BJP government seeks to oust Congress-NCP hegemony in co-op sector

Mumbai: Eyeing the cooperative sector controlled by the opposing Congress and Nationalist Congress Party (NCP), the ruling Bharatiya Janata Party (BJP) has decided to grab this sector by hook or crook. The co-op sugar mills have been on the radar of the BJP government, which has issued notices to defaulter mills for the recovery of soft loans borrowed from the government.

The state has also lifted the ban on registering village level primary co-op development societies and registered 50 lakh new members across the state, to gain control at the grass-root level. Sudhir Mungantiwar, minister for finance and planning, has instructed the cooperative ministry to publish a white paper on this sector. “Sugar mills and textile mills have taken soft loans from the state government and not repaid them.

The Congress and NCP ruled the state for the maximum number of years. They have controlled the cooperative sector and hence, delayed repaying the loan and even the interest. People should know how they have looted state funds,” said Mungantiwar.

According to senior officials from the cooperative and marketing ministry, five district central cooperative (DCC) banks find themselves in a financial crisis after lending to 11 cooperative sugar mills controlled by ‘big’ leaders from both parties. The banks are in Solapur, Wardha, Nashik, Buldhana and Osmanabad. “The sugar mills have not repaid loans amounting to Rs 1223.93 crore borrowed from DCC banks. Hence, these banks are facing liquidity issues, even facing action from the Reserve Bank of India,” said the official.

He has confirmed his department is planning to bring out the facts, black and white, on paper, to ensure the state knows the amounts owed by the cooperatives in loans and share capital from the government and the amount that has been repaid.

“The leaders have taken advantage of the government rule which states loan repayment only begins after the mill receives 100 per cent of the total subsidy applicable to it. In one case, a co-op owner did not accept Rs 50,000 of the Rs 19cr total subsidy (having already availed of the remaining Rs18.5cr subsidy) from the government as share capital, in order  to ensure delaying the repayment.

(To download our E-paper please click here. The publishers permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

Free Press Journal