Mumbai: After asking them to invest 20% of their profits in public works, the State government has decided to insure thousands of cooperative societies against financial uncertainties.
According to government estimates, district cooperative banks hold around ₹25,000 crore in deposits, while other cooperatives have much more at stake financially. Most of them are facing a credit crunch.
Cooperation Minister Subhash Deshmukh said on Monday that a proposal for the insurance scheme has already been chalked out. “We will present it to the State Cabinet and to the Chief Minister in the next meeting for final approval. It is important to insure, and rebuild confidence in, cooperatives,” he said.
The State government had recently asked all cooperative societies, except those related to housing, to contribute 20% of their profits towards ‘public purposes’ and help strengthen smaller societies. The revenue will be used for social causes, such as dealing with natural calamities, drought, issues of environment, health, education, agriculture and sports, and strengthening women’s facilities, senior officials said.
Speaking about the insurance plan, Mr. Deshmukh said, “In the past, several cooperatives crashed without offering any refund to members. It is imperative some support in the form of insurance is provided to these cooperatives.” Insuring cooperatives — mostly district cooperatives and those related to the farming sector — against financial calamities will fortify up to 15,000 organisations at the district and urban level, he said.
The demand to insure cooperatives was forwarded by the federation of cooperatives headed by Kaka Koyte, who has been petitioning the government for a better support system for the sector.
