The Union Territory of Jammu and Kashmir has one of the highest numbers of unaudited functional cooperative societies in the country, with 5,138 societies yet to undergo an audit, according to data placed before the Lok Sabha on Tuesday.
In a written reply to a question raised by Rajesh Ranjan in the Lok Sabha, the Ministry of Cooperation informed the House that, out of 9,132 functional cooperative societies in Jammu and Kashmir, only 3,994 have been audited, leaving 5,138 societies—more than 56 per cent—unaudited.
The data assumes significance amid concerns over financial irregularities, weak management and the lack of timely audits in cooperative institutions, which play an important role in providing credit, agricultural services and other forms of economic support to their members.
According to the Ministry, there are 8.53 lakh cooperative societies registered across the country, of which 6.63 lakh are functional, 1.41 lakh are non-functional and 49,177 are under liquidation. Of the functional societies, 5.95 lakh have been audited, while 68,020 remain unaudited.
Jammu and Kashmir accounts for the largest number of unaudited functional cooperative societies among the states and union territories listed in the government data. The gap between the number of functional societies and those audited is particularly wide in the Union Territory, with only about 44 per cent of its functional cooperative societies having undergone an audit.
The audit position in J&K also compares unfavourably with those of several other states and union territories. Maharashtra, which has the country's largest number of functional cooperative societies at 219,775, has 211,329 audited societies, leaving 8,446 unaudited. In Uttar Pradesh, 7,360 of 22,888 functional societies remain unaudited, while West Bengal has 6,051 unaudited societies out of 23,028 functional cooperatives.
The ministry said details of cooperative societies lying dormant due to financial irregularities, weak management and a lack of timely audits are maintained by the respective state and union territory governments.
The government also clarified that cooperative societies registered under the Multi-State Cooperative Societies (MSCS) Act, 2002, function as autonomous organisations and remain accountable to their members. In cases involving irregularities, including financial embezzlement, winding-up proceedings can be initiated under Section 86 of the Act, followed by the appointment of a liquidator under Section 89 to liquidate the society's assets and facilitate payments to investors and members under Section 90.
So far, 115 multi-state cooperative societies have been placed under liquidation, the Ministry said.
The government lists reforms to improve accountability
The Ministry of Cooperation, established in July 2021, said it has undertaken several measures under the vision of "Sahakar se Samriddhi" to strengthen transparency, accountability and the protection of members' interests.
These include the 2023 amendment to the Multi-State Cooperative Societies Act, aimed at strengthening governance, improving transparency and accountability, and reforming the electoral process.
The government has also established a Cooperative Rehabilitation, Reconstruction and Development Fund to revive sick multi-state cooperative societies and provide financial assistance for infrastructure requirements.
For Primary Agricultural Credit Societies (PACS), the government has circulated model bye-laws to facilitate diversification into activities such as storage, processing, LPG distribution and Common Service Centres. The computerisation of PACS through common ERP-based national software is also aimed at improving transparency, record management, efficiency and service delivery.
The Ministry further said that capacity-building and skill-development programmes are being conducted through the National Council for Cooperative Training, which operates a network of 20 training institutes.
The National Cooperative Database (NCD) has also been developed as a digital repository containing details of 8.53 lakh cooperative societies and approximately 32 crore members. Rural cooperative banks have additionally been brought under the RBI Integrated Ombudsman Scheme to strengthen transparency and accountability.
