New Audit Order Mandated for Multi-State Cooperative Societies

Cooperative societies in India exist where state power and central power meet. Cooperation is a State subject under Entry 32 of the State List. But societies that work across more than one state fall under Entry 44 of the Union List. This lets Parliament make laws for them. To make the sector stronger, the 97th Constitutional Amendment Act, 2011 added a new Part IXB to the Constitution. It also added a Directive Principle, Article 43B. This asks the state to help cooperatives that run on democratic, autonomous and professional lines. Part of this amendment was later challenged in court. The Supreme Court said that rules meant for state-registered cooperatives were not valid. This was because state legislatures had not approved them. But the parts about multi-state cooperative societies (MSCS) were upheld. Parliament has clear power over them. This ruling is why the Centre can legally control MSCS bodies directly.

Based on this constitutional power, Parliament passed the Multi-State Co-operative Societies (Amendment) Act, 2023. It made rules stronger on elections, grievance redressal and audits for MSCS. These include large milk unions, sugar federations, housing societies and credit institutions. They work in several states. The newly created Ministry of Cooperation has used this law to push for better, more transparent management of cooperatives. The idea is 'Sahkar se Samriddhi' (meaning: prosperity through cooperation).