The Government on Tuesday announced a Rs 900-crore allocation in the Budget 2022-23 for the newly set up Union Ministry of Cooperation, besides cutting down the Alternate Minimum Tax (AMT) on cooperative societies to 15 per cent and surcharge to 7 per cent.
Out of Rs 900 crore, Rs 350 crore has been allocated for the Digitalisation of Primary Agriculture Cooperative Societies and Rs 274 crore for Prosperity through Cooperatives– two centrally sponsored schemes of the Ministry.
“Currently, cooperative societies are required to pay alternate minimum tax at the rate of 18.5 per cent. However, companies pay the same at the rate of 15 per cent. To provide a level playing field between co-operative societies and companies, I propose to reduce this rate for the cooperative societies also to fifteen per cent,” Union Finance Minister Nirmla Sitharaman said in her budget speech.
Those cooperatives having total income of more than Rs 1 crore and upto Rs 10 crores will have reduced surcharge on cooperative societies from 12 per cent to 7 per cent.
“This would help in enhancing the income of cooperative societies and its members who are mostly from rural and farming communities,” the Minister said.
Since the formation of the Cooperation Ministry, the Government has been taking steps to boost the cooperatives in the country, banking on them to help achieve its ‘Atmanirbhar Bharat’ mission and target of doubling the income of farmers across the States.
There are about 30 lakh cooperatives in the country. Managing Director of National Cooperative Development Corporation (NCDC) Sundeep Nayak hailed the budget provisions. He said digitisation of cooperatives will help bring transparency, ensure better access to market and finance, facilitate social benefits, and ensure the benefit of farm loans reaches the last mile because in a few states agri-credit is still disbursed through PACs.
Primary agriculture cooperative societies (PACs) — commonly known as agri-cooperative credit societies — are village-level lending institutions based on cooperative principles. They provide short and medium term loans to rural people to meet their financial requirements.
The Centre has decided to develop a national database of cooperatives that will help in better implementation of the proposed national policy on cooperatives to be announced soon.