Highlights of the Bill
- The Constitution (One Hundred and Sixth) Amendment Bill, 2006 proposes to insert a new part IX B in the Constitution (adding Articles 243ZH through 243ZT), which provides for incorporation, regulation and winding up of co-operative societies.
- The Bill specifies the maximum number of Board members and the tenure of the members. Elections have to be held before the expiry of the term of the Board.
- The Board of a co-operative society that has government shareholding or loans can be superseded for the maximum period of six months.
- State governments can co-opt upto two nominees on the Board of a co-operative society.
Key Issues and Analysis
- The Constitution lays down the framework for governance and the relationship of citizens and various state institutions. It is debatable whether governance mechanisms of voluntary bodies such as co-operatives should be specified in the Constitution.
- Co-operative societies may be superseded without giving the Board an opportunity to explain the charges.
- Only co-operatives with government shareholding can be superseded. This contradicts the Banking Regulation Act, 1949, which allows co-operative banks to be superseded by the Reserve Bank of India .
- The powers of the Registrar of co-operative societies are not specified in the Bill. This leaves scope for interference by the Registrar in the running of co-operative societies.
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