at the National Level
31. New National Level Multi-State Cooperative Society for Exports
Under the Multi-State Cooperative Societies Act, 2002, a new National
Cooperative Exports Limited has been set up as an Umbrella organization to
promote exports from the cooperative sector. Cooperative societies from Primary
to National level including District, State, National level federations and Multi-
State Cooperative Societies can become its members. Through this Society, the
Export of farmers' products will be facilitated and the farmers will get better price
for their products.
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32. New National Level Multi-State Cooperative Society for Certified Seeds
Under the Multi-State Cooperative Societies Act, 2002, a new Bhartiya Beej
Sahakari Samiti Limited has been set up as an Umbrella organization for
cultivation, production and distribution of improved seeds under a single brand
name. Cooperative Societies (Primary, District, State level) of States/Union
Territories can become its members. This Society will increase availability of
improved seeds to the farmers, boost productivity of crops and enhance the income
of the farmers.
33. New National Level Multi-State Cooperative Society for Organic Farming
The National Cooperative Organics Limited has been established under the Multi-
State Cooperative Societies Act, 2002 as an Umbrella organization which will
work for production, distribution and marketing of certified and authentic organic
products. Primary to National level cooperative societies including District, State,
National level federations, Multi-State Cooperative Societies, and Farmer Producer
Organizations (FPOs) can become its members. This will increase production of
organic products and increase the profit of the farmers.
(F) Education and Training in the Cooperative Sector
34. Establishment of the World's Largest Cooperative University
It is being planned to establish National Cooperative University for Cooperative
education, training, consultancy, research and development. This University will
ensure a sustainable, adequate and quality supply of trained manpower and work
for capacity building of the existing personnel. This University will be first of its
kind, a specialized University in cooperative sector.
35. New Scheme of Cooperative Education and Training
This scheme is needed to make cooperative societies a strong economic institution,
broaden and strengthen the cooperative movement, build capacity of faculty of
VAMNICOM, NCCT and JCTC, promote quality research and studies on
important areas of Cooperative Societies, etc. In this regard, initial stakeholder
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consultations are being held and formulation of scheme is targeted in the next three
months.
36. Promotion of training and awareness through NCCT
The National Council for Cooperative Training (NCCT), an autonomous society
under the Ministry of Cooperation, organizes cooperative education and training
programs for personnel, members and board members of Cooperative Societies
across the country, including personnel from Cooperative Departments of
States/UTs. It conducts these programs through its 20 constituent training institutes
spread across the country, out of which VAMNICOM (Vaikunth Mehta National
Institute of Cooperative Management) is a National level institute. In addition,
there are 14 State level and five Regional level institutes. NCCT conducted 3287
training programs in the year 2022-23 against the target of 1740 training programs
for cooperative participants, workers and professionals across the country. In
addition, during this period, the Council provided training to about 2,01,507
participants, which is five times more than the scheduled 43,500 participants.
Vocational Development Plans (based on existing DPRs) in local languages for
Cooperative Societies are being prepared through NCCT.
(G) New National Cooperation Policy and New National
Cooperative Database
37. Formulation of New National Cooperation Policy
A Multidisciplinary and National level committee consisting of 49 members
comprising experts and stakeholders from different States and across the Country
has been constituted under the leadership of former Union Minister Shri Suresh
Prabhu to formulate a new Cooperation Policy to realize the concept of 'Prosperity
through Cooperation'. So far, 9 meetings of the Expert Committee have been held,
during which detailed discussions were held with the stakeholders and the new
National Cooperation Policy is expected to be ready soon.
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38. New National Cooperative Database
The work on developing a comprehensive, authentic and updated National
Cooperative Database is being done in a phased manner by the Ministry of
Cooperation with the assistance of State Governments. Under the First Phase,
mapping of about 2.64 lakh societies of PACS, dairy and fisheries has been
completed on February 28, 2023. In the Second Phase, mapping of National
Cooperative Societies and Federations has been done. Under the Third Phase,
about 5.8 lakh Cooperative Societies of all other sectors are being included in the
database, which has been targeted to be completed by June, 2023.
(H) Inclusion of Cooperative Societies as 'Buyer' on GeM Portal
39. The Union Cabinet has approved Cooperative Societies to be registered as
'Buyer' on Government e-Marketplace (GeM) on 1st June, 2022. Cooperative
Societies will now be able to buy from around 60 lakh authentic sellers/service
providers available across the country on the single platform of GeM. So far more
than 550 Cooperative Societies have been onboarded as buyers on the GeM portal.
Further, Cooperative Societies are also being motivated to register as sellers on
GeM.
(I) Expansion of National Cooperative Development Corporation (NCDC)
40. New schemes for Cooperative Societies have been started by NCDC in various
sectors such as 'Swahayamshakti Sahakar' for self-help groups; ‘Dirghavadhi
Krishak Sahakar’ for long term agricultural credit; 'Dairy Sahakar' for dairy and
'Nandini Sahakar' for women's cooperative institutions etc. In the financial year
2022-23, NCDC disbursed financial assistance of Rs.41,025 crore (provisional)
which is almost 20% higher than the disbursement of Rs.34,221 crore in 2021-22.
To enhance the flow of much needed funds to the cooperative sector, NCDC has
envisaged increasing loan disbursements to about Rs 3 lakh crore per year over the
next five years by increasing its efficiency and geographical spread. All States and
State Cooperative Societies can avail loan schemes of NCDC.
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(J) Strengthening of Central Registrar’s Office
41. Computerization of Central Registrar's Office
The office of the Central Registrar is responsible for administering the Multi State
Co-operative Societies (MSCS) Act, 2002. The office of the Central Registrar is
being computerized to create a digital ecosystem for Multi-State Cooperative
Societies. The software will assist in processing applications and service requests
in a time bound manner through electronic work flow at the Central Registrar's
Office. It will have provisions for OTP based user registration, verification check
for compliance with MSCS Act and Rules, hearing through VC, issue of
registration certificate and other communication, electronically. This
computerization project will help significantly in registering new MSCS and will
also promote their ease of doing business.
[Link] Multi-State Co-operative Societies (Amendment) Bill, 2022
The Multi-State Co-operative Societies (Amendment) Bill, 2022 aims to amend
Multi-State Co-operative Societies Act, 2002 to incorporate the provisions of the
97th Constitutional Amendment and to strengthen governance, increase
transparency, increase accountability, improve election process, etc in Multi-State
Cooperative Societies. This Bill was introduced in the Lok Sabha on December 7,
2022, and was referred to a Joint Parliamentary Committee of both the Houses on
December 20, 2022. Notice of consideration and passing of the Bill, as reported by
the Joint Committee has been given in the Lok Sabha on 22.03.2023. The Bill is to
be introduced for consideration and passing in the upcoming session of the
Parliament.
(K) Other Initiatives
43. Computerization of Agriculture and Rural Development Banks (ARDBs)
To strengthen the Long-term Cooperative Credit structure, the Ministry of
Cooperation is taking up the project of computerization of Agriculture and Rural
Development Banks (ARDBs). It will have various components such as hardware
procurement, comprehensive Enterprise Resource Planning (ERP) solutions,
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digitization, providing training and support, and maintenance of software, etc. 25
percent of the expenditure incurred in this scheme will be borne by the ARDBs and
the remaining 75 percent by the Central and State governments. Computerization
will provide various benefits to ARDBs, such as increased efficiency, faster loan
disbursement, reduced transaction costs, increased transparency and lower
imbalances of payments, etc.
44. Refund to Investors of Sahara Group of Societies
On the petition of the Ministry of Cooperation, the Hon'ble Supreme Court vide
order dated 29.03.2023, directed to transfer Rs 5000 crore from Sahara-SEBI
refund account to the Central Registrar of Multi-State Co-operative Societies for
disbursement of valid dues of the depositors of 4 Cooperative Societies of Sahara
Group (Sahara Credit Cooperative Ltd., Saharayan Universal Multipurpose Society
Ltd., Hamara India Credit Cooperative Society Ltd. and Stars Multipurpose
Cooperative Society Ltd.). Stockholding Documents Management Services Ltd.
(SDMSL)'s has been engaged to develop a transparent digital system (portal) under
the supervision and monitoring of Justice Shri R. Subhash Reddy (Retd.) and
Advocate Shri Gaurav Agrawal, amicus curiae, for disbursement by the Central
Registrar in compliance with the order of the Hon'ble Supreme Court. Four
Officers on Special Duty (OSDs) have also been appointed by the Central
Registrar for each of the above committees to supervise the refund process.
Through the portal, payment will be made to the concerned Bank account of the
bona fide depositors in a transparent manner after proper identification and
submission of proof of their deposits and claims. The Central Registrar's Office is
shortly going to issue a press release to inform the investors of these societies to
apply for refund through the portal.
[Link] for computerization of office of Registrar of Cooperative Societies
in States/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
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scheme for computerization of State Registrar Offices is being prepared by the
Ministry of Cooperation. The software developed under this scheme will be based
on the Cooperative Act of the respective State/UT. The Ministry is in dialogue with
the Registrars of all the States/UTs to formulate this scheme and soon it will be
proposed as a Centrally Sponsored Scheme.
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