Can Amit be the good Shah of Cooperation?

An appointment which drew little attention during the July 7 cabinet reshuffle was that of Union Home Minister Amit Shah being given additional charge of the brand new ministry of cooperation which hitherto was an innocuous division within the Ministry of Agriculture.

Though the creation of the ministry was announced just a day before the reshuffle, the actual proposal had been mooted by Finance Minister Nirmala Sitharaman in her Union Budget address.

Behind every government plan is a noble objective, real or imaginary.  An official statement said the objective behind the latest initiative was “realizing the vision of sahkar se samriddhi (prosperity through cooperatives) by providing a separate administrative, legal and policy framework for strengthening the co-operative movement in the country.”  

Lofty words which suggest that the vision was largely unrealized in the preceding decades of the co-operative (or co-op) movement whose roots lie in the Co-operative Credit So­cieties Act legislated by the British in 1904. The movement made rapid strides after WW II with the appointment of the Cooperative Planning Committee in 1945 right up to 1954 when a body appointed by the Reserve Bank of India (RBI) submitted a report formalising the terms of All India Rural Credit Societies.

Why the Shah?

It is not so much the creation of the ministry which set tongues wagging as the identity of the man chosen to run it. Given his chutzpah and reputation for rushing into terrains where angels fear to tread, Amit Shah remains the most feared of Narendra Modi’s deputies whom the Opposition loves to hate.

Having got Parliament to deactivate Article 370 and rammed through the Citizenship Amendment Bill  in mid-2019, the rampaging HM would have broken the back of the anti-national Shaheen Bagh stir, and by now even  readied a rough-and ready blueprint for a countrywide National Register of Citizens (NRC). Modi’s cold feet came in way.

The selection of Shah to run the ministry, however, has as much to do with the dread he generates among his political enemies as with his experience of running co-ops. Having headed the Ahmedabad District Central Co-operative Bank for long, he knows the ropes.

CPM general secretary Sitaram Yechuri was the first to question the logic of creating a central ministry given the inclusion of co-operatives as a state subject in the Seventh Schedule of the Constitution. Overriding it would severely undermine its federal underpinnings.

The octogenarian tsar of sugar cooperatives in Maharashtra for nearly half a century, Sharad Govindrao Pawar, was quick to chime in agreement. The former Union minister of agriculture for 10 straight years during the UPA tenure realized the implications of the decision on his political and financial interests.

The Constitution, it was stressed, had accorded state co-operative sectors like Maharashtra’s a sanctity well beyond the Centre’s pale. Not for nothing does each state have a registrar of cooperatives to oversee the sector. The RBI, for its part, keeps tabs on the workings of co-operative banks which have in recent years become endemic founts of corruption.

It is precisely because of Constitutional limitations that the raison d’etre behind the ministry’s creation was couched in generalities like the need to give more muscle to the co-op movement and streamline processes involving ease of doing business. That the Centre’s jurisdiction is confined to institutions registered in more than one state, better known as multi-state co-operatives (MSCS), must obviously have weighed on the minds of BJP’s strategists who mooted the move.  

Those prone to flashing the rule book are quick to cry foul mostly when their own vested interests are threatened. Given their national spread and influence, co-ops were successfully used by the Congress as an instrument of political patronage and source of funds since the 1950s. In fact, the foundation of the grand old party’s long innings in power in two key states – Maharashtra and Gujarat — can be traced to its rural stranglehold over sugar and milk co-ops which the BJP has been steadily unraveling since 2014.

UPA ally Pawar, who broke away from the Congress in 1999 to form the Nationalist Congress Party  (NCP), is the least qualified to impart lessons in Constitutional propriety. His fiefdom is a direct outgrowth of the Congress eco-system.  

Gone are the days when co-op initiatives were confined to sugar and milk. Today they extend to almost every area of human endeavor from agro-processing, marketing, housing, storage, textile, finance, fishery, labor, even industries. No party with a permanent stake in politics can afford to ignore the powerful energies, howsoever indirect, they can unleash during elections.

The process of weakening the Congress’ influence in Gujarat, in fact, commenced in the early 1990s and gathered momentum after Modi became chief  minister in 2001. Control over credit societies and Amul’s district unions was the impetus behind the saffron surge. Dairy co-ops are big business in Gujarat. They cover almost cent per cent of the state’s 17,000 villages.

The success of Amul inspired other states. Studies show there may be nearly 200,000 dairy co-op societies and 330 co-op sugar mills running in the country. Cold statistics based on the 2019-20 annual report of the National Dairy Development Board show dairy co-ops bought 4.80 crore liters of milk from 1.7 crore members and sold 3.7 crore liters per day. Co-op sugar mills produce nearly 35 per cent of the country’s total output.

Most political analysts feel that it is the desire to strike long-term rural roots in Telengana, Tamil Nadu, and Andhra Pradesh that is behind the birth of the ministry of co-operation. The BJP has still to find its feet in these states in the face of strong regional sentiment.

The immediate goal, however, is to wrest control of the socio-political narrative in Maharashtra from the NCP-Congress whose corrupt leaders have eaten into the entrails of co-operatives and defiled the movement. The Pawar clan still wields considerable influence in the state’s nearly two lakh co-ops. Around 150 of the 288 MLAs are strongly tied to the apron strings of the sector.  More than half of the state’s11.24 crore population resides in rural areas. Co-ops are their life blood.

The BJP was hoping to romp home on its own in the 2019 state poll  by co-opting the co-operative sector leadership   from the ranks of the Opposition. Congress and NCP leaders were accordingly imported and given tickets, chief among them being the co-operative and education baron Radhakrishna Vikhe-Patil from Ahmednagar, the hub of the co-op sector. Radhakrishna’s grandfather, Vitthalrao, is believed to have set up the first co-operative sugar mill in Asia in 1948. Other co-op barons like the Patils of Sangli and Pune along with the Mahadiks of Kolhapur,  Bhosales of Satara, Pichads of Ahmednagar, Kshirsagars of Beed and Naiks of Thane also went saffron overnight. More than 100 sugar barons were in the fray, the overwhelming majority from the BJP-Shiv Sena.

Though the BJP emerged as the single largest party with 101 seats, the results proved that considerable ground still needed to covered. More importantly, that Pawar was still a potent force.

A local agricultural expert (Ramesh Chille) told a financial daily on the eve of the 2019 state poll: “There is a pattern and hierarchy in co-operative politics. The big barons don’t directly connect to the masses. They give power to their lieutenants who control daily operations at the village and taluka levels. The life of a farmer is knotted with the co-op sector in rural areas. Credit, water supply, government schemes and benefits come through co-op barons and their men and farmers have to remain loyal to them.”

Sugar co-ops are major power centers in the state’s economy. Those in control ensure that farmers survive on their munificence. “Even the slightest dissent can have terrible consequences. His sugarcane will not be lifted for crushing, loan proposals in district banks be blocked, and water to his field cut,” said Chille.

Such are the pernicious circumstances in which the Pawar clan and other politicos have prospered. The progress made in the early years of the co-op movement lies in tatters. Co-operative banking which got as huge boost after the setting up of the National Bank of Agriculture and Rural Development (NABARD) in 1982 has become a byword for open loot. The Rs 6,500 crore scam involving the Punjab and Maharashtra Co-operative (PMC) Bank in which the hard earned savings of 8.6 crore depositors came under a cloud has shaken the system to the core.

No less scandalous is the case of the Satara-based Jarandeshwar Co-operative Sugar Mill in which assets worth Rs 65 crore (at 2010 prices) were recently attached by the Enforcement Directorate under an anti-money laundering law.

The attached properties belong to a firm controlled by the state’s deputy chief minister Ajit Pawar, nephew of Uncle Sharad, in connection with the Maharashtra State Cooperative Bank (MSCB) scam. The Jarandeshwar heist has put the future of lakhs of farmers on the block.  The sugar mill was started 40 years ago with the membership of 27,000 farmers on a capital outlay of Rs 10 crore.

Scores of such mills have been palmed off to private players after being bankrupted by politicians in league with the MSCB.

Noble souls like Sitaram Yechuri who still cannot fathom why Amit Shah has been chosen to run the Co-operation ministry deserve our pity. And as for Sharad Govindrao Pawar, the less said the better.  Let us not forget that it is the Modi regime which bestowed upon him the second highest civilian honor of the country, the Padma Vibhushan.


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About the Author

Sudhir Kumar Singh
Sudhir Kumar Singh is an independent journalist who has worked in senior editorial positions in the Times Of India, Asian Age, Pioneer, and the Statesman. Also a sometime stage and film actor who has worked with iconic directors like Satyajit Ray and Tapan Sinha. He writes regularly for the HinduPost as consulting editor.