Cooperatives Congress pledges to double contribution to GDP in five years

Cooperatives Congress pledges to double contribution to GDP in five years

The cooperatives champions across the country have – today during the lat day of the First National Cooperatives Congress – announced that they will work to double contribution of the cooperatives sector to the gross domestic product (GDP) of the country within next five years. Releasing an 11-point declaration at the closing of three-day congress, they also expressed commitment to help economic empowerment and create an egalitarian society by including more women, youth and other marginalised communities in the cooperatives movement. Though they have promised to form a regulatory institution to help check fraud cooperatives that have been deviated from its core principle, the promise seems hollow. Lately more than Rs 7 billion of general people in under risk due to some cooperatives' fraud. The 11-point declaration vows to take initiatives to incorporate the agenda of cooperatives in the new constitution, form a separate mechanism for the regulation of the cooperatives sector and establish cooperatives as the best business model of enterprises. Addressing the closing ceremony of the congress, Prime Minister Sushil Koirala lauded the contribution of the cooperatives sector to the economic growth of the country. "The cooperatives sector has not only helped the economy grow but also strengthened democracy at the grassroots level,” he said. Central bank governor Dr Yubaraj Khatiwada, international and local cooperatives experts, activists and government officials presented papers in various sessions of the congress. Khatiwada, on the occasion, said that cooperatives needed to be innovative and design new products as per market demand. Presenting a paper he said that cooperatives should be ready to work with difficult geography, subsistence agriculture and socially excluded communities. Most of the more than 29,000 cooperatives in the country are concentrated in urban areas. According to the Department of Cooperatives, more than 5,000 cooperatives are in the Kathmandu valley only. "Some of them consider the sector as a political agenda while others see it as being against a market-led development strategy,” he said, adding that "as a result, cooperatives have failed to create its space in inclusive growth, poverty reduction, trade and development and social protection strategies." Khatiwada also said that a number of cooperatives had gotten into trouble because of well-to-do groups entering the business with the aim of earning undue profits. Blaming the situation on the unregulated business environment, Khatiwada stressed the need to ensure that the movement worked for people suffering from social or geographical exclusion, deprivation and dis-empowerment. Lack of a cooperative act, legislation to better govern savings and credit cooperatives, a poor regulatory framework and unclear role of the Ministry of Cooperatives and Poverty Alleviation are some of the limitations for the development of the sector. According to the central bank, some 15 per cent of Nepali farmers have access to financial services provided by cooperatives compared to just nine per cent with access to banks. "In this context, there is much room for cooperatives to expand their services in agriculture,” said Khatiwada. Likewise, finance secretary Shanta Raj Subedi, said cooperatives needed to gain greater public trust which could help attract donor agencies. "The government has planned to bring cooperatives under the tax net to maintain transparency in their financial transactions," he said, adding that the government has announced it would waive extra charges for cooperatives paying their taxes by the end of the first half of the current fiscal year. According to the Finance Ministry, only 1,337 cooperatives have filed their tax returns. "The government is ready to reduce the current tax rate, if they maintain transparency in the business,” he added Twelve different working papers related to the cooperatives sector were presented in the Congress.
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