Context

  • The Constitution (97th Amendment) Act, 2011 relates to the Cooperative Societies working in India.

Constitutional Provision

Fundamental right Article 19 (1) (c) as ‘Right to form cooperatives.’
Directive Principle of State Policy Art. 43-B “The state shall endeavour to promote voluntary formation, democratic control, autonomous functioning and professional management of cooperative societies”.
Part IX-B “The Co-operative Societies” (Articles 243-ZH to 243-ZT).
State List State Subject under entry No.32 (7th schedule) of the of the Constitution of India

Incorporation of Cooperative Societies 

  • The state legislature may make provisions for the incorporationregulation and winding-up of co-operative societies based on the principles of voluntary formation, democratic member control, member economic participation and autonomous functioning.

 Number

  • The board shall consist of such a number of directors as may be provided by the state legislature.
  • A maximum number of directors of a co-operative society shall not exceed twenty-one.
  • Terms: 05 years

Election of Cooperative Societies 

  • The election of a board shall be conducted before the expiry of the term of the board.
  • The superintendence, direction and control of the preparation of electoral rolls and the conduct of elections to a co-operative society shall vest in such body, as may be provided by the state legislature. Cooperative Societies

Supersession and Suspension of Board

  • Board can be superseded or kept under suspension for a period not more than six months
    • Of its persistent default
    • Of negligence in the performance of its duties
    • Of committing any act prejudicial to the interests of the cooperative society or its members
    • Of there being a stalemate in the constitution or functions of the board
    • Of the election body having failed to conduct elections in accordance with the provisions of the State Act

Audit and Accounts

  • The state legislature may make provisions for the maintenance of accounts by the co-operative societies and the auditing of such accounts at least once in each financial year.
  • The audit report of the accounts of an apex co-operative society shall be laid before the state legislature

Convening General Body Meeting

  • The State Legislature may provide that the annual general body meeting of every cooperative society shall be convened within a period of six months of the close of the financial year.

Returns

  • Every co-operative society shall file returns, within six months of the close of every financial year, to the authority designated by the State Government

Offences and Penalties

  • The State Legislature may make provisions for the offences relating to the co-operative societies and penalties for such offences.

Reasons for 97th CAA, 2011

  • Cooperative sector has shown weaknesses in safeguarding the interests of the members and fulfilment of objects for which these institutions were
  • For securing social and economic justice and equitable distribution of the fruits of development.
  • It has been experienced that in spite of considerable expansion of co-operatives, their performance in qualitative terms has not been up to the desired level.
  • The Central Government was committed to ensure that the co-operative societies in the country function in a democratic, professional, autonomous and economically sound
  • On many instances, elections have been postponed indefinitely and nominated office bearers or administrators have remained in-charge of these institutions for a long time. This dilutes the accountability.
  • Inadequate professionalism in management in many of the co-operative institutions has led to poor services and low productivity.
  • To keep the co-operatives free from unnecessary outside interferences and also to ensure their autonomous organizational set up and their democratic functioning.

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