Amit Shah’s Ministry of Cooperation an assault on federalism: Thomas Isaac interview

In an interview with TNM, former Kerala Finance Minister Thomas Issac said the move to have a Union Ministry for Cooperatives is politically motivated, especially given Amit Shah’s political past.
Kerala Finance Minister Thomas Isaac wearing a blue kurta smiling
Kerala Finance Minister Thomas Isaac wearing a blue kurta smiling
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This interview is a part of TNM's reader-funded Cooperative Federalism Project. Indian residents can support the project here, NRIs, please click here.   

“Many people say 'cooperation' is a state subject. I just want to say that the Ministry of Cooperation set up by PM Modi will function to bring all states together. There is no conflict with any state, we all will work together and take this movement forward,” Union Home Minister Amit Shah said while addressing the first Cooperative conference in New Delhi on September 25. Two months prior, in early July, when the Union government announced the formation of the Union Ministry of Cooperation — headed by Amit Shah — it raised many eyebrows, for “Cooperative Societies” is a state subject. Despite assurances from the Union government, many still fear that taking over cooperatives is a move by the BJP government to weaken the federal structure of the country. 

Former Kerala Finance Minister Thomas Isaac, who has been vocal about such moves of the National Democratic Front (NDA) to undermine the federal structure, had come out strongly against the formation of the ministry, asking if there is a hidden agenda to repeat what Amit Shah did in the Gujarat cooperative sector. Isaac who is also a senior leader of the ruling CPI(M) in Kerala has held the finance portfolio twice — 2006 to 2011 and 2016 to 2021. In an interview with TNM, Isaac says that the Ministry of Cooperation is a political move by the BJP to make inroads into states and Kerala will fight it tooth and nail.

Cooperatives is a state subject. Then why, according to you, has the Union government suddenly made a union ministry for it? And the portfolio has been allocated to Amit Shah. How do you see this?

Well, that precisely is the question — what is the objective of the new ministry when cooperatives is a state subject. If at all the Union government doesn't have any locus standi in the matter, it is with respect to the Multi-State Cooperative Societies (MSCS), but that doesn't require a ministry. Besides, it was set up without consulting the states, including its objective. 

Incidentally, the charge has been given to Home Minister Amit Shah. But, Cooperation has nothing to do with the Home portfolio. The record of Amit Shah has been in Gujarat, where he was instrumental in taking over some cooperatives from the Congress and has become powerful ways within which the BJP operates. I feel that is a purely politically motivated move. One by one, the BJP has been trying to control this kind of popular forum. 

That is precisely the thinking behind the new move. This is not isolated. If you look at the recently passed legislation, there is a common denominator — undermining the states' rights, including the dissolution of a state itself. So we have to read this move (of forming the ministry) in the context of the BJP's nationalist narrative of federalism, and Amit Shah’s political past. 

We don't really know what this Ministry will do, but Amit Shah gave certain hints. At the recent National Cooperative Conference, he said that the Union government will soon amend the Multi-State Co-operative Societies Act, 2002, to facilitate the functioning of multi-state cooperative societies. How do you view this?

The Multi-State Cooperatives are a reality, brought in by the previous and the present governments. Obviously, they (the Union government) want to support the MSCS — fund and support it — to develop them as a parallel structure to the state registered cooperative societies. With the setback they received in the Supreme Court, which upheld the Gujarat High Court's judgement (it struck down certain provisions of the 97th constitutional amendment and held that the Parliament cannot enact laws with regard to cooperative societies as it is a state subject), it has become difficult from the Union government to intervene in the functioning of the state cooperative societies. I think their strategy would be to promote Multi-State Cooperative Societies, which will be under the Union government.

Amit Shah also said that there is a need to increase the number of Primary Agricultural Credit Societies (PACSs). On the face of it, these do look like amendments that are necessary. If the opposition parties oppose them, it can be looked upon as criticism for the sake of it.

The Union government has no role in the Primary Agricultural Credit Cooperatives; that completely falls within the ambit of state Registrar of Cooperative Societies and the state-level apex bodies. The only intervening agency is National Bank for Agricultural and Rural Development (NABARD), and I don't know what they are upto. Their (the Union government) statements are not clear on how they can intervene with the functioning of the banks. But, that would be against the existing legal framework, and it will be resisted. It is, however, obvious that they are cooking up something. 

Do you firmly believe that there is no good intention behind such a ministry?

Have discussions with the states; this is a state subject. What prevents them from holding a discussion with the states and reach a consensus. These are unilateral moves by the Union government, which are not right.

Let us move to the issue of cooperatives in states. How will such a ministry impact the cooperatives in states?

Multi-State Cooperative Societies are under the central legislation (MSCS Act), but the Union government cannot form state cooperatives. Whether to allow that or not will depend on the Cooperative Registrar in the state. As far as Kerala is concerned, we have the most powerful cooperative system in the country. The credit cooperative system is still a major component of the agricultural loans in Kerala, unlike most other states. For example, there are the Uralungal Labor Contract Co-operative Society (ULCCS) and Kerala Dinesh Beedi workers' Central Co-op Society, which have done exemplary services to society.

Will these societies in Kerala be adversely affected by the new Union ministry?

Cooperatives are going to have a critical role in Kerala's future growth. The Left has a very clear perspective about the development of our state. Its strategy includes redistribution to ensure the poor of the basic things, which is a big tradition of Kerala. Now that we have securitised a part of the taxes to mobilise funds for big infrastructure projects in the state, we also want to change our economy into knowledge-intensive techniques, with social enterprising playing an important role. We promote private enterprises by providing them with opportunities; but at the same time, there would be micro, small scale units particularly in the livelihood sector. The state also has big objectives for the cooperative sector. 

There is also the issue of federalism. What would be the ministry's impact on the federal structure and rights of the states? Amit Shah says this is not a move against the states, but it will work with the states.

BJP's whole record is undermining the state power, in every sector. Be it law and order, development or finance, they have made inroads into the state powers. Nobody is going to take Amit Shah's word for face value.

Amit Shah recently said that the cooperatives decide the political fortunes in states like Kerala and that cash-rich cooperatives in many states are controlled by political parties, such your party, the CPI(M), in Kerala. How do you react to this?

The BJP is controlling cooperatives in Gujarat. Political parties are not bad; they are part of democracy. His problem is that the BJP in Kerala does not have any say (in the running of cooperative societies). CPI(M) has a major influence in cooperatives, so has the Congress party. While CPI(M) is a major force, 40% of the cooperatives in the state are controlled by Congress.

In Kerala, BJP has little influence, and he (Amit Shah) better accept it. Kerala is different, its secularism is strong. His comments show what he has in mind. The BJP is trying to make inroads into Kerala by setting up the Multi-State Cooperatives, by setting up Nidhis under the Companies Act; they call it Hindu banks. They want to communalise even this. These attempts will not succeed in Kerala because we have strong secular traditions, particularly in the Hindu community. 

Renaissance in Kerala was led by saints whose spiritualism was above the religious divide. The slogan of Kerala's renaissance was not dependent on a person's religion or caste. BJP's slogan is that for a person to be good, he needs to be a Hindu. This won't be accepted even by the Hindus in Kerala. Amit Shah better come to terms with that.

Would you, however, agree that the way cooperatives are managed, especially in Kerala, needs an overhaul? We recently saw the Karuvannur bank scam where many people lost their money. Where have states and parties gone wrong? What should be urgent corrective measures?

Corrective measures have to be taken. One, the system of audit has to be made rigorous. Two, there should be professional training for those who run it so that they take professional decisions. The salary should be on par with the banking sector and hence they should deliver service at that level. 

This issue (the Karuvannur bank scam) has come up and we [the CPI(M)] would address it. As I said, cooperatives are going to play a crucial role in Kerala development. We would clean it up and take corrective steps. The CPI(M) has decided that the party committees will examine what happened while the government will take action. There is zero tolerance for any level of corruption in the cooperatives. 

You are pointing out the corruption in cooperatives, but call out the corruption happening at the central level. Look at the level of corruption that has been happening with no accountability, including in the case of the Rafale deal, the Prime Minister Cares Fund, the electoral bonds.

Will Kerala continue to oppose the Union government's takeover of another state subject?

We will fight tooth and nail and I am sure there will be others who will join hands. We will initiate a dialogue across the country so that people would understand what is happening and have a united front to resist the BJP’s inroads into the crucial state subjects, which are the domains of the state government.

WATCH: The full interview with Thomas Issac

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