The Hindu Business Line : Rs 729-crore package for Karnataka farm co-ops

Bangalore, Oct. 27 The Karnataka Government has decided to implement the A. Vaidyanathan Committee report on cooperatives for revival of primary agricultural cooperative societies (PACS) by implementing a Rs. 729.49-crore package.

The Minister for Cooperation, Mr Laxman S. Savadi, told presspersons here that the Government had decided to implement the report to make all PACS financially viable.

Nearly 25 per cent of cooperatives were financially unviable in the State. The cooperatives have disbursed Rs 5,576 crore at three per cent interest to farmers so far and a total of 19.10 lakh farmers benefited. Cooperatives lent Rs 1,985 crore in 2009-10.

Cabinet decision

The State Cabinet on Thursday decided to implement the recommendations of the committee. Since legislature sessions would be held next month, the report would be implemented through an Ordinance. Later, the Government would amend the Karnataka Cooperative Societies’ Act, 2009, to replace the Ordinance, he said.

To implement the Rs. 729.49-crore revival package, the Centre would contribute Rs. 570.52 crore.

The State Government and PACS would contribute Rs. 90 crore and Rs. 69.23 crore, respectively.

There were 21 district cooperative banks and 4,133 PACS in the State. The State Government, National Bank for Agriculture and Rural Development (Nabard) and the Centre signed a tripartite agreement to implement the package on March 25, 2008.

The cooperatives whose recovery rate was above 30 per cent as on June 30, 2004, were eligible for funds under the package, the Minister said.

Prof. Vaidyanathan submitted the report to the Centre on February 4, 2005. The Centre formulated the package for PACS in 2006, and Andhra Pradesh, Tamil Nadu, Maharashtra, Orissa, Bihar, Gujarat, Rajasthan, Madhya Pradesh, Uttar Pradesh, and Jammu Kashmir had implemented the committee’s recommendations.

Funds released

The Centre had released funds to Andhra Pradesh, Tamil Nadu and Maharashtra, Mr Savadi said.

He said the implementation of the recommendations made by the committee would change the administrative set-up of the cooperatives. The Government had no powers to interfere in the administrative and financial matters of the cooperatives.

The report was against government nominations to cooperatives and the government’s share capital had been limited to 25 per cent.

Under the new system, the cooperatives had powers to fix the rate of interest on deposits and loans. There was no compulsory rule to set aside two per cent of the profits made by the cooperatives for the education fund.

All depositors were eligible to exercise their right to vote in the election to the management committee.

More Stories on : Co-operatives | Farm credit | Karnataka

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Rs 729-crore package for Karnataka farm co-ops