States yet to take a stand on Vaidyanathan report
The Centre is set to take a “final view” on the recommendations of the Vaidyanathan Committee report on the revitalisation of cooperative credit in July this year, when it plans to convene a meeting of the finance and cooperative ministers of stat...
By Prabha Jagannathan, TNN |
NEW DELHI: The Centre is set to take a “final view” on the recommendations of the Vaidyanathan Committee report on the revitalisation of cooperative credit in July this year, when it plans to convene a meeting of the finance and cooperative ministers of states here.
Although the Centre has already solicited the views of the states on the second report of the panel, only three states have thus far got back to the agriculture ministry with their views or signed MoUs with the government of India/Nabard for implementing the suggestions of the panel and start measures for revitalisation of the co-op credit structure. Cooperative credit structure, which is ailing badly in the country, is considered the most important arm of agricultural credit. Consequently, its health is crucial for easy and adequate credit flow and necessary for the farm growth of 3-4%, which would ultimately push the overall GDP to 7-8 per cent.
Sources in the farm ministry disclosed that all states would now be asked to furnish their considered views definitely by June end. At the meeting of the National Development Council (NDC) here this week, agriculture minister Sharad Pawar disclosed that “monitorable deadlines” would be set up to revamp the cooperative structure.
The Vaidyanathan Committee had recommended a Rs 14,839-crore revival package. The re-capitalisation formula proposed is a mix of grant from the Centre and soft loan support in case of need to the states for the cooperative credit system. According to the revised norms, this corpus is to be borne by the Centre, state governments and the cooperatives in the ratio of 53:31:16.
Of the Rs 670 crore assistance to be provided by the Centre includes Rs 46 crore for special audits, Rs 516 crore for designing and establishing accounting systems and computerisation at all levels and Rs 108 crore for training and capacity building of cooperative institutions. Conditions for revival of co-ops by states include cleaning up the balance sheets of cooperative banks, capacity-building and qualitative improvement of personnel in the system, institutional revamp and improving the regulatory regime.
In many states, cooperatives currently exist only in name with very little stakeholder participation in their management. For years no elections have been held. Government officials and ministers at the state level run the affairs of the so-called cooperatives.
Timely and hassle-free flow of credit at affordable rate of interest to farmers is a big challenge that the government faces. Credit is also required for providing improved post-harvest facilities and processing facilities to derive greater benefits from commodity production, he said.
Not surprisingly, NDC draft paper states “cooperative credit structure is the most important arm of agricultural credit, it is recommended that all state governments come forward to sign the MoU with the GoI/Nabard for implementing the recommendations of the Vaidyanathan Committee and initiate measures for revitalising the cooperative credit structure”.
Although the Centre has already solicited the views of the states on the second report of the panel, only three states have thus far got back to the agriculture ministry with their views or signed MoUs with the government of India/Nabard for implementing the suggestions of the panel and start measures for revitalisation of the co-op credit structure. Cooperative credit structure, which is ailing badly in the country, is considered the most important arm of agricultural credit. Consequently, its health is crucial for easy and adequate credit flow and necessary for the farm growth of 3-4%, which would ultimately push the overall GDP to 7-8 per cent.
Sources in the farm ministry disclosed that all states would now be asked to furnish their considered views definitely by June end. At the meeting of the National Development Council (NDC) here this week, agriculture minister Sharad Pawar disclosed that “monitorable deadlines” would be set up to revamp the cooperative structure.
The Vaidyanathan Committee had recommended a Rs 14,839-crore revival package. The re-capitalisation formula proposed is a mix of grant from the Centre and soft loan support in case of need to the states for the cooperative credit system. According to the revised norms, this corpus is to be borne by the Centre, state governments and the cooperatives in the ratio of 53:31:16.
Of the Rs 670 crore assistance to be provided by the Centre includes Rs 46 crore for special audits, Rs 516 crore for designing and establishing accounting systems and computerisation at all levels and Rs 108 crore for training and capacity building of cooperative institutions. Conditions for revival of co-ops by states include cleaning up the balance sheets of cooperative banks, capacity-building and qualitative improvement of personnel in the system, institutional revamp and improving the regulatory regime.
In many states, cooperatives currently exist only in name with very little stakeholder participation in their management. For years no elections have been held. Government officials and ministers at the state level run the affairs of the so-called cooperatives.
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Timely and hassle-free flow of credit at affordable rate of interest to farmers is a big challenge that the government faces. Credit is also required for providing improved post-harvest facilities and processing facilities to derive greater benefits from commodity production, he said.
Not surprisingly, NDC draft paper states “cooperative credit structure is the most important arm of agricultural credit, it is recommended that all state governments come forward to sign the MoU with the GoI/Nabard for implementing the recommendations of the Vaidyanathan Committee and initiate measures for revitalising the cooperative credit structure”.
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