In a significant development that deepens the ongoing standoff between the Karnataka government and the Raj Bhavan, Governor Thaawar Chand Gehlot has chosen not to grant assent to two contentious amendment bills concerning the state’s cooperative sector. Instead, the Governor has escalated the matter to the President of India, recommending that the Union Government review the proposed legislative changes.
The bills in question — namely, the Karnataka Cooperative Societies (Amendment) Bill, 2024 and the Karnataka Souharda Sahakari (Amendment) Bill, 2024 — were passed by the Karnataka legislature during its July 2023 session. These bills propose major structural and electoral changes to how cooperatives in the state function, aiming, according to the state government, to enhance inclusivity and ensure greater representation for historically disadvantaged groups, including Scheduled Castes (SC), Scheduled Tribes (ST), and women.
The government has defended the amendments as a step toward social justice, asserting that they would improve equity in the cooperative space by broadening the scope of representation. Among the key provisions is the redefinition of voting rights to include members who have defaulted on loans, and the expansion of government-nominated members on the boards of apex cooperative institutions. Specifically, the Karnataka Cooperative Societies (Amendment) Bill proposes to increase government nominees on apex boards from two to three, raising the total number of board members from 22 to 25.
Additionally, the Karnataka Souharda Sahakari (Amendment) Bill, 2024, calls for substantial governance reforms in cooperatives operating under the Souharda Sahakari Act, 1997, introducing mandatory board-level reservations for marginalised communities and increasing the participation of government-nominated individuals in decision-making roles.
However, these proposals have triggered serious reservations at Raj Bhavan. Governor Gehlot has raised red flags over the potential dilution of democratic processes within cooperatives, expressing concerns that an increase in nominated members, especially with voting rights, may overpower elected representatives, undermining the autonomy of these traditionally member-driven institutions.
“The Governor believes that granting voting rights to nominated members could effectively shift control of cooperatives into the hands of government appointees, which is inconsistent with the democratic ethos these bodies are supposed to uphold,” said a Raj Bhavan official familiar with the matter.
Another concern flagged by the Governor is dismantling the independent Cooperative Election Authority. The proposed law seeks to bring cooperative election supervision under a newly formed department under the Registrar of Cooperative Societies, effectively bringing the process under tighter government control. The Raj Bhavan has indicated that this change may compromise the neutrality of elections, allowing for potential state interference in what should be an impartial process.
After prolonged deliberations and failure to reach an agreement, the Governor has exercised his constitutional authority by withholding assent and referring both bills to the President of India for further examination. The Governor’s move now places the matter in the hands of the Union Government, which will determine whether the proposed legislation aligns with broader constitutional principles and cooperative governance norms.
The Karnataka government has not yet issued an official response, though sources within the Chief Minister’s office have confirmed that they are awaiting formal communication from the Raj Bhavan. “Once we receive the official notification, the government will explore appropriate legal and procedural steps,” said a senior official on condition of anonymity.
