Q.'Some government control over co-operatives is necessary, but excessive control becomes a challenge.' Explain with reference to government over-regulation.

Co-operatives are registered and supervised under the co-operative law and receive government help, so some supervision is justified.

This statement points to the need for a balance in government's relationship with co-operatives.

Why some control is necessary. Co-operatives are registered and supervised under the co-operative law (in Maharashtra, the Maharashtra Co-operative Societies Act, 1960), and many receive government financial help. Since they handle members' money and public deposits, a degree of government supervision — registration, audit, inspection and regulation — is necessary to protect the interests of members and the public and to prevent fraud and mismanagement.

Why excessive control becomes a challenge. Problems arise when supervision turns into over-regulation — excessive interference in the society's day-to-day working, delays in official approvals, appointment of government nominees on committees, and rigid, restrictive rules. Such over-control:

• reduces the society's autonomy and initiative, going against the principle of Autonomy and Independence, which requires that a co-operative be controlled by its own members;
• makes managements dependent and slow, waiting for official sanction instead of taking prompt business decisions;
• discourages enterprise, since the committee cannot act freely even in the members' interest. …