1] Limits of cooperation: On reforms in cooperative sector (GS 2 Cooperatives)

Context –

  • The 97th Amendment to the Constitution, which went into effect in 2012, was a significant step toward instilling autonomy, democratic functioning, and professional management.
  • The recent Supreme Court decision declaring the amendment unconstitutional to the extent that it applied to cooperative societies under state control is a reminder that even well-intentioned reform efforts cannot come at the expense of the Constitution’s quasi-federal principles.

Main Feature of the 97th amendment –

  • The amendment added Part IXB, which deals with cooperative societies, to the Constitution.
  • Part IXB defined the contours of what state cooperative society legislation should include, among other things, provisions on the maximum number of directors in each society, reservation of seats for SCs, STs, and women, as well as the length of terms of elected members.
  • The Court had to decide whether the 97th Amendment impacted the legislative domain of state legislatures, necessitating ratification by half of them in addition to the two-thirds majority required in Parliament.

Verdict of the Court –

  • The amendment was declared invalid by the Gujarat High Court due to a lack of ratification.
  • The Supreme Court upheld the lower court’s decision that the amendment was unconstitutional, but only in relation to state-run cooperatives.
  • The complex amendment would apply to multi-State cooperative societies over which Parliament had legislative authority.

Significance of the decision –

  • The requirement that certain types of constitutional amendments be ratified by 50 percent of state legislatures is a significant limitation on Parliament’s amending power.
  • The Union government believed that ratification was unnecessary because the 97th Amendment did not change the subject of ‘cooperative societies’ in the State List in any way, and it only outlined guidelines for any cooperative law that the Assemblies might enact.
  • The ratification requirement will apply if there is any attempt to fetter State legislatures in any way while enacting a law in their own domain, even if there is no attempt to change the distribution of legislative powers between the Union and States, according to the ruling.
  • As a result, the amendment that sought to prescribe the outlines of State laws on a State subject failed to pass constitutional muster in the absence of ratification by the States.

Conclusion –

  • The decision could mean that some of the concerns raised by some about the negative consequences of forming a new Ministry of Cooperation based on federal principles are justified.
  • However, there is no denying that the potential for cooperative societies to become more democratic and autonomous remains unaffected.


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