The Supreme Court verdict on a 2012 law to streamline the functioning of cooperative societies does not bode well for the new ministry of cooperation created a fortnight ago with Home Minister Amit Shah at the head. Certain provisions of the law were set aside by a three-member bench headed by Justice Rohinton Nariman, more on technical than legal grounds.
For instance, the new law embedded in the 97th Constitution Amendment Bill needed to be passed by Parliament and a majority of the state legislatures. This was because the subject of cooperation fell in the state list. However, the constitutional requirement of getting the law approved by two-thirds of the state assemblies was not adhered to. Because of this lapse, those clauses of the law which sought to control cooperatives in the states were declared null and void. Where the law covered cooperatives functioning in more than one state, it would remain in force.
Significantly, one of the judges, Justice KM Joseph, wanted the whole law to be off the statute book. Of course, the majority verdict would prevail. The Gujarat high court had earlier questioned the validity of the law. The apex court heard the case when the Centre filed an appeal against the high court verdict.
There are now a few options for the Centre. It can get the same law approved by the necessary number of state legislatures. Alternatively, it can manage with whatever powers the law, as approved by the apex court, grants it. At the extreme, it can also bring forward a new Bill that takes care of all the infirmities in the existing law. The judgment assumes importance in the context of what Prime Minister Narendra Modi did in his bid to control the cooperative sector.
Most Opposition leaders and states ruled by non-BJP parties have not taken kindly to the bid to encroach upon the powers of the states. If they attribute motives to giving Amit Shah, the overworked home minister, the additional charge of the ministry, it could not be helped. There has been a flurry of front-page newspaper advertisements, paid for by the cooperative sector, to welcome the Central initiative, especially the appointment of Amit Shah. Of course, everybody knows that these are command performances, not spontaneous outflow of support.
The point is that the Centre is keen to control the cooperative sector, which is, of course, against Modi’s own pre-2014 poll promise to minimise government and maximise governance. The whole world knows how effective the cooperative sector was when the duo of Tribhuvandas Patel and Verghese Kurien of Amul fame heralded the white revolution.
Whoever has studied the rise of the BJP in Gujarat knows, for instance, how it managed to control the cooperatives which provide the party not only funds but also votes. Today, the cooperative sector is totally in the BJP’s control in Gujarat. Similarly, Sharad Pawar’s NCP draws its sustenance from the control it wields on the sugar mills in the cooperative sector. In many states, political power is controlled by those who control cooperatives. The hold of the ruling party on the farmers has been weakened by the farmers’ agitation. This problem needs to be addressed.
The new ministry might bring all the registrars of cooperative societies, usually IAS officers, under its control. That a heavyweight political leader has been entrusted with the job is a measure of the government’s determination to tap the potential of cooperatives to strengthen the ruling dispensation. However, the apex court verdict is a warning that there can be a slip between the cup and the lip, as the ministry amounts to an infringement of the states’ authority.