Co-op credit system draws flak

The cooperative sector is unahappy over the recommendations of the Vaidynathan taskforce on revitalisation of cooperative credit structure.

The National Co-operative Union of India (NCUI), the apex body of the Indian co-operative movement, today said the taskforce's focus did not appear to be on strengthening of the co-operative credit institutions. As such, it's recommendations did not fulfill the aspirations of the co-operative sector.

Criticising the report for puting too many unjustified conditionalities, NCUI's president SS Sisodia said the Reserve Bank of India's interference in the urban cooperative banking sector was detrimental to the growth and development of these institutions.

Sisodia was speaking after being unanimously re-elected as the president of the NCUI for a five-year term. Gujarat State Co-operative Union Chariman GH Amin and Himachal Pradesh State Co-operative Union Chairman Sitaram Chauhan were elected vice presidents of the NSUI.

The taskforce, headed by Madras Institute of Development Studies (MIDS) Emeritus Professor A Vaidyanathan, was appointed on August 5, 2004, to formulate a practical plan of action to rejuvenate the rural credit co-operative structure.

The task force submitted its draft final report on December 30 last year for public debate and suggestions.

Sisodia said cooperators in all parts of the country should work together to build up the rural and urban cooperative credit structure in the country which was passing through a crisis. The economic growth of 8 per cent could be achieved only if priority was given to agriculture and cooperatives.