The government on Tuesday announced Rs 900-crore allocation in the Budget for the newly set up Ministry of Cooperation for the 2022-23 fiscal, besides slashing Alternate Minimum Tax (AMT) on cooperative societies to 15 per cent and surcharge to 7 per cent, which nodal minister Amit Shah hailed saying it will boost the sector.
Of the total allocation for the next fiscal, a significant amount of Rs 350 crore has been provided for digitisation of Primary Agriculture Cooperative Societies (PACs), while Rs 274 crore for an umbrella scheme 'Prosperity through Cooperatives' which would have a number of sub-components with the aim of all-round development of cooperatives in the country.
For the first time, a separate budget of Rs 11 crore has been provided to Vaikunth Mehta National Institute of Cooperative Management (VAMNICON).
About Rs 55 crore has been set aside for education and training.
A new Ministry of Cooperation was formed in July 2021 to strengthen the cooperative movement.
Presenting the Union Budget in the Lok Sabha, Finance Minister Nirmala Sitharaman said, "To provide a level-playing field between cooperative societies and companies, I propose to reduce this rate (AMT) for the cooperative societies also to 15 per cent."
Currently, the cooperative societies are required to pay AMT at the rate of 18.5 per cent, while the companies paid at the rate of 15 per cent, she added.
The finance minister also proposed to reduce the surcharge on co-operative societies from present 12 per cent to 7 per cent for those having total income of more than Rs 1 crore and up to Rs 10 crore.
"This would help in enhancing the income of cooperative societies and its members who are mostly from rural and farming communities," she added.
However, the surcharge at the rate of 12 per cent will continue to be levied in case of a co-operative society having a total income exceeding Rs 10 crore.
"On satisfaction of certain conditions, a co-operative society resident in India has the option to pay tax at 22 per cent as per the provisions of section 115BAD of the Income Tax Act. Surcharge would be at 10 per cent on such tax," the budget document said.
Welcoming the Budget announcements, Cooperation Minister Shah tweeted: "Today @narendramodi ji has reduced the AMT rate in the cooperative sector from 18.5 per cent to 15 per vent and surcharge from 12 per cent to 7 per cent, ending the injustice done to the cooperative sector for decades and bringing it at par with the rest of the sectors."
This move proves the government's resolve towards realising the vision of 'Sahkar se Samriddhi' (prosperity through cooperatives), he added.
National Cooperative Union of India (NCUI) president Dileep Sanghani and chief executive Sudhir Mahajan hailed the budget proposals and said in a statement that any shift in policy in favour of cooperatives is welcome.
The National Federation of Urban Cooperative Banks and Credit Societies Ltd. (NAFCUB) President Jyotindra Mehta said the reduction in AMT and surcharge will create more reserves in balance sheet of cooperatives.
Cooperative Bank of India chairman GH Amin said the budget announcements for the sector will lead to economic growth and encourage startups.
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