A day before the much-publicised Cabinet expansion, in a historic move, the Modi government created a separate ‘Ministry of Co-operation’ for realizing the vision of ‘. Home Minister Amit Shah has been made in-charge of this ministry. Amit Shah has rich experience in Gujarat’s cooperative sector.
This new ministry will:
(i) Provide a separate administrative, legal and policy framework for strengthening the cooperative movement in the country
(ii) Help deepen cooperatives as a true people-based movement reaching upto the grassroots
(iii) Work to streamline processes for ‘Ease of doing business’ for cooperatives, and
(iv) Enable development of multi-state cooperatives
India has had a rich and successful history of the cooperative movement. Maharashtra, Gujarat, Kerala, Uttar Pradesh and Karnataka are few states which have flourishing cooperative societies.
Amul, Indian Coffee House and IFFCO are some examples of successful cooperatives in India. Cooperatives play a significant role in the rural areas in the production of sugar, dairy / milk products, banking and housing.
Many cooperative societies, particularly in rural areas, increase political participation and are used as a stepping stone by aspiring politicians. Many leaders involved with cooperative movements have made a big name for themselves in state and national politics and derive their power/strength from such associations.
Cooperative societies are a state subject, rules for their functioning and governance are framed by the states, and hence the creation of a central ministry has raised eyebrows. Opposition has termed it as infringement upon the federal rights of state governments.
The step has ruffled the feathers of Communist Party of India (Marxist) and Nationalist Congress Party who have strong roots in the cooperative sector in Kerala and Maharashtra, respectively.
The move could prove to be a masterstroke for the BJP going into general elections in 2024.
1. Help BJP make inroads in Kerala
The Bharatiya Janata Party has been unable to make headway in Kerala despite the state being a fertile ground for the party with a minority population at 45%. The CPM’s victory earlier this year, where it broke a 40-year trend, has made it stronger. The CPM controls state cooperatives and the BJP could try to break their monopoly over these institutions and gain political traction in the state.
Former Kerala finance minister and senior Left leader TM Thomas Issac tweeted, ‘Yet another assault on Federalism. Co-operative societies are in the state list of the Constitution. No better hatchet man than Amit Shah to head the new Union Cooperation Ministry to take over the entire co-operative sector, bypassing the states and promote the Hindutva coops."
In Gujarat, Amit Shah and BJP first diminished the dominance of Congress from State Cooperative Banks, considered their forte, and then went on to capture the state, which they have been ruling since 1998.
2. Clip Pawar family’s wings
The NCP too appears worried with this move. The Pawar family draws its strength from control over cooperative sugar mills and cooperative banks. “Laws regarding the cooperation sector are framed in the Maharashtra Assembly. The Centre has no right to interfere in the laws drafted by the Maharashtra Legislative Assembly,” Sharad Pawar was quoted as saying by news agency ANI.
The Department of Cooperation was under Sharad Pawar, who was the Agriculture Minister of India from 2004 to 2014, before being created as a new ministry in 2021.
The Devendra Fadnavis government in Maharashtra, from 2014 to 2019 did try to break this hold but with limited success. The family is deeply entrenched in these cooperative societies and increased their dominance from 1999 to 2014.
If the alliance between the NCP, the Congress and the Shiv Sena continues successfully, then the BJP could face problems in Maharashtra in the 2024 general elections. The state sends 48 MPs to Parliament.
Union Home Minister Amit Shah also has to prove a point to Pawar. The senior Pawar managed to stave off a threat of split in the party, led by his nephew Ajit, which led to the failure of the BJP’s bid to form a government in the state in 2019.
3. Neutralize farmer protests
The ministry has been created at a time when a section of farmers have been protesting for the past 6 months against the farm laws. The agitation has been led by farmers of Punjab, Haryana and western Uttar Pradesh. The protests have taken a political turn and are fast losing public support.
The new ministry aims to stop the exploitation of agriculturists by the middlemen in India’s rural areas. Amul, India’s most successful co-operative, was formed in 1946 against the exploitative trade practices followed by the local trade cartel.
India’s first home minister, Sardar Vallabhbhai Patel, had advised farmers to get rid of the middlemen and form their own cooperatives that would have procurement, processing and marketing under their control.
The BJP hopes to use the cooperation ministry’s policies and programmes to earn brownie points among the farming community and neutralise the farmer protests.
The newly formed cooperation ministry could prove to be a deft political move reaping rich political dividends to the BJP in general elections 2024.