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CMs agree on need for co-operative reforms

P Jayaram in New Delhi

India's co-operative societies, which helped usher in the green and white revolutions and made the country of over one billion surplus in food and milk, need to be equipped to face the challenges of liberalisation and globalisation.

And for this the cooperative credit scheme, on which a large section of the rural population depends, needs to be reformed and strengthened, speakers at a conference of state chief ministers called by Prime Minister Atal Bihari Vajpayee in New Delhi Saturday agreed, though differing on the possible remedies.

The main purpose of the meeting was to discuss the Rural Infrastructure Development Fund launched by the government in 1995-96 to provide credit for development of roads, bridges, communications, irrigation, drinking water supply, flood control, healthcare and education in the rural areas and in which the cooperatives were to play a leading role.

The scheme launched with an initial fund of Rs 20 billion has since grown to Rs 230 billion, though, according to Finance Minister Yashwant Sinha, only about Rs 97 billion had been drawn by the states from it so far.

The prime minister noted the development of the infrastructure facilities in the rural areas was essential to stimulate economic growth and improve the quality of life in the rural and backward areas.

He noted that during his visit to Guwahati in January last year, he had announced that at least Rs 5 billion from the RIDF would be made available to the states of the northeastern region every year, but regretted that despite a series of meetings, only just over Rs 5 billion had been disbursed so far.

No loans had been given for the last three years to Manipur, one of the most economically backward among the states of the region, he noted and asked the finance minister to "work out a suitable way to increase disbursement of RIDF."

Vajpayee praised the "pivotal role" played by the cooperatives in "realising the principles of self-reliance and people's participation in development."

"In particular, an organic link has developed between the cooperative movement and the development of agriculture in India. A large part of our population depends on agriculture directly or indirectly. The overall growth of our economy depends, to a large extent, on the growth of the rural and agriculture sector," he said.

He also said that the contribution of cooperative institutions, particularly credit cooperatives, has been significant in the development of the rural areas. "We are proud today India's cooperative credit system is the largest in the world, in its size and its reach."

The finance minister said co-operative credit banks accounted for extension of Rs 230 billion of the short-term credit to farmers out of the total credit of Rs 427 billion extended by the entire banking sector during the last three years.

"Co-operative credit structure can serve the hopes and aspirations of the Indian farming community, which largely depend on them for their credit needs," he said but added the "weak credit discipline" of the co-operatives would require hard decision to be taken.

"Consolidation where necessary and exit where nothing else is possible would be essential," he added.

Indo-Asian News Service

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