Farmers' body terms NCDC Act 'anti-federal', calls it intrusion on States' rights

The Samyukt Kisan Morcha (SKM), the umbrella body of farmer groups that led the agitation against the now-repealed farm laws, has termed the recent amendment to the National Cooperative Development Corporation (NCDC) Act an "onslaught" on the federal rights of States. In a statement, the SKM said the amendment would divert resources from agriculture and rural industrial development, and that it was framed to suit the "corporate model of urban-centric development".

The NCDC Act, originally enacted in 1962, established a central body to finance and support cooperative societies, which play a vital role in India's rural economy. Parliament recently passed an amendment to the Act, significantly expanding the NCDC's powers. The amended law now allows the NCDC to directly intervene in cooperative societies, including subscribing to their shares, and extends its operations to non-agricultural sectors.

The SKM argued that these changes violate the Constitution's Seventh Schedule, under which "cooperation" is a State subject. Entry 32 in the State List gives State legislatures exclusive authority over cooperative societies. The SKM described the amendment as a "naked intrusion" by the Union government into the powers of the States. It also invoked the principles of the International Cooperative Alliance, which uphold autonomy, independence, and democratic control as fundamental principles of cooperation. The SKM said the amended Act, which permits the NCDC to directly intervene in cooperative societies and take their shares, violates these basic principles and facilitates the centralisation of power in the Union government.

One of the key objections raised by the SKM is the direct financial assistance to cooperative societies by the NCDC, which it says would bypass State governments and negate their control over cooperatives. This, according to the SKM, would consolidate cooperative institutions under the Union government's authority, potentially for political dominance over States. The statement further alleged that this reflects "the authoritarian character of the corporate class fully endorsed by BJP-RSS combine".

The SKM also pointed to a Supreme Court order from 2021, in which the Court held that the Union government has limited powers to intervene in cooperative societies, as they are under the jurisdiction of State governments. The SKM alleged that the amendment was brought in to nullify that order, thereby overriding judicial restraint on central intervention.

Emphasising the importance of cooperatives in rural India, the SKM said: "Cooperatives are the soul of rural India and are capable of bringing widespread developments in the villages." It expressed concern that the amended Act permits the NCDC to operate in non-agricultural sectors and abolishes the stipulation of developing industries in rural regions. This, the SKM said, would divert resources meant for agriculture and rural industrial and infrastructure expansion towards urban-centric development, which aligns with the corporate model.

The SKM's statement adds to the ongoing debate over the balance of power between the Centre and States in India's federal structure. The Union government has yet to respond to the allegations.