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Saturday, August 21, 2004

There is an old adage that “if some thing isn’t broke, it doesn’t need fixing”. But the AP government is exactly attempting to do the same through its proposal for amending the Mutually Aided Cooperative Societies (MACS) Act, 1995. For some of you who might not be familiar with what is happening in the field of cooperatives, a little backgrounder.

A Cooperative is a private, autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise. It is normally accepted that any association that is so constituted would be capable of administering itself through its own members.

The cooperative movement has been playing a pivotal role in the development of key sectors such as rural thrift and credit, dairy, sugar, horticulture and other agricultural produce, benefiting crores of Indians. The unique success of Amul and the dairy cooperative movement, making India the world’s largest milk producer is a testimony to the vitality and strength of this sector.

Until 1950s the cooperatives in India were administered under a liberal law enacted during colonial rule and the government didn’t have any role to play. But starting in the early 60s, when the role of the state was expanded, various states enacted restrictive cooperative laws through which the government gained a back door entry into the cooperatives. Since then it has been a steady decline for the bulk of the cooperatives across the country (barring a handful) largely owing to politicization and mindless tinkering by civil servants.

Fortunately, in AP thanks to the efforts of the Sahavikasa and the  other civil society initiatives, the vision of the NTR led government in 1995, and the impressive unanimity among all parties represented in the State Legislature, a liberal cooperative law (MACS Act) was unanimously enacted. This law, for the first time freed the cooperative sector from government control and enabled them to function as democratic, autonomous, member-managed and member-centred institutions. Since then eight other states (Jammu & Kashmir, Uttaranchal, Bihar, Jharkand, Madhya Pradesh, Chattisgarh, Orissa and Karnataka) across the country have adopted liberal cooperative legislation similar to that of Andhra Pradesh.

Since then many successful cooperative dairies in AP such as Sangam, Vijaya and Vishaka have switched over to the new act. But this has caused severe heartburn to the babus and netas who would like to retain control over these cash-rich institutions.

While the previous TDP government (especially the babus) has also tried its best to undermine the cooperative sector, it didn’t dare to touch the MACS Act.  The new Congress government in AP has crossed the Rubicon and is threatening to amend the MACS Act, ostensibly to prevent monopoly control of these societies by entrenched individuals. This is nothing but a poorly disguised attempt to gain control of successful cooperatives and settle personal and political scores

The surprising fact is that while the Congress government in the state is trying to undermine the cooperative sector, the manifesto of the Indian National Congress as well as the National Common Minimum Programme of the UPA government talk about bringing in a Constitutional amendment to protect and preserve the autonomy of the cooperatives!  This is a classic case of the right hand not knowing what the left hand is doing.

Right to form and run cooperatives is a fundamental right guaranteed under Article 19(1)(C) of the Constitution. Given the commitment of the Congress party and the UPA government to give concrete shape to this fundamental right, any effort to dilute the autonomy of cooperatives in Andhra Pradesh will be a patently regressive step.

Whenever government intervened in the management of cooperatives, it led to losses, collapse and failure. The plight of the credit cooperatives in AP, the losses sustained by sugar cooperatives over the years, the complete decimation of marketing cooperatives and the failure of government-controlled dairy cooperatives are good illustrations of the consequences of government intervention. There is a lot that the government should do – public order, rule of law, justice, education, healthcare, natural resource development and infrastructure. Running cooperatives or stifling people’s initiative is certainly not the government’s job.

As the adage goes, “physician, heal thyself!” Let the government do its job, and let people have right to exercise their freedom – in this case, organizing and running their own cooperative. If the members put in money, and they have stakes in the future of the cooperative, they know how to protect it. That is the basis of democracy. We need no omnipotent government butting in and controlling people’s institutions.

The Constitution is sacrosanct. Where taxpayer’s money is not involved, the state has no business to intervene. In all other areas, people are, and must be free to do whatever they believe is in their interest, as long as others’ interests are not affected. The politicians and bureaucrats are not monarchs of all they survey. If they choose to behave as modern-day monarchs, they must, and will, be taught a fitting lesson.

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