With the Budget announcement to set up decentralised storage capacity, Union Cooperation Minister Amit Shah has said India will have the world’s largest decentralised storage capacity by the cooperative sector which will help farmers store their produce and sell at the right time to get a fair price.

“This will play an important role in (Prime Minister Narendra) Modi’s resolve to increase the income of farmers,” Shah said. In the next five years, the government will facilitate the establishment of new multipurpose cooperative societies, primary fisheries societies and dairy cooperative societies in every panchayat, he added.

Amending Act

In her Budget speech, Sitharaman announced a higher limit of ₹2 lakh per member for cash deposits and loans in cash by Primary Agricultural Co-operative Societies (PACS) and Primary Co-operative Agriculture and Rural Development Banks (PCARDBs).

New cooperative societies formed on or after April 2023, which commence manufacturing or production by March 2024 and do not avail of any specified incentive or deduction, are proposed to be allowed an option to pay tax at a concessional rate of 15 per cent similar to what is available to new manufacturing companies, she announced as such a step will promote growth of manufacturing in cooperative sector.

She also said Sections 269SS and 269T of the Companies Act will be amended to ensure there is no penalty for cash loan/transactions against primary co-operatives in cash less than ₹2 lakh, which was a major demand of the cooperative unions. Sitharaman also agreed to increase the threshold limit for cooperatives to withdraw cash without TDS. “It is proposed to enable co-operatives to withdraw cash up to ₹3 crore in a year without being subjected to TDS on such withdrawal,” she said.

With an estimated relief of about ₹10,000 crore, the government has allowed sugar cooperatives to claim payments made to cane growers for the period prior to the assessment year 2016-17 as expenditure.

Shah said the cooperative movement will get new direction and momentum and the sector will be more empowered. “Today, the unprecedented decisions taken in the Budget to strengthen the cooperative sector are a symbol of this resolution,” he said.

Hike in outlay

Though the Cooperation Ministry has received lower allocation of ₹1,150.38 crore for 2023-24, from ₹1,624.74 crore for 2022-23 (RE) due to discontinuation of some schemes previously run by Agriculture Ministry, the outlay for computerisation of PACS has been hiked to ₹968 crore for the next fiscal from ₹350 crore this year (RE).

To realise the vision of ‘Sahakar Se Samriddhi’, Sitharaman said the government has already initiated computerisation of 63,000 PACS with an investment of ₹2,516 crore. In consultation with all stakeholders and states, model by-laws for PACS were formulated enabling them to become multipurpose PACS. A national cooperative database is being prepared for country-wide mapping of cooperative societies.

Related Topics