Indian Constitution Needs Change

 

Constitution of India-Needs Change

B. Yerram Raju

26^th November happens to gain importance because it has been declared as National Constituent Assembly Day. Ambedkar committee handed over the Constitution of India to be applied to Indian Union from January 26, 1947. This is also perhaps the day when it has to be re-written.

       PM Modi repeatedly mentions ‘Atma Nirbhar Bharat’(Self-reliant India) and ‘Viksit Bharat’(Developed India) and most of the Indian citizens swear by it by 2047. SBI Latest research report puts the growth rate of India at 7.5%. While the RBI’s monitory policy, September 2025 puts it at 7%, the fastest in the world. PM Modi re-emphasized in the latest G-20 summit in South Africa that governance and technology are the two issues that would shape the rest of the world. But will it be possible with a constitution of India that has 106 amendments and 75years of survival. It is time to walk the talk.

              Perhaps we end up with a negative answer. India needs a new constitution but with its preamble of Ambedkar intact.

     New constitution should have the following tenets:

1. Every MLC & MLA and every MP of both Lok Sabha and Rajya Sabha need to be defined. The Election Commission of India(EC) should not grant ticket to any person who is in jail for whatever period in the name of ‘Freedom’.
2. Article 11 and 12 of the existing constitution should be re-written defining a ‘Public citizen’.
3. All the amendments (106) should be in a separate schedule.
4. A high level committee of twelve or fourteen  members should be constituted with the PM chairing it. Three members each should be drawn from the current independent arms of the Constitution: Legislature, Executive and Judiciary( they can be retired). There should be at least two private citizens of eminence. This committee (High level committee )should have 9 months’ time.
5. The draft New Constitution must be circulated for comments by every citizen within a month’s time.
6. The new draft must preserve and protect all the good tenets of Democracy , Legislature, Executive and Judiciary.
7. Judiciary reforms beg no delay. The law should be uniform across all courts.
8. Each law should be subject to ‘Regulatory Impact Assessment’ and the concerned Union Minister should table it in the first session of the Parliament.
9. During the past ten years several archaic British laws are amended/altered. Negotiable Instruments Act, 1883 should also be amended.
10. The following should have independent status away from the Parliament.

(i)                      RBI & Monetary Policy Committee.

(ii)                    Election Commission of India.

(iii)                 Controller and Auditor General.

(iv)                 Finance Commission.

11. The parties concerned must announce the budget for bonanzes for five years ahead of the polls.

Policies:

Policies should be subject to the New Constitution.

1. Industrial Policy
2. Manufacturing Policy
3. Irrigation Policy
4. Water Policy
5. Agricultural Policy
6. Employment Policy
7.  Education and Health Policies
8. Competition Policy and
9. Technology Policy
10. Energy Policy.

The concerned Union Minister must table it in the Parliament.

Kubinder Singh Sathe’s article in ‘Money Life’ of 24, Nov 2025 should be taken into account consideration while writing the New Constitution.

 

Conclusion: The New Constitution should be supreme and federal in character. The ‘Centrality’ defines dictatorship and should be avoided. 75 years, various supreme court Judgements , and 106 amendments are enough reasons for the draft New Constitution.

 

 

 

 

 

Future Agenda for Cooperatives

FUTURE CO-OPERATIVE AGENDA

B. Yerram Raju*

 

The Home Minister and Union Minister for Cooperation, Amit Shah held a meeting of state ministers to reformulate and revise the National Co-operative Policy, 2022 in the aftermath of the resistance of the states to the  97^th Constitutional Amendment 2012 and the consequential changed milieu in the Co-operative movement of the Country.

 

The widely spread Co-operatives from brooms to looms; from fertilizer to food; from production to consumption; from milk to silk and from labour to power have their roots lie in the setting up of Primary Agricultural Co-operative Credit Societies (PACS) in 1904. Entire cooperative legislation has been catering more to the credit cooperative structure al bait several imbalances and irregularities and faulty accounting practices. Urban Cooperative Banks (UCBs), like the community banks in the US, has been serving the limited requirements of the interested cooperators and have become symbols of mismanagement and poor governance, requiring continual intervention and regulatory architecture from the RBI to protect the interests of the depositors who invested in those banks.

‘Cooperatives are operatives in misappropriation’, bemoaned some famous cooperators like L.C. Jain and eminent bankers like Burra Venkatappapaiah, in the yesteryears. After the Third Five-Year Plan, the Five-Year Plan (FYP) documents removed the chapter on Cooperation. After NABARD assumed charge of supervision of the rural cooperative credit structure, their size and contribution to agriculture and rural development significantly declined giving more space to the less-interested commercial banks. There has been a strategy retreat from ‘Farmers’ Service Societies’ (multi-purpose cooperatives) financed earlier by the commercial banks

Context, Rationale, and the problems

The lofty ideal of Gram Swaraj embedded in Panchayats and Cooperatives came to occupy secondary status despite the 73rd and 74th Amendments to the Constitution of India, mired in confusing objectives and corrupt practices. Cooperatives originally started with the laudable socio-economic goal of helping the unreached and as effective instruments of financial inclusion, are today under the seizure of the political elite and became in fact the seedbeds of political power. The elected representatives like the Presidents, Vice Presidents, and Board of Directors appointed secretaries would do the things they want and not what the members legitimately expected of them.

Cooperative Federalism demands that the states have to be taken on board over any new policy changes as the subject of cooperation falls in the domain of the states and not the union government.

Martin Luther King Jr, once stated, “Almost always, it is the creative dedicated minority that has made the world better.” The largest food brand in India – AMUL proved that cooperatives are the best bet for survival. “If you want to be incrementally better, be competitive. If you want to be exponentially better, be cooperative,” a Canadian Lesson Book on Cooperatives quoted.

Recommendation:

            The Government should reformulate its Future Co-operative Agenda to professionalize and democratize the Co-operatives and also to facilitate the development of the Co-operatives as Self-reliant and economically sustainable organizations in order to provide an environment for the members to have improved access, economies of scale, insuring them against unforeseen risks, safeguarding them against market imperfections and bestowing the advantages of Co-operative Collective Action, based on International Co-operative Principles.

Policy on Future Co-operative Agenda:

 

Definition of cooperatives should avoid their classification that gives a long arm to the regulator.

 

* While upholding the values and principles of Cooperation, the Policy recognizes the Cooperatives as an autonomous association of persons, united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.

 

This Policy addresses the hitherto unaddressed or neglected issues of management, governance, audit, and member-run democratic structure of the cooperatives in the country through legal, accounting, technological and structural changes and therefore would prove its supremacy over other economic instruments in the interest of inclusive growth, a goal not to be missed by any democratic government.

 

Registrar of Cooperatives – role shall not be so much of intervention as registration, maintaining membership data and arbitration over the issues that arise among the co-operators and cooperatives.

 

Key Risk Areas:

1. The political will to implement such policy throughout the length and breadth of the country.
2. Speed of action
3. Resources for implementing change – Budgetary provisions; Endorsement of Niti Aayog – the think tank of the present government and
4. Approvals from RBI and SEBI, where required.

 

Strategies To Achieve The Objectives:

          Technology offers a level playing field and therefore, there must be a plan for technology infusion. Co-operatives being financially weak enterprises owing to their excessive obligations enjoined upon by the state governments, funds for technology management should come from the State Government as a one-time grant/support with conformance to certain discipline by the leadership in Co-operatives from the primary to the apex levels in all the spheres.

          The Investment in technology can come as a grant or soft loan assistance from either the government or an international organization. Co-operatives that have adequate collaterals to offer can be enabled to do so with the approval of their respective General Body. The tenor of assistance can be mutually agreed upon between the giver and taker.

Monitoring and Implementation

There shall be a Policy Review Committee, meeting at half-yearly intervals, at the State and Union Government levels with the concerned Secretary-in-charge to chair the deliberations at quarterly intervals. The concerned Minister shall present to the Parliament’s first session of the year, a review of the efficacy of the delivery instruments under the Cooperative Act.

 

Conclusion

The vision for the twenty-first century should withstand the challenges of a competitive business environment where excellence, efficiency, and high productivity parameters will be the priority. Emphasis will continue to be laid on an improvement with co-operative governance through the process of restructuring and rejuvenation.

  

Ten point Policy for MSMEs

Sweet nothings for MSMEs

Risk aversion can’t be turned into risk appetite with excess liquidity in the hands of hesitant lenders

MSMEs, the lifeline of the economy and the main job-provider, has no oxygen left. The Micro, Small and Medium Enterprises (MSMEs) have been the worst affected by the pandemic but only sweet nothings have been coming as announcements for the sector. The RBI offered a deceptive comfort: standard assets as on March 1, 2020, would get a relief of three-month moratorium with no interest relief; review of the working capital requirements and pumping in liquidity of the order of 3.37% of GDP combined with the GoI relief for the weaker sections by way of cash remittances into the Jan Dhan accounts.

There was further relief by way of refinance from Sidbi: Rs 50,000 crore; Nabard: Rs 25,000 crore among others. The net result of previous liquidity injection as per the RBI April 2020 Bulletin is 0.7% year-on-year credit growth for the industry. Sectorwise: manufacturing micro and small enterprises was -0.4%; food processing: -3.1%; textiles: -6.6%; leather and leather products: -2.3%, all engineering: -0.4, state-sponsored SC/ST credit: -70.4%; export credit: -13.2%. Will all these negatives turn positive with the new liquidity? Risk aversion cannot be turned into risk appetite with excess liquidity in the hands of a hesitant lender.

In a pandemic, history tells us that massive credit and large fiscal expansion should go in sync to pump-prime the economy to a new normal.

Realistic View

When the manufacturing MSMEs open their shutters, they will find all the machinery waiting to be greased; sheds to be broomed; factory premises to be sanitised, and all tools readied. Several bills pending for payment require renegotiation. Labour will mainly demand their lost wages rather than renewing their work.

All supply chains are choked and each link in the chain needs to be looked at by the size of investment needed for re-functioning to the level of at least 60% capacity, Without this, interest commitments may not be honoured. The entrepreneur will, therefore, have to set his priorities right and decide which corners need to be cut and which widened.

The immediate trigger for enterprises in Telangana is deferment of fixed electricity charges for April and May without penalty and they will get 1% rebate on payment.

Several enterprises would first search for cash from banks and NBFCs. This would depend on the collateral securities they had and their previous track record. Banks are not poised as of now to lend on a cash flow basis. They may still try to work out estimates based on the pre-Covid-19 performance levels. This is the first tragedy. There may be a few understanding branch managers, who will take the risk and lend.

Next thing, the entrepreneur needs to negotiate with the existing labour. It will be a very hard negotiation and he will need to find money to pay the wages for the shutdown period first. Some understanding labour may oblige with deferred wages but they would be just a few. Most fair-weather friends would come up with suggestions like pledging gold; mortgaging excess property, etc but no cash. Private moneylenders too would be hard to come by.

The demands of all national associations like the CII, FCCI, PHDCCI have been kept waiting at the doors of the Finance Ministry. The UK Sinha Committee Report that recommended Rs 10,000 crore fund of funds and Rs 5,000 crore Distressed Asset Fund have not been set up. After set up, if they are kept in the conservative hands of Sidbi, it will be of no use. The Fund should address payment of wages of all the manufacturing MSMEs based on the muster roll and ESI evidence.

Assessing Demand

It is unlikely that products would be in demand at the same level. People have become austere. Every person, who faced a compensation cut, would continue to move the demand curve to essentials than FMCG. Sectors like pharmaceuticals, medical equipment, processed foods, packaging that were functioning on the fringe could move to higher capacities. All others will have to make rounds to the banks for their merciful looks!

Every enterprise will have to envision a new future – different scenarios have to be built and they should convince investors and lenders. They cannot look to the global markets immediately as the pandemic has levelled them all.

As far as India is concerned, a great opportunity is knocking. China has lost its sheen and credibility. Global markets hitherto linked to China would be looking at ways to pull off from them. Entrepreneurs should carefully set their trigger points. It is here that the policy vacuum can hurt hard.

Ten-Point Policy

1. Redefine MSMEs by way of turnover
2. Allocate specific portfolio for manufacturing sector to make ‘Made in India’ a reality
3. Enterprise should digitise operations and have a consent-based ERP architecture
4. Bundle up all existing credit (term loan plus working capital, inclusive of interest) for enterprises with a turnover of Rs 10 crore – extend a moratorium till December 31, 2020, after converting it into a Fixed Interest Term Loan carrying interest at 6% pa, for repayment thereafter in 48 annual instalments
5. Evaluate working capital requirements on cash flow basis
6. Discount all the bills drawn on government departments, PSUs and even large undertakings that carry credit rating of AAA and above at 75% and credit into the client account, provided the invoice clearly says that the purchase is within the approved annual budget.
7. Credit Guarantee Fund Trust for Micro and Small Enterprises should do portfolio guarantee up to Rs 5 crore and then second charge on the collateral security with the lender for the balance up to Rs 10 crore
8. Declare NPA threshold at 180 days overdue and redefine the Special Mention Accounts — 0,1,2 at 60, 90, 180 days
9. Review all existing limits, legal proceedings, auctions etc, and ensure that no viable enterprise will exit
10. For the rest of the enterprises, make exit comfortable: fair treatment of sovereign dues; priority to the creditors on first-in-first out; and transfer of assets to those who would like to acquire them. These accounts should be subject to a third party review by a State government accredited agency.

Thereafter, the industry should draw up their trigger points and rational action plan in consultation with the lender/investor. All Industry Associations should nominate one or two active Executive Committee Members to form a think-tank or negotiating team for regular interface with both State and Union governments.

(The writer has authored ‘The Story of Indian MSMEs’)

https://telanganatoday.com/sweet-nothings-for-msmes