Constitution Amendment Bill for Cooperatives - A Brief Presentation Presented at UNDP Solution Exchange Consultation on Micro-finance Bhopal, November 2009 by Veena Nabar

Constitution Amendment – Why? “Co-operative Societies” - State subject Taking note of governance and administration, need for uniformity in co-operative legislation Particularly with respect to aspects crucial for autonomous and democratic functioning State Parallel Acts changed for political expediency – Andhra Pradesh Need for superior authority to ensure State laws follow Model Act and any transgression is judiciable – Amendment will ensure conformity with Constitutional provisions

Basis of High Power Committee Recommendations State controls through - Changes in term of Boards Number of Directors Eligibility of Directors and Office Bearers Eligibility to vote Co-option of members who have lost elections Supercession Audit by State Department

High Power Committee Recommendations Analogy of Panchayati Raj and Nagar Palika may not hold good for Co-operatives as these are governance institutions whereas Co-operatives are self governing – hence need for insertion at an appropriate place in the constitution other than as Part IX B 1985 judgement of Justice Reddy reinforces need for inclusion of Co-operatives in Article 19(1)(C) Also legislative provisions, executive orders and court rulings give impression that Co-operatives are institutions not of user members but government – hence necessary to have a definition of Co-operatives

Clause-wise Suggestions Suggested definition of Co-operatives - “Co-operatives are autonomous associations of persons united voluntarily to meet their common needs and aspirations through a jointly owned and democratically controlled enterprise and adhering to the Co-operative principles and values Bill proposes “Co-operative Society means a society deemed to be registered under any law relating to Co-operative societies for the time being in force in any State” Definition of Active Member – “An active member is one who participates in the affairs of the Co-operative using it’s services as prescribed in the by laws of the Co-operative” The Bill does not include this

Number and term of Board and Office bearers Maximum number of Directors at 21 Bill provides reservation – SC(1), Women(2) Active members only eligible to vote and be elected Bill silent Ministers not eligible for Office Bill silent Persons with interest in kind of business of the Society ineligible to be elected Bill silent

Number and term of Board and Office bearers (contd.) Term of Board – upto 5 years Bill specifies 5 years Only elected members eligible to vote and be elected as Chairman, Vice Chairman Bill silent Co-option of experts Bill proposes that they would not be eligible to vote as members or stand for election No co-option of candidates who have lost elections Bill silent

Other Provisions Elections : To be conducted before expiry of outgoing Board Bill in line Supercession : 1.Not to exceed 6 months – Bill in line and also specifies reasons 2.No supercession where government shareholding less than 51% - Bill proposes supercession where no governement shareholding 3.Administrator to ensure elections within 6 months of supercession - Bill in line General Body meeting within 6 months of financial year Bill in line

Other Provisions (contd.) Audit 1.Qualifications for Auditors – Bill also specifies that panel be approved by government Right to Information 1.Access by members of all information related to his transactions 2.Minimum number of meetings, transactions to be specified to ensure member participation – Bill in line with 1 & 2 Offences and Penalties Continuance of existing law 1.To continue until repealed, amended or 1 year, whichever least

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