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Business News/ Politics / Policy/  Does the Maratha unrest also stem from corruption in Maharashtra’s co-operatives?
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Does the Maratha unrest also stem from corruption in Maharashtra’s co-operatives?

Only 159 Maratha families control the entire cooperative industry in Maharashtra

Maharashtra chief minister Devendra Fadnavis said the reforms were aimed at saving the co-operatives from those who had exploited the industry for their benefits.Premium
Maharashtra chief minister Devendra Fadnavis said the reforms were aimed at saving the co-operatives from those who had exploited the industry for their benefits.

Mumbai: Reacting to the ongoing Maratha protest across Maharashtra, chief minister Devendra Fadnavis last week ruled out the possibility of the “corrective steps" his government had taken in the state’s co-operative sector being the main trigger for unrest. He conceded that a “large number of people were unhappy" over the co-operative sector “reforms" but insisted that 95% of the people participating in the Maratha protest march “were self-inspired to do so".

Fadnavis gave this answer to a question if corruption in the co-operative sector and consequent steps taken by the Bharatiya Janata Party (BJP)-led government were responsible for the Maratha unrest since the predominantly agrarian Maratha community heavily depended on the co-operative banks.

Dalit leader and president of Bharipa Bahujan Mahasangh Prakash Ambedkar last week told a Marathi news channel that measures initiated by the BJP-led government in the co-operative sector could be one of the reasons behind the Maratha protests.

“The government has started inquiries into co-operative scams and many people are feeling the heat. Only 159 Maratha families control the entire cooperative industry in Maharashtra and the ordinary poor Maratha is not part of this industry. The poor Marathas have to decide to what extent they are going to support the Maratha leaders of co-operatives. If there was no corruption in the co-operatives, the ordinary Maratha farmer would not have been forced to commit suicide," Ambedkar had said.

Maharashtra’s co-operative sector—spanning district co-operative banks and primary agriculture credit societies (PACs), sugar and milk co-operatives—is the backbone of the state‘s agrarian economy. The state has 31 district co-operative banks which operate through their 21,000-plus PACs. An official at the state’s Pune-based cooperation commissioner’s office said on the condition of anonymity that a few more than 7,000 of these 2,1000-plus PACs are functional and the rest existed only on paper.

“Due to irregularities, corruption, and mismanagement, a large number of PACs are not functioning. Another reason is that most of these non-operational PACs have nil activity in their accounts because farmers holding accounts there have defaulted on previous loans and are not eligible for fresh credit," said the official.

In the 2016-17 fiscal, Maharashtra’s crop credit outlay to the co-operative banks for disbursement among farmers amounted to nearly 17,500 crore. This credit outgo constituted 34% of the total crop credit plan even though the district co-operative banks count more than 60% of the state’s 13.7 million farmers as their members. This skewed ratio between the number of members and credit share in the annual plan is explained by the fact that nearly 35% of the state’s farmers do not have access to formal credit for a variety of reasons including default on previous loans, the official said.

Maharashtra’s caste dynamics explains the connection between the weakening of the co-operative sector, agrarian crisis, and the Maratha anger manifest now. Of the 33% Maratha population in Maharashtra, more than 80% are dependent on agriculture, according to Maratha activists and entrepreneurs who are taking part in the Maratha protest. Said Aurangabad-based entrepreneur Mansingh Pawar, who participated in the Aurangabad Maratha Kranti Morcha on 9 August which began a series of similar protests across the state: “The ratio between number of people dependent on agriculture in India and among the Marathas in Maharashtra is skewed. On an average in India 55%-60% people are dependent on agriculture income but 80% of Maharashtra’s Marathas directly or indirectly survive on agriculture," Mansingh Pawar said.

As the primary sources of credit in rural Maharashtra, the district co-operative banks have a strong relationship with the farmers and the developments affecting the co-operative banks almost always affect the farmers. Since October 2014 when the BJP-Shiv Sena government came to power in Maharashtra, a number of legislative initiatives have been taken to reform the sector.

For instance, the government has carried out a recommendation frequently made by the Reserve Bank of India to not allow those directors of a co-operative bank who were on the board of directors when irregularities happened at the banks to contest elections to the board for two terms or ten years. Another initiative is the appointment of two external experts to boards of directors of a co-operative other than the elected directors. These two measures, especially the one disqualifying directors from contesting elections, have hit the Nationalist Congress Party (NCP) and the Congress hard as most co-operatives are controlled by their politicians.

Mint has reported these reforms in detail and the politics around them.

Also Read:BJP game plan in Maharashtra: Squeeze out NCP from its stronghold

Deepak Pawar, professor of political science at Mumbai University, said the 45-year-long Congress and NCP (after 1999) rule in Maharashtra was dominated by the Marathas who in turn controlled the levers of the co-operative industry. “NCP president Sharad Pawar recently said that the echelons of Indian judiciary comprise some 150-odd families. Same could be said of Maharashtra’s co-operative sector. Some political families affiliated to Congress and NCP rule the co-operative sector," he said pointing out that though the Marathas ruled Maharashtra and its co-operative sector, the larger Maratha population was left poor because the Maratha elite exploited the co-operatives for their own benefit.

Fadnavis said the reforms were aimed at saving the co-operatives from those who had exploited the industry for their benefits. “I know these people are not happy with the reforms. But the larger Maratha community should note that the people who are replacing these corrupt co-operative sector leaders are from the community only," Fadnavis said.

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Published: 21 Sep 2016, 01:35 AM IST
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