Former prime minister Dr Babu Ram Bhattarai – going against his own party line – today said that there is no need to recognise cooperatives as the third pillar of the economy, and it is a part of private sector.

The country has – according to the Interim Constitution – accepted a three-pillar – government, private sector and cooperatives – economy. But internationally, cooperatives is not a separate pillar of the economy rather one of the components of the private sector.In Co

Since cooperatives is a part of the private sector, it should not be considered a separate pillar of the economy,” Bhattarai, who is chairman of the Constitutional-Political Dialogue and Consensus-building Committee of the Constituent Assembly, said, here today.

“The only difference between cooperatives and other institutions in the private sector is that cooperatives has collective management,” he said, adding that cooperatives were needed to promote small farmers and producers, who form a large number. “The cooperative sector has earned a bad name due to undesirable activities of a few institutions calling themselves cooperatives.”

Cooperatives are necessary for equitable and inclusive development of the country, but we need better regulations and stronger regulatory bodies,” he said, sharing his ideas with the economic journalists.

Due to political patronage of communist parties including CPN-UML – one of the ruling alliance – and UCPN-Maoist, cooperatives recognised as the third pillar of the economy have been engaged in anti-cooperatives norms.

Likewise, Bhattarai also insisted that the country should adopt industrial capitalism to enhance the capacity of individuals before heading towards socialism.

Though Bhattarai said private investment is necessary for transformation of economy, he said that the ultimate goal should be socialism. “But socialism will sustain only, if the country is prosperous.”

Classical capitalism has failed to address poverty and unemployment,” he said, adding that country cannot be competitive without advance technology, foreign capital and industrial development. “We should promote capitalism in expanding production base for industrial development.”

Likewise, he also informed that most of the disputed issues of the new constitution has been sorted out. “But number of federal states is yet to be finalised, he said, adding that federal states would, however, be carved out on the basis of identity and capability. “The political parties have come to consensus on five componenet of identity and four pillars of capability, while craving federal states.”

Similarly, we should also look at the potential resources of a particular state and not only at its current capability, Bhattarai added.

He also said there was general consensus among political parties on giving authority to the central government to collect taxes, like customs duties and value added tax.

Acknowledging that every federal state should be economically viable, he said, that they should not have to rely too much on central government grants. ” A fiscal commission will be formed to prepare the criteria for resource distribution.”

Hoping that his committee would be able to submit a report on settlement of contentious issues within the deadline of September 6, he said that political parties have always sealed deal at the last minute.

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