Union Budget: Cooperators give mixed response

Cooperative sector has reacted to Union Budget 2018 presented by Union Minister Arun Jaitley in a mixed manner. While most of the leaders rue the fact that the word cooperative was not mentioned even once by Jaitley, they take solace from the fact that emphasis on agriculture would benefit co-op sector one way or the other. Agriculture and Cooperative are twin brothers after all, they argue.

Excerpts:

Dr M L Sukhdeve, Chairman, Maharashtra State Co-op Bank

Thanks to the budget’s emphasis on rural development, State Cooperative Banks, District Central Cooperative Banks and PACCS would get a lot of business from farmers.

The government decision to raise the MSP by 1.5 times for all notified crops in the coming Kharif season would help SSBs, DCCBs and PACCS get business.

Upgrading local agriculture markets, expanding e-NAM network and allocating the Agri-marketing Infrastructure fund of Rs 2,000 crore is a welcome move.

The budget offers a ray of hope for 31 DCCBs in Maharashtra having 40 lakh farmers.

Vidyadhar Anaskar, Chairman, Maha Urban Co-op Bank Federation

The budget announcements on the development of agriculture, health and education could be a game changer. However, their implementation would be a major challenge. If these announcements had been made four years back, we could have already seen remarkable results.

This time too there is not a single reference to cooperative banks in the budget speech which is very disappointing. We have a huge network in rural areas which we could use in executing various schemes announced in the Union Budget if the government so desire.

TDS exemption benefit for senior citizens is good decision but cooperative banks would not benefit because there deposits will not increase.

We have long been urging the government to amend the MSC Act but to no avail.

Sunil Sathe, CEO, TJSB Sahakari Bank

Reaching the unconnected and underprivileged by giving benefits to agriculture, education, health, power and women and setting targets for BachatGat, Mudra and MSMEs will ensure overall development of the country.

Cooperative banks will have a better scope for targeting Mudra Loans and MSMEs. The problems faced by small and medium enterprises (MSME) will ease as the Budget reduces the income tax to 25% for small companies with annual turnovers of up to Rs 250 crore. This will encourage borrowers to start small business and take loans from cooperative banks.

K Joy Thomas, MD, Punjab & Maharashtra Co-op Bank

PMC bank CEO Joy Thomas said the Union budget will impact cooperative banks’ long term capital generation.

Exemption of interest income on deposits by senior citizens from Rs 10, 000 to Rs 50,000 is a commendable move.

TDS will also be not required to be deducted under section 194A. There will be benefits on interest on all fixed deposit schemes and recurring deposit schemes.

Cooperative banks will have a better scope for targeting MSMEs after the generation of Jobs. But we request the government to help cooperative banks with relief as being given to corporates on tax rate.

Chandrashekar Mulky, MD Bharat Co-op Bank  

Overall the budget is very impressive particularly for Agriculture and rural Infrastructure which will boost the Indian Economy as well as the cooperative banking sector.

Union Finance Minister Arun Jaitley has not talked about cooperative banks directly in his speech but has given a platform for Urban Cooperative Banks to strengthen themselves and take benefits from policies announced for rural development.

Income tax benefit announced for senior citizens on TDS will give an opportunity to UCBs to get their money as deposits.

Onil J Almeida, Chairman, Bassein Catholic Co-op Bank

The budget is likely to strengthen urban cooperative banks.

The Narendra Modi government proposes to complete one crore houses by 2019 for those without houses and those living in Kutcha houses. The government has spiked the allocation for PMAY. Our banks covered under the Pradhan Mantri Awas Yojana (PMAY) can avail the benefits under the scheme. However, the government should extend the home loan limit.

In Palghar district of Maharashtra there is scope for Fishery, Animal Husbandry and the government has allocated the infrastructure development fund of Rs 10,000 crore which can help existing customers park their money in our banks.

Visakhapatnam Co-op Bank, Chairman, Raghavendra Rao

Visakhapatnam Cooperative Bank Chairman is not happy with the Union Budget 2018-19 presented by Union Finance Minister Arun Jaitley in Lok Sabha on Thursday.

The government has reduced the corporate tax rate from 30 percent to 25 percent to companies which have turnover up to Rs 250 crore in 2017-18 but not touched up or revised the rates of Income Tax rate paid by cooperative banks.

It is hoped that the government will give some relaxation to the cooperative banking sector but so far all appeals to Mr Jaitley has gone in vain.

Several cooperators including BJP leaders, Sahakar Bharati leaders had met the Union Finance Minister and submitted the proposal for giving some relaxation to cooperative banks in the budget but to no avail.

Sadanad Nayak, CEO, GP Parsik Patil Co-op Bank

There is hardly anything for co-operatives in this budget as has been the case for past ten years. However, co-op banks may get indirect benefits under.

No TDS for Senior Citizens for interest up-to Rs 50000 on bank deposits will help co-operatives to get more deposits from citizens.

Universal Medicare for 50crore people will give more insurance business, third party products.

Rural focus and rural infrastructure may give opportunities for rural deposits and advances.

We had expected some tax concession for co-op banks but we are in for disappointment.

Rahul Modi, MD, Adarsh Credit Co-op Society

Overall, a balanced budget as it gives priority to agriculture infrastructure and healthcare.

For producer co-operative societies the tax rebate comes as a respite and the support to agriculture and farmers would further boost the rural economy of the country and will benefit the co-operative sector.

A.P.Mahesh Bank, Umesh C Asawa, MD & CEO

I praise the Modi Government initiative for the development of agriculture, health and education sectors but it has not announced anything favorable for the cooperative banking sector.

I am disappointed that the budget does not offer any relaxation on Income Tax.

Anand G Bakshi, Chairman, Prime Co-op Bank

A budget should strengthen the economy- this is the bottom-line. It’s high time we set aside our personal likes and demands and see the country flourish. Looking at reactions of people, I feel, some of them are incorrigible pessimists whatever the government does.

Let us not expect change, let us cause it. As long as there are targets to get the fiscal deficit down to around 3%, it is good.

Udai A Shetye, MD&CEO, Zoroastrain Co-op Bank

Nothing for cooperative banks. Rates are bound to go up on both deposits and advances.

Anil Rao, Chairman, Jalgoan Janata Sahakari Bank

I appreciate the initiatives taken to protect and strengthen agriculture, health , education, infrastructure and MSME sectors.

However, I register my protest against a raw deal being meted out to urban cooperative banks.

Expectations regarding reduction in income tax rate and enhancement of rate of deduction under section 36 from 8.5 % to at least 12% of gross total income have not been met in this budget and this is a sad part of the budget.

Er. A Kothale, Chairman, Jijau Comm Co-op Bank

Budget is average not so good for banking as it is not production orientated immediately. Its results would be visible in long term. The provisions for SME loans are scanty considering population. The salaried class is burdened with high tax.

Deendyal Nagari Sahakari Bank, CEO, Sanatkumar Banwaskar

Overall budgets contents are moderate, agri provisions are very good, no change in income tax and no relief for white color people. Corporate tax reduced by 5%, may benefit co-op banks otherwise no benefit for the coop sector.

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Comments ( 2 )

  1. ISHWER C NAIK

    “Cooperative” has figured in the Budget in a negative way. Idea that the farmers do not get fair price for their produce (through APMC presumably) means no confidence in Cooperative marketing. It is a blame APMCs should not take lightly.

  2. CA Shriram Deshpande Dhule

    One major amendment in Income Tax Act was made in section 80AC by which deduction u/s 80P won’t be available to a cooperative society if return is not filed before 30th September.

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