The Hindu : Karnataka / Bangalore News : Experts want tax on profits of cooperatives to go

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Tuesday, Jan 22, 2008
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Experts want tax on profits of cooperatives to go

Special Correspondent

Cooperative is the last bastion for common man: Yechury

‘Tax on profits of cooperatives is weakening them’
Yechury to raise the matter in Rajya Sabha

— Photo: K. Murali Kumar

SUPPORT FOR COOPERATIVES: Sitaram Yechury (right), CPI(M) MP; C.V. Kumar, seminar convenor; B.K. Chandrashekar, Legislative Council Chairman; and P.G.R. Sindhia (left), BSP general secretary; at a seminar organised by Forum of Urban Cooperative Banks, in Bangalore on Monday.

BANGALORE: Levying income tax on the profits earned by cooperative banks would have a “de-generating effect” and will indirectly affect credit linkage to the middle income group. This was the view of several speakers at a seminar organised by the Forum of Urban Co-operative Banks here. They called for the roll back of this proposal made in the Budget 2007-08.

Inaugurating the seminar, MP (Rajya Sabha) from Communist Party of India (Marxist) Sitaram Yechury said that in a globalised economy all the lower level and micro-level capital generators were forced to be a part of the national and international finance capital funds by mandatory contribution.

“Globalisation features elimination of all regulations and rules that any sovereign country makes to control movement of this capital outside the country,” Mr. Yechury said.

This was one of the reasons why the Finance Minister always spoke about “big banks”.

Mr. Yechury said the cooperative sector was perhaps the last bastion for the common man and the people in the middle classes for their financial needs; it insulated the common man’s economic empowerment from outside economic forces, even from the Government, for that matter. He said for the common man, the cooperative sector banks were important as they provided the avenues for saving as well attaining liquidity at a time of his convenience. By levying income tax on the profit earned by the cooperative banks, the Government was only weakening the roots of economic empowerment of the common people. He said he would sensitise the Rajya Sabha and his party colleagues in the Lok Sabha and bring pressure on the Government to roll back the decision to collect income tax on the profit earned by the cooperative banks.

Chairman of the Karnataka Legislative Council B.K. Chandrashekar said the Indian economic model was guided by social factors that depended on the bondage between the families and bankers.

Bahujan Samaj Party general secretary P.G.R. Sindhia said social justice and economic empowerment go hand in hand and each could not advance at the cost of the other. The Forum of Urban Cooperative Banks on this occasion released a background paper on urban cooperative banks.

Forum convenor C.V. Kumar spoke.

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