Special session of Assembly discusses crisis in cooperative sector

A view of State Cooperative BankThiruvananthapuram: Kerala Chief Minister Pinarai Vijayan told the Assembly on Tuesday that the government would assist any scrutiny of accounts in cooperatives to detect black money. However, it could not countenance stalling the functioning of cooperative in the name of black money.

The Chief Minister was replying to the discussion on crisis, especially in the cooperative sector, following demonetisation at a special one-day session of the Assembly convened to discuss the issue. The discussion was taken up on a motion by Minister for Cooperation A. C. Moideen which said a serious situation had arisen because of demonetisation of currency of denominations 500 and 1000.

Referring to concerns among deposits about their money in cooperatives, Mr. Vijayan said that the government was guaranteeing them.  An all-party delegation would go to Delhi on Thursday to represent the issue of crisis in the sector before Prime Minister Narendra Modi and Finance Minister Arun Jaitley.

The Chief Minister said that demonetisation amounted to breach of promise and banking regulations.  The Central government’s actions targeted undermining of the cooperative sector in disregard to federal structure of the country.

The recommendations of various committees and government decisions had been aimed at weakening the cooperative sector to open the gates for the globalisation and foreign capital investment in the banking sector. An international conspiracy to destroy the cooperatives was to be doubted.

The Cooperation Minister said that directions had been issued to follow KYC norms by cooperatives. The district cooperative banks had implemented that strictly. Restrictions on withdrawals following demonetisation had paralysed the primary credit societies.

Congress leader Oommen Chandy said that the notification on demonetisation was in breach of law. When demonetisation was effected in 1978, it was done through an Ordinance which was later approved by the Parliament.  As much as 86.4 per cent of the value of currency in circulation had been declared illegal tender without making arrangements to replace them.  “This is criminal negligence. It is unpardonable.”

Veteran CPI (M) leader V. S. Achuthanandan said that demonetisation was like chemotherapy for cancer which affected every part of the system. People had died in queues. Many man hours had been lost.

He said that the BJP, which was in serious trouble over its treatment of dalits and minorities, had declared demonetisation to divert attention from the problem.

Opposition Leader Ramesh Chennithala said that restrictions of the type being brought now could be legally possible only under an economic emergency. The notifications of Central government were illegal.

The Opposition Leader said that demonetisation would hit the GDP. The unorganised sector was in crisis. The agriculture sector had been hit and day to day life had been disrupted.

Mr. M. K. Munner (Muslim League) noted that demonetised notes which could be used in petrol pumps could not be exchanged in a cooperative bank. The kind of anarchy that followed demonetisation had occurred in the country never before. An autocrat had landed the country in chaos.

Kerala Congress leader K. M. Mani said that if cooperatives are weakened, that would give way for money lenders.  Demonetisation, which was unconstitutional, had touched people of all walks of life.

BJP leader O. Rajagopal said that the ruling Front was speaking of corruption and irregularities in the cooperative sector and pushing the proposal for formation of Kerala Bank. The Opposition had said in the Assembly that the move was for a mass murder of cooperatives. Now, both had joined hands to protect black money.

He said that the restrictions on cooperatives were part of a nationwide action. Though cooperatives did good work, they were also serving as conduit for black money.  Many pretending to be gentlemen would be exposed by demonetisation. “I cannot be part of a move to protect black money,” he said opposing the stand of rest of the House.

Mr. Suresh Kurup (CPI -M) said that absence of transparency and secrecy was anathema to democracy.  Much of black money was in gold and land and in banks abroad.

Muslim League leader P. K. Kunhalikutty said that the Indian values and democracy were in danger. The people who the Prime Minister consulted failed to see the consequence of demonetisation.

Mr. S. Sarma (CPI-M) said that RBI had been turned into a rubber stamp. Demonetisation was a warrant against right to life.

For further reading:

Kerala Assembly seeks authorisation to cooperatives to exchange demonetised notes