Tamil Nadu seeks union govt’s support to strengthen cooperative sector

CHENNAI: In a significant development, the Tamil Nadu government on Monday urged the Centre to exempt cooperative societies from Goods and Services Tax (GST), income tax, and Tax Deducted at Source (TDS) deductions.

This move aims to strengthen the cooperative sector in the state, promoting its growth and development.

State Minister for Cooperation, K R Periyakaruppan, met with Union Minister for Home and Cooperation, Amit Shah, in New Delhi and submitted a memorandum outlining key demands.

According to Periyakaruppan, the representation emphasised the need for a slew of measures to promote the growth and development of cooperatives in Tamil Nadu.

Periyakaruppan urged Shah to issue directions to the National Bank for Agriculture and Rural Development (NABARD) to increase the concessional refinancing provided to cooperatives in Tamil Nadu.

This increase should be based on the total short-term debt of these institutions, ensuring they have access to sufficient funds to operate effectively.

The state minister also sought exemption from GST for products and services offered by cooperative societies.

Additionally, he requested exemptions from income tax and TDS deductions for cooperative societies in the state.

These exemptions would help reduce the financial burden on cooperatives, enabling them to allocate more resources towards their core activities.

Furthermore, Periyakaruppan urged Shah to direct the National Cooperative Development Corporation (NCDC) to provide loans to cooperative societies in the state at reasonable interest rates.

This would be facilitated through schemes like the Integrated Cooperative Development Programme (ICDP), which aims to promote the development of cooperatives.

The state minister also requested the Centre to include cooperative banks in the list of banks eligible to provide loans to beneficiaries under various Central Government schemes, including Vidya Lakshmi, Surya Khar, and MSME schemes, which provide financial assistance to various sectors.

In addition, Periyakaruppan sought the Centre's approval for a proposal of approximately Rs 124 crore.

This proposal, submitted to the National Cooperative Federation of India, aims to upgrade the infrastructure of 23 cooperative management training institutes in the state.

The state minister also urged the Centre to increase the interest subsidy for banks providing loans under the Kisan Credit Card (KCC) scheme from 1.5 percent to 2 percent.

This increase would help reduce the financial burden on farmers, enabling them to access credit at more affordable rates.

Moreover, Periyakaruppan sought a separate refinancing facility from NABARD, exclusively for KCC-AH loans, to provide an additional source of funding for farmers, helping them to meet their credit requirements.

Finally, the state minister urged the Union Government to issue net banking services licenses to cooperative banks in the state expeditiously to enable these banks to offer online banking services, enhancing the convenience and accessibility of their services.

Senior officials, including J Radhakrishnan and N Subbaiyan, were present during the meeting.