Parliament Question: Financial Irregularities in Cooperative Societies

GOVERNMENT OF INDIA MINISTRY OF COOPERATION LOK SABHA UNSTARRED QUESTION No. 3806 TO BE ANSWERED ON 11th AUGUST, 2026 Financial Irregularities in Cooperative Societies

3806. Shri Rajesh Ranjan:

Will the Minister of COOPERATION (सहकारिता मंत्री) be pleased to state:

(a) whether it is a fact that several cooperative societies in the country are lying dormant or incurring losses due to financial irregularities, weak management and lack of timely audits;

(b) if so, the details of cooperative societies audited during the last three years, State-wise including the number of societies in which irregularities were detected along with the action taken against them; and

(c) the reformative steps taken or proposed to be taken by the Government to ensure transparency, accountability and protection of members' interests in cooperative societies? ANSWER THE MINISTER OF COOPERATION सहकारिता मंत्री (SHRI AMIT SHAH)

(a) & (b) As per the National Cooperative Database (NCD), out of a total 8.53 lakh Cooperative Societies across the country, 6.63 lakh are functional, 1.41 lakh are non-functional and 49,177 are under liquidation. Among 6.63 lakh functional cooperative societies, 5.95 lakh societies are audited and 0.68 lakh societies are not audited. The State-wise details of functional and audited cooperatives societies are attached as Annexure-1. The details of cooperative societies lying dormant due to financial irregularities, weak management and lack of timely audits is maintained by respective State / UTs.

Further, Cooperative Societies registered under the provisions of the Multi-State Cooperative Societies (MSCS) Act, 2002 function as autonomous cooperative organisations and accountable to their members. In case of irregularities including financial embezzlement, winding up proceeding u/s 86 of the MSCS Act, 2002 are initiated against such MSCSs and liquidator is appointed under the provisions of Section 89 of MSCS Act, 2002 to liquidate the assets of Society and to ensure payment to investors/members under the provisions of section 90 of the Act. So far, Page 1 of 4115 Multi-State Cooperative Societies are put under liquidation. The State-wise number of such societies is attached as Annexure-2.

(b) The Ministry of Cooperation, since its inception on 06.07.2021, has undertaken several initiatives to ensure transparency, accountability and protection of members' interests in cooperative societies under the vision of "Sahakar-se-Samriddhi." Key initiatives include:

• The Multi-State Cooperative Societies (MSCS) Act, 2002 was amended in 2023 to strengthen governance, enhance transparency, increase accountability and reform electoral process, etc. in the Multi State Cooperative Societies (MSCS).

• A Cooperative Rehabilitation, Reconstruction and Development Fund was established under section 63A of the Multi-State Cooperative Societies (MSCS) (Amendment) Act, 2023 to revive sick Multi-State Cooperative Societies and provide financial assistance for meeting their infrastructure requirements.

• Circulation of Model Byelaws of PACS, enabling diversification of activities such as storage, processing, LPG distribution, and common service centers, ensuring better governance standards and promoting member-centric operations.

• Strengthening of PACS through Computerization of PACS project by bringing functional PACS onto a common ERP-based national software, thereby improving transparency, efficiency, record management and service delivery.

• Capacity building and skill development programmes through National Council for Co- operative Training (NCCT) for members, Board of Directors, employees of cooperative, state officials and aspiring youth across the country with a network of 20 training institutes.

• Development of the National Cooperative Database (NCD) which serves as a comprehensive digital repository of 8.53 lakh cooperative societies across the country, having approximately 32 crore members.

• Inclusion of Rural Cooperative Banks under the RBI Integrated Ombudsman Scheme to bring greater transparency and accountability. ***** Page 2 of 4Annexure-1 State-wise audit status of functional Cooperative Societies Audit Status S.

State/UT Total Functional Audited Non-Audited No.

Societies Societies Societies Andaman and Nicobar 1,217 1,160 57 1 Islands 2 Andhra Pradesh 12,408 11,970 438 3 Arunachal Pradesh 1,034 542 492 4 Assam 8,071 5,114 2,957 5 Bihar 22,243 19,896 2,347 6 Chandigarh 195 183 12 7 Chhattisgarh 10,380 9,261 1,119 8 Delhi 1,827 1,782 45 9 Goa 3,165 2,506 659 10 Gujarat 79,823 73,340 6,483 11 Haryana 15,447 13,228 2,219 12 Himachal Pradesh 5,055 4,725 330 13 Jammu & Kashmir 9,132 3,994 5,138 14 Jharkhand 8,144 7,220 924 15 Karnataka 40,440 37,732 2,708 16 Kerala 15,106 14,624 482 17 Ladakh 166 158 8 18 Lakshadweep 53 22 31 19 Madhya Pradesh 27,041 25,479 1,562 20 Maharashtra 2,19,775 2,11,329 8,446 21 Manipur 5,330 3,992 1,338 22 Meghalaya 3,100 2,439 661 23 Mizoram 1,274 1,237 37 24 Nagaland 1,943 1,491 452 25 Odisha 8,063 4,864 3,198 26 Puducherry 400 399 1 27 Punjab 12,666 11,715 951 28 Rajasthan 27,172 23,497 3,675 29 Sikkim 1,398 1,012 386 30 Tamil Nadu 21,090 19,384 1,706 31 Telangana 46,672 43,478 3,194 32 DNH & DD 379 170 209 33 Tripura 2,237 1,744 493 34 Uttarakhand 4,450 2,599 1,851 35 Uttar Pradesh 22,888 15,528 7,360 36 West Bengal 23,028 16,977 6,051 Total 6,62,812 5,94,791 68,020

Source: NCD portal as on 15.07.2026 Page 3 of 4Annexure-2 State wise number of MSCS-under liquidation No. of MSCS-under S.No. State / UT liquidation 1 Andhra Pradesh 2 2 Bihar 1 3 Chandigarh 1 4 Delhi 16 5 Goa 1 6 Gujarat 4 7 Jharkhand 1 8 Karnataka 1 9 Maharashtra 23 10 Odisha 12 11 Punjab 1 12 Rajasthan 26 13 Tamil Nadu 3 14 Telangana 2 15 DNH & DD 1 16 Uttar Pradesh 14 17 West Bengal 6 Total 115 Page 4 of 4