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Govt to arm cooperatives to help them compete with MNCs

Briefing reporters after the cabinet meeting in Delhi, Law Minister Arun Jaitley said the proposed amendment would give cooperatives, which have objectives beyond one state, the option to voluntarily convert into a producer company.

Explaining the cooperative structure, he said there were state cooperatives, which are under the concerned state government, multi-state cooperatives, which had membership in several states and cooperatives with membership in one state but objectives in several states.

These included milk cooperatives besides those under the National Dairy Development Board, he said.

Jaitley said the amendment would enable them to retain the character of a cooperative but also function like a company with a balance sheet and without proxy voting. They will also be eligible for institutional finance.

This would be subject to two-third majority approving the amendment in each cooperative, he said adding this was only an enabling law for becoming competitive.

To a query whether cooperatives would opt for this, Jaitley said many cooperatives and their managers, including Father of White Revolution V K Kurien and Amrita Patel of the NDDB, have been advocating the new option.

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