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Strengthening of MSCS Act

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Strengthening of MSCS Act

(a) The Multi-State Cooperative Societies (MSCS) (Amendment) Act & Rules, 2023 have been notified on 03.08.2023 and 04.08.2023, respectively to strengthen governance, enhance transparency, increase accountability and reform electoral process, etc. in the Multi State Cooperative Societies by supplementing existing legislation and incorporating the provisions of Ninety-seventh Constitutional Amendment.

 

Many provisions have been introduced via the above amendment to strengthen regulatory oversight and monitoring in the functioning of cooperative societies and prevent financial irregularities therein, inter-alia: –

 

 

(b)  The following provisions have specifically been introduced for strengthening the audit process of Multi-State Cooperative Societies:

 

 

 

A provision has also been introduced for determination of accounting and auditing standards for multi-State cooperative societies by Central Government. Further, it has been provided that every multi-State cooperative society shall file its annual returns with the Central Registrar through the online CRCS portal under section 120A of the Act, within six months from the close of the accounting year, containing the following information prescribed under section 120 of the Act:

 

 

Non-submission of such returns may constitute a ground for disqualification under the provisions of section 43 of the Act.

 

(c)  A comprehensive National Cooperative Database (NCD) has been developed by Ministry of Cooperation, Government of India, with the support of States / UTs. The NCD portal was launched on 08th March, 2024. This database provides a single-point access to information on over 8.4 lakh cooperatives across the country.  As per NCD portal, as of 20.01.2026, out of total 8.48 lakh Cooperative Societies across the country, 6.58 lakh are functional, 1.41 lakh are non-functional and 49,179 are under liquidation.

The Ministry of Cooperation has taken proactive measures to convert Primary Agricultural Credit Societies (PACS), Dairy, and Fisheries Cooperatives into multi-purpose cooperative societies. This initiative aims to enhance business diversification, strengthen financial sustainability, and prevent closures by enabling cooperatives to engage in a wider range of economic activities. The NCD is used for identification of gaps in the geographical spread of cooperatives, including both covered and uncovered gram panchayats and formation of 2 lakh new multipurpose PACS, Dairy and Fishery cooperative societies.

 

Additionally, the Ministry of Cooperation has set up Co-operative Rehabilitation, Reconstruction and Development Fund under section 63A of the Multi-State Cooperative Societies (MSCS) (Amendment) Act, 2023 for revival of sick multi-State cooperative societies and providing assistance for meeting infrastructural requirement.

 

(d) The State-wise details of functional, non-functional and under liquidation societies, is attached at Annexure-I.

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Annexure-I
State-wise details of functional, non-functional and under liquidation societies

S. No.

State/ UT Name

Functional

Societies

Non-functional societies

Under liquidation

Societies

1

ANDAMAN AND NICOBAR ISLANDS

1,208

884

147

2

ANDHRA PRADESH

12,457

5,457

269

3

ARUNACHAL PRADESH

960

477

24

4

ASSAM

7,637

3,569

1,221

5

BIHAR

22,344

4,881

162

6

CHANDIGARH

196

221

59

7

CHHATTISGARH

10,245

1,027

573

8

DELHI

1,939

3,989

16

9

GOA

3,142

2,341

110

10

GUJARAT

79,018

6,217

1,284

11

HARYANA

15,260

2,987

16,426

12

HIMACHAL PRADESH

4,984

541

266

13

JAMMU AND KASHMIR

8,992

1,623

5

14

JHARKHAND

8,007

3,897

187

15

KARNATAKA

40,345

3,477

3,147

16

KERALA

15,130

3,752

770

17

LADAKH

165

110

–

18

LAKSHADWEEP

31

12

–

19

MADHYA PRADESH

26,607

18,512

8,846

20

MAHARASHTRA

2,18,633

3,289

4,064

21

MANIPUR

5,335

6,007

285

22

MEGHALAYA

2,958

470

24

23

MIZORAM

1,272

196

92

24

NAGALAND

2,194

5,737

24

25

ODISHA

7,754

500

108

26

PUDUCHERRY

401

62

1

27

PUNJAB

11,888

2,670

5,104

28

RAJASTHAN

25,545

13,362

3,062

29

SIKKIM

1,601

1,916

251

30

TAMIL NADU

21,232

1,201

777

31

TELANGANA

47,531

12,905

422

32

THE DADRA AND NAGAR HAVELI AND DAMAN AND DIU

407

157

33

33

TRIPURA

2,184

984

102

34

UTTAR PRADESH

22,727

17,048

934

35

UTTARAKHAND

4,410

1,826

157

36

WEST BENGAL

22,982

8,933

227

Total

6,57,721

1,41,237

49,179

Source: NCD portal as of 20.01.2026

This information was given by Union Minister for Home and Cooperation Shri Amit Shah in a written reply in Rajya Sabha.

  1. To ensure timely, regular and transparent conduct of elections in the multi-State cooperative societies, provision of Cooperative Election Authority has been made.
  2. Appointment of Co-operative Ombudsman by Central Government to provide a mechanism to address grievances of members.
  3. To improve transparency, appointment of Information Officer by multi-State cooperative societies to provide information to members.
  4. Audit reports of Apex multi-State co-operative societies to be laid in Parliament to improve transparency.
  5. Accounting and auditing standards for multi-State cooperative societies to be determined by Central Government to ensure uniformity in accounting and auditing.
  6. To improve governance and transparency, annual report of multi-State cooperative societies to include Board decisions which are not unanimous.
  7. Central Government to determine prudential norms (liquidity, exposure, etc.) for multi-State co-operative societies in the business of thrift and credit.
  8. To curb nepotism and favouritism in multi-State co-operative societies, the Director of a multi-State cooperative society shall not be present in the discussion and vote on matters where he or his relatives are an interested party. 
  9. Additional grounds for disqualification for directors have been made to improve governance.
  10. Provisions for Investment of funds by the multi-State cooperative societies have been redefined to ensure safer investments and remove references to colonial era securities.
  11. To have more financial discipline and transparency, the board of multi-State co-operative societies to constitute Committee for Audit and Ethics along with other committees.
  12. For strengthening governance, criteria for appointment of Chief Executive Officer (CEO) stipulated.
  13. To enhance democratic decision making in the multi-State cooperative societies, quorum has been prescribed for board meetings.
  14. Central Registrar to conduct inquiry if he gets information that business is being conducted in a fraudulent manner or for unlawful purposes.
  15. If registration obtained by misrepresentation, fraud, etc., provision for winding up of a multi-State cooperative society after giving opportunity of being heard.
  16. To discourage members from acting against collective interests of the multi-State co-operative societies, the minimum period of expulsion of an expelled member of a multi-State co-operative society has been increased from 1 year to 3 years.
  17. To prevent only a few members benefitting from resources of the society, Institutions with majority equity shares held by the members of multi-State co-operative societies or their relatives, would not be considered as subsidiary institution.

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