The leading voices of the cooperative banking sector have appreciated the provisions announced by Finance Minister Nirmala Sitharaman in Union Budget 2023-24.
Jyotindra Mehta, President, NAFCUB: The Budget is all set to trigger a big jump in the economy including the cooperative sector. The Budget is growth-oriented and due importance is given to the cooperative sector. Income tax-related litigation was a problem facing sugar cooperatives but the FM and Union Cooperation Minister Amit Shah have found a way out. Now sugar cooperatives will have more savings on tax liability. Under sec 269SS and 269T transaction in cash to the society was Rs 20,000, and the new limit is Rs 2 lakhs. We demand extending the higher limit provision under Section 269SS and 268T for urban credit cooperatives as well. To encourage new cooperatives in manufacturing activities the FM has given relief. This will encourage cooperative startups. The provisions of tax deduction at source were detrimental to the business of PACS and PACARD. The TDS limit of the eligibility is now increased to Rs 3 crore, a great relief for non-filer income taxpayers. In the background of aftershocks of Covid and the Ukraine war and the effect of crude markets on the world economy, the budget will help India realize its dreams. No area is left untouched including reaching out to youth and growth in the financial sector. The budget is designed to lead India to become the world’s biggest economic power.
Pramod Karnad, Chairman, BoM, Sharad Sahakari Bank, and former Managing Director, MSC Bank: Best announcement by FM in the Budget is doing away with income tax dues prior to 2016 for cooperative sugar factories. She also announced a higher limit of Rs 2 Lakh per member for cash deposits and loans in PACS. Indeed, Amit Shah, Cooperation Minister, has been strong enough to recommend this to her and get it implemented. At least 75 cooperative sugar mills in Maharashtra will benefit from income tax relief parting away prior to 2016 as they had paid more cane price than FRP and got punished! Indeed, a good decision. This move has resulted in the cancellation of income tax dues of over Rs10,000 crore from cooperative sugar mills pan India. Amit Shah wants 63,000 PACS fully on the digital platform, working as multi-purpose PACS. Incidentally, I was on the state-level committee for recommending model bye-laws for PACS under the multi-purpose outfit. The FM has provided Rs 2,516 crores for digitization of PACS as sought by the cooperative minister.
Kiran Karnad, CEO, Karnad’s Banking Research & Development Foundation, and senior banking expert: The Union Budget for the year 2023/24 is very inspiring for the common people, farmers, middle-class people as well as for micro, small and medium enterprises. Finance Minister Nirmala
Sitharaman has given a good amount of relief to almost all sections of society in small and large forms. With the concept of ‘Prosperity through Cooperatives’, a concessional rate of 15% tax has been introduced in this budget if people want to set up new cooperatives. Apart from this, the central government will give financial support in the next five years for setting up multi-cooperative societies, primary agriculture cooperative societies, dairy and fisheries societies in the country. As a national policy of cooperatives, the aim of this Budget is to give a total of Rs 20 lakh crore loans to 8.06 lakh cooperative societies in the country. This loan will be given mainly for animal husbandry, dairy and fish businesses. These cooperative societies will now be able to withdraw more than Rs 3 crore cash from banks without deducting TDS for their various activities.
The central government is now going to provide guarantee for the loans (credit guarantee), availed by MSMEs from banks. For this and to make this MSME industry more prosperous, the Union Finance Minister has made a provision of 9,000 crores in this budget. In addition, a total of Rs 2 Lakh crores more will be given to MSME industry from April 2023. To lighten the burden of loan interest on these MSMEs, the interest rate will be reduced by another 1%. Many more concessions will be given by making changes in the Banking Regulation Act, Banking Companies Act and RBI Act. In order to increase financial inclusion, National Financial Information Registry will be established. The Jan Dhan Yojana has reached 47.8 crore people so far and its scope has been further expanded. Keeping in mind the difficulty faced by customers in KYC, it will be made easier. The amount of special savings scheme for senior citizens has now been increased from Rs 15 lakhs to 30 lakhs.
