Govt package through NABARD to boost coop

Mumbai Dec 29: The revival package for short term cooperative credit structure, announced by the Union Government with a tentative sum of Rs 13,596 crore, is all set to boost cooperative movement in the country.

Top officials of the National Bank for Rural and Agricultural Development (NABARD), entrusted with the responsibility to implement the package in close collaboration with the Reserve Bank of India, said 11 states had already accepted to implement it. The package, based on recommendations of the Task Force, set up under the Chairmanship of Prof. A.Vaidyanathan, was announced in the Union budget for 2006-07.

Andhra Pradesh, Gujarat, Madhya Pradesh, Maharashtra, Orissa, Punjab, Rajasthan, Sikkim, Tamil Nadu, Uttaranchal and Uttar Pradesh and Union Territory of Dadra&Nagar Haveli have already accepted to implement the Package. These states account for 60.7 per cent of total Primary Agricultural Credit Societies (PACS) and 70 per cent of total DCCBs in the country.

States of Andhra Pradesh, Madhya Pradesh, Maharashtra, Rajasthan, Orissa, Uttaranchal, Uttar Pradesh and Gujarat have also executed memoranda of understanding (MoUs) with the Union Government and NABARD for implementing the Package.

The package aims at integrated development of short term cooperative credit structure and seeks to provide among other things financial assistance to wipe out accumulated losses and increase capital base so as to make the system financially healthy and sound, a NABARD official told UNI here today. The package also aims to introduce legal and institutional reforms by amending the state cooperative societies acts making the cooperative structure fully autonomous, member centric, member driven, self-reliant and professionally managed.

Technical assistance by introducing Common Accounting System, efficient Management Information System and Internal Control Systems, proper Human Resources Development System and application of Information Technology at all levels is another aim of the package.

The financial assistance under the package is tentatively estimated at Rs 13,596 crore to be shared by the Centre, State Governments and cooperative credit structure (CCS). The exact amount of financial assistance and share of each agency will, however, be based on the special audits of CCS. Implementation of the scheme is guided and monitored by the National Implementing Monitoring Committee (NIMC), constituted by the Union Government under the Chairmanship of Governor of Reserve Bank of India. Similar Committees have been set up for monitoring the performance at State and District levels. These Committees will be assisted by dedicated support teams constituted by NABARD, which will help in implementing the scheme.

NABARD has also constituted State Level Task Forces in States which have executed MoUs. The Task Force will review the performance of SCB and CCBs in the State on aspects relating to good governance, compliance with statutory requirements of regulatory and supervisory norms and actions suggested by RBI and NABARD. As prescribed in the package, cleansing of the balance sheets of the CCS units will be based on a special audit of the accounts as on March, 31, 2004 to arrive at the amount of accumulated losses and erosion in the assets.

NABARD has designed formats for special audits of PACS and also developed a manual for the use of auditors. Requisite number of Master Trainers (about 500) have been trained in six states that include Andhra Pradesh, Gujarat, Madhya Pradesh, Maharashtra, Orissa, and Rajasthan who in turn have trained the auditors. The training of auditors is in progress in other States. The special audits have commenced in the States of Andhra Pradesh and Orissa.

It is pursuing closely with the State Governments to hasten the process of cooperative reforms and amendments to Cooperative Societies Act as required in the Package, the officials said , adding that Andhra Pradesh and Madhya Pradesh have already prepared a draft legislation for the purpose. Other States are in different stages of preparation of the draft bills. It is expected that by the end of February 2007, most of the States would have promulgated ordinance ushering reforms in the cooperative law.

It has already constituted separate Groups of Experts and consultants to suggest a Common Accounting System, MIS, Internal Control Systems, HRD initiatives etc. These Groups are expected to submit their recommendations by the end of January 2007.

NABARD has also initiated talks with various service providers for facilitating computerisation of the cooperative credit structure and was pro-actively following-up with remaining States for acceptance of the package and execution of MoUs.

UNI