Co-ops Get Their Moment In The Sun

Source: The post is based on the article “Co-ops Get Their Moment In The Sun” published in The Times of India on 4^th February 2023.

Syllabus: GS 3 – Government Budgeting

Relevance: Budget 2023-24 for the cooperative sector

News: The article discusses measures announced by this year’s budget to boost the cooperative sector.

What are some of the measures announced in the budget for cooperatives?

Decentralised storage capacity: The budget has announced setting up of massive decentralised storage capacity so that farmers can store their produce and receive remunerative prices by selling at an appropriate time. It will be the world’s largest grain storage facility.

Concessions in income tax rate: The budget has announced a concessional income tax rate of 15% for cooperatives to promote the growth of new cooperative manufacturing societies.

Increase in the limit of cash deposits and loans: The budget has increased the limit of cash deposits and loans to Rs 2 lakhs in cash provided by primary agricultural cooperative societies (PACs), primary cooperative agricultural and rural development banks.

Higher Limit for TDS: Cooperative societies has been given a higher limit of Rs 3 crore for tax deducted at source (TDS) on cash withdrawals.

Relief to sugar cooperatives: The claims for payment made to sugar farmers before the assessment year 2016-17 will now be considered an expenditure. This is expected to provide approximately Rs 10,000 crore in relief to the sugar cooperatives.

Model bye-laws: The budget also announced that model bye-laws for PACS are being formulated. It will enable them to become multipurpose cooperatives to meet the country’s diverse needs and remain financially profitable.

What are the other developments made by the government for cooperatives?

National database of cooperatives: The government is establishing a national database of cooperatives to reduce the sectoral and geographical variations.

National Cooperative Policy: A committee has been constituted by the cooperation ministry to formulate a National Cooperative Policy. It will include stakeholders’ recommendations and become a link to connect the masses with the country’s financial system.

National Cooperative University: The government is also working towards establishing a National Cooperative University to provide trained manpower to cooperatives.

Memorandum of Understanding (MoU): Recently an MoU has been signed, enabling PACS to provide the services offered by the Common Service Centre.

Computerisation: The computerization of 63,000 agricultural cooperatives has also been started.

These are some of the measures taken up by the government. Further to read what are cooperatives: Click Here.