Tuesday, May 30, 2023

PM Modi’s cabinet reshuffle: What are the reasons for creating a new ministry?


The Narendra Modi government has set up a ministry of cooperation and handed over its reins to the powerful home minister Amit Shah. The recent history of India’s ministry formations tells us two things. Creation or, for that matter, even dismantling of a ministry is always a political call. For the government of the day, it is primarily meant to carry a political message, to reach out to specific sections of the electorate. Administrative needs do play a role, but that comes secondary.

This is not the first time that the Centre has fiddled with cooperation. It has been part of several central ministries. Between 1974 and 1979, it was in the periphery of the ministry of industries and civil supplies; then it returned to the mainstream in 1979, as part of the department of agriculture and cooperation. Even though cooperation has now been hived off, the domain name of the ministry of agriculture and farmers welfare continues to be agricoop.nic.in, “coop” being the short form for “cooperation”.

Even in the 1950s, in a newly democratic India, when Jawaharlal Nehru was prime minister, cooperation was one of the functions of the then combined ministry of food and agriculture, the other subjects being agricultural production, marketing, research, agricultural economics, minor irrigation, animal husbandry, fertiliser, land reclamation, et al.

While announcing the creation of the new ministry of cooperation on July 6, fulfilling a commitment made by Finance Minister Nirmala Sitharaman during her budget speech in February, the government said the move was to realise a vision of “Sahkar se Samriddhi”, meaning prosperity through cooperation, adding that the ministry would provide a separate administrative, legal and policy framework to strengthen India’s cooperative movement. The Centre will have a mandate to focus on multi-state cooperatives; presently there are some 1,300 such entities, headquartered mainly in Maharashtra, Uttar Pradesh, New Delhi and Tamil Nadu.


M Ramachandran, former urban development secretary, agrees that the creation and naming of a ministry is invariably political signalling. “When the Congress-led UPA came to power in 2004, panchayati raj was made a full-fledged ministry. Mani Shankar Aiyar (who had worked closely with former PM Rajiv Gandhi) was made its cabinet minister.

It was more political messaging,” he says, adding that such signals get lost if the government fails to back up the ministry with an action plan and sufficient money. Here’s an instance of how nomenclatures and ministries evolve with political exigencies. In Nehru’s time — his first cabinet had only 14 ministers — urban development was part of a large portfolio called the ministry of works, housing and supply. It got its new name only in 1985. A decade later, the then PM PV Narasimha Rao found it politically appealing to add employment to the name of the ministry.

Thus the ministry of urban affairs and employment was formed. The Bharatiya Janata Party’s first PM, Atal Bihari Vajpayee, who rose to power on the back of urban votes, was keen to send a message that he was concerned about urban poverty. In 1999, the ministry was bifurcated, with the creation of a full-fledged entity called the ministry of urban employment and poverty alleviation.

Vajpayee also created other ministries — like tourism in 1999, catering to the interest of small traders in urban pockets, his key voters; tribal affairs (1999); and the development of north eastern region (2003), mainly to expand his party’s reach. During the UPA rule (2004-14), the creation of some of the new ministries — panchayati raj (2004), minority affairs (2006) and micro, small and medium enterprises (2007) — had a clear pattern; it wanted to send out a political message to its voter base — rural Indians, minorities and small entrepreneurs.

When Modi came to power in 2014, the first brand-new ministry that he created was skill development and entrepreneurship, which he then positioned as an answer to India’s growing unemployment. “Generally, the decision to create a new ministry is taken in the Prime Minister’s Office, where ministers’ portfolios are allocated. In that sense, the political aspect is stronger. However, a suggestion can also emanate from the administration if a need is strongly felt,” says former cabinet secretary KM Chandrasekhar. He adds that the ministry of cooperation is a good idea unless the central government attempts to establish its sway over state institutions, a scenario that will likely disrupt the nation’s federal structure.

Former Union agriculture secretary SK Pattanayak does not foresee such a situation. He says cooperatives can play a stellar role if the Centre succeeds in strengthening the existing regulatory framework, reiterating that multi-state cooperatives do come under its jurisdiction. “The Centre can step in by announcing certain schemes to incentivise the cooperatives. Even today, some cooperatives, for instance NAFED, are profitable because the government procures items through them,” he says.

NAFED, or the National Agricultural Cooperative Marketing Federation of India, an umbrella organisation of about 850 marketing societies and federations across the nation, primarily helps its farmers by procuring their produce such as food grains, pulses, cotton, fruits and vegetables, and helping the organisation make enough profit to pay an annual dividend of 20% or more to its shareholders. “If you deposit your money in a bank, you receive some 4% yearly returns.

In NAFED, we give about 20%,” says its chairman Bijendra Singh, a former Congress MLA in Delhi assembly. “I am still with the Congress. But as far as cooperatives are concerned we don’t indulge in party politics,” says Singh who was one of the select delegates to meet Shah at his residence on July 10, to discuss the problems and prospects of cooperatives in India.

Some other big names connected with the cooperative movement, for instance, are from non-BJP parties. The chairman of the Krishak Bharati Cooperative (KRIBHCO), Chandrapal Singh Yadav, is from the Samajwadi Party, while the chairman of the Indian Farmers Fertiliser Cooperative (IFFCO), Balvinder Singh Nakai, is affiliated to the Akali Dal. Just to give a sense of the size and scale of these cooperatives — the paid-up capital of KRIBHCO is made up of contributions from 9,478 cooperative societies across India, and IFFCO, one of the largest cooperatives in India, has a network of about 36,000 cooperative societies involving 5.5 crore farmers.

Sample this, too: among the cooperative societies registered under the Multi State Cooperative Societies Act, 2002, as many as 567, or 43% of the total, are headquartered in Maharashtra, many of which are controlled by leaders affiliated to the Nationalist Congress Party (NCP) or the Congress. These societies are mostly in sectors such as credit, agriculture, housing, dairy and banking. Karnataka, Gujarat and Tamil Nadu are some other states that have leapfrogged in cooperative movement.

Against this backdrop, and also considering that the impasse over the three agricultural laws passed by Parliament in 2020 has not been resolved as yet, the Sahkar se Samriddhi blueprint does have political undertones. After all, cooperatives are one of the last big political frontiers the ruling party has failed to make inroads into.

No advantage in having fewer ministries: KM Chandrasekhar
Former Cabinet Secretary KM Chandrasekhar speaks about the rationale behind creating new ministries. Excerpts from an email interview with:

How much of the decision of creating a new ministry is political in nature?
Generally, such a decision is taken in the Prime Minister’s Office, where ministers’ portfolios are allocated. In that sense, the political aspect is stronger. However, a suggestion can also emanate from the administration if a need is strongly felt.

What’s your take on the newly formed ministry of cooperation?
Cooperation, in its true sense, will best achieve its objectives if there is strong upward integration. For example, if firm linkages are established between primary cooperative marketing societies, state cooperative marketing federations and NAFED (National Agricultural Cooperative Marketing Federation) at the national level, farmers may stand to gain. There are several such cooperatives at the national level and if the intention is to strengthen them and enable them to service lowerlevel organisations at the state level more effectively, then that will be a good move. However, if the intention is for the central government to establish control over state institutions, this would be a retrograde, anti-federal step and will lead to much conflict.

Does India need fewer or more ministries?
This is a big country with a huge population. Administrative problems are defined more by size of the population; more people would mean more problems to solve. I do not see any specific advantage in having fewer ministries or departments in a heavily populated country. If there is overload on any minister, it will obviously affect her performance.

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