Context: Recently, Union Home and Cooperation Minister announced that the Centre has decided to amend the Multi State Cooperative Societies (MSCS) Act, 2002.
Cooperative Society

• It is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned enterprise.
• Cooperatives are democratically owned by their members, with each member having one vote in electing the board of directors.

Cooperatives are a state subject.

• But there are many societies such as those for sugar and milk, banks, milk unions etc. whose members and areas of operation are spread across more than one state.

Multistate Cooperative Societies
It means a society registered or deemed to be registered under the MSCS Act, 2002 and includes a national co-operative society and a federal co-operative.
The Act provides for the formation of both the types of cooperative societies viz;

• Primary (with both individual and institutional members)
• Federal Cooperatives (with only institutional membership)

It is not necessary that a society should have branches in more than one state.

• It may have branches limited to one state and it shall not cease to be a multi-state co-operative society, so long as it serves the interest of members in more than one state.

Powers

• Their board of directors has representation from all states they operate in.
• Administrative and financial control of these societies is with the central registrar.
• No state government official can wield any control on them.

Multistate Societies in India

• Maharashtra has the highest number of such societies.
• Credit societies constitute the bulk of registered societies followed by agro-based ones (which include sugar mills, spinning mills).
• There are 96 multistate cooperative dairies and 66 multistate cooperative banks.

Need for Amendment
Lack of Transparency

• The system for state-registered societies includes checks and balances at multiple layers to ensure transparency in the process.
• These layers do not exist in the case of multistate societies.
• Instead, the board of directors has control of all finances and administration.

Lack of State Control

• There is an apparent lack of day-to-day government control on such societies.
• Multistate cooperatives need not have to submit multiple reports to the state registrar, unlike state cooperatives.

Limited Powers of Central Registrar

• The central registrar can only allow inspection of the societies under special conditions.
• The on-ground infrastructure for central registrar is thin — there are no officers or offices at state level, with most work being carried out either online or through correspondence.