Many people were surprised when Union Home Minister Amit Shah was given the additional charge of the newly created Ministry of Cooperation. The Cooperation Ministry was earlier a part of the Ministry of Agriculture.
But it was no amazement for those acquainted with how the cooperative movement plays a role in politics – state as well as national politics – and how BJP used the cooperatives from the state to the village level to strengthen its grip over the state politics in Gujarat that has kept the Congress out of power since 1995.
Although BJP had captured political power and formed its government in the state, it felt that it has no complete grip over the state power structure because cooperatives with an annual turnover of thousands of crores of rupees were still in the hands of the Congress leaders, having immense influence over the voters through cooperatives in rural and semi-rural areas. The charge to break the stranglehold of the Congress over Gujarat's cooperative movement was given to Amit Shah when, barring one cooperative bank, all other cooperative banks and institutions were under the control of Congress.
Amit Shah's strategy helped the BJP wrest control over all the cooperative institutions in the state, thus throwing the Congress out of power from every institution in the state: from Gujarat Cooperative Milk Marketing Federation (GCMMF) with an annual turnover of Rs. 39,000 crores, Amul and other milk dairies, to cooperative banks and agriculture market committees. This helped BJP establish its political strength and influence in rural and semi-rural areas as well. Amit Shah himself got elected as chairman of the Ahmedabad District Cooperative Bank that attracted national headlines when it secured deposits of Rs. 745.59 crores of spiked or banned currency notes just within five days after the announcement of demonetisation by Prime Minister Narendra Modi on the night of November 14, 2016.
Each of 18,000 villages in Gujarat has a 'mandali' or what is known as a cooperative society that is directly involved in the procurement of milk from milk producers and the supply of agricultural inputs as also providing micro-finance facilities through primary agricultural credit societies (PACS) to the farmers. These cooperative societies having several office-bearers have immense influence over the local villagers. "This network at village level helps the political parties to propagate their messages, convince the voters at the micro-level about the policies of the political party and bring people to polling booths to vote in their favour," says Kailash Gadhvi, a Congress leader and a chartered accountant by profession. He says that "politics and cooperatives are linked."
Gadhvi's opinion is supported by a research article titled "Cooperatives and Politics" authored by BS Baviskar and published on March 23, 1968, in Economic and Political Weekly. Baviskar says that "…..cooperatives perform certain latent political functions which are significant from the point of view of the political development of a democratic society." Baviskar's conclusion is based on his study of the cooperative movement in rural Maharashtra. Baviskar also quotes in his article British politician of the Labour and Cooperative party who says that "cooperatives should play an active role in politics."
And Baviskar's study is not wrong because the basic political strength of Sharad Pawar, Maharashtra's political strongman, and his family lies in control over cooperative institutions, particularly cooperative sugar mills, in Western Maharashtra. Former Maharashtra chief minister Devendra Fadnavis of the BJP once told media persons that though BJP was in power in Maharashtra, the cooperative institutions that controlled the local economy were in the hands of the NCP and the Congress.
Modi separated the cooperation department from the Agriculture Ministry, converted it into a ministry and gave its charge to Amit Shah, having the experience of grabbing the control of the cooperative institutions from the Congress and using them for setting up a solid political base for the BJP at village level in Gujarat. PM seems to be replicating the party's Gujarat experiment in the rest of the country to create a voter base for the party at the village level by pushing others out, perhaps to realise his dream of BJP continuing in power next few decades.
According to National Dairy Development Board's 2019-20 report, there are 1,94,195 cooperative dairy societies and 330 cooperative sugar mills. NABARD's 2019-20 report says that India has 95,238 PACSs and 33 state cooperative banks. The state cooperative banks reported deposits of Rs. 1,35,393 crores and paid-up capital of Rs. 6,104 crore, while the district central cooperative banks (DCCB) paid-up capital stood at Rs. 21,447 crore and deposits at Rs. 3,78,248 crore. According to NABARD's annual report for 2019-20, DCCB's distributed Rs. 3,00,034 crore as short-term crop loans to farmers and state cooperative banks disbursed Rs. 1,48,625 crore to agri-processing industries like sugar mills and spinning mills etc.
Besides this, Urban Cooperative Banks (UCBs) and credit cooperative societies provide loans and banking services to many sectors that cannot get loans from regular banks. According to the Reserve Bank of India's 2019-20 report, there are a total of 1,539 UCBs with a total capital of Rs. 14,933.54 crore and advanced a loan of Rs. 3,05,368.27 crore.
There is so much money in rotation in the cooperative sector in the country when the cooperative movement is strong only in Gujarat, Maharashtra and Karnataka. The cooperative movement is feeble in other states, particularly north Indian states like UP, Bihar, Madhya Pradesh, Rajasthan, Uttarakhand, Haryana, Punjab, Himachal Pradesh, as well as other states, including those in Eastern and South India.
So, BJP wants total control over rural areas and India's farming sector with a view to having total control over the country's politics. India's leading scientist Pushpa Mittra Bhargava, while delivering a lecture at the Gujarat Vidyapith against permission to US company Monsanto to sell genetically modified (GM) seeds in India, said that those who control the agriculture of a country would also control the politics of the country. Under GM technology, farmers cannot grow their own seeds, and they will have to buy them from companies only.
Though Bhargava died in 2017, his lecture reminds me how Modi is now making a bid to have total control over India's politics by influencing the agricultural and semi-rural communities through cooperatives which in itself is not wrong. If the cooperative movement succeeds, it can bring huge economic change in the country as it has done in Gujarat and Maharashtra.
At the time of expansion of his cabinet, PM Modi said that the new Ministry of Cooperation had been established to take the cooperative movement to the grass-root level and make it a peoples' movement all over the country. One can understand how it can also change the country's politics, given the BJP's successful experiment in Gujarat and taking control of all cooperative institutions in the state.
As cooperative institutions get funding from the Centre, the Cooperation department in states will not suffer financially as the BJP is in power at the Centre and Amit Shah is holding the Cooperation portfolio. However, it will be a big challenge for Amit Shah to replicate the Gujarat experiment in other states. The business culture in other states, particularly the Hindi belt, is totally different from Gujarat and Maharashtra, so the cooperative movement in all other states failed. Will Amit Shah, affectionately nicknamed by BJP as 'Chanakya' of modern Indian politics, succeed? Only time will tell.
(The author retired from Indian Express as Principal Correspondent, and is now the Chief Editor of India Tomorrow )