The Karnataka Souharda Cooperative (Amendment) Bill, 2025, was defeated in the Legislative Council on Wednesday, August 20, 2025, with 23 votes in favor and 26 against. The bill, passed by the Karnataka Legislative Assembly just a day earlier on August 19, aimed to reform the governance of cooperative societies but faced fierce opposition from BJP and JD(S) members, whose majority in the Upper House proved decisive.
The absence of key Congress Members of the Legislative Council (MLCs) significantly contributed to the bill’s rejection, marking a major embarrassment for the state government. Council Chairman Basavaraj Horatti oversaw a heated debate where opposition members raised concerns over several provisions, including the requirement for cooperative societies to maintain 20% of deposits as statutory liquid reserves (SLR) to curb misappropriation. They also objected to mandatory annual declarations of assets and liabilities by candidates, directors, and CEOs, arguing it could be relaxed to once every two years.
Law and Parliamentary Affairs Minister H.K. Patil defended the bill, emphasizing its intent to enhance transparency and accountability in cooperative societies. He urged members to evaluate the bill on its merits, clarifying that it aimed to standardize voting rights, election procedures, and management structures. However, opposition members criticized the SLR requirement, stating it could restrict cooperatives’ financial flexibility, as members often struggle to withdraw deposits. They also opposed amendments to Section 18, which governs investments, citing the need for prior registrar approval for investments in scheduled banks and the shift to mandatory audits every three years instead of five.
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Despite Patil’s assurances, the opposition demanded a vote, leading to the bill’s defeat. This setback highlights the Congress government’s ongoing struggle to secure a majority in the Legislative Council, where the BJP-JD(S) alliance continues to wield significant influence. The rejection raises questions about the future of cooperative reforms in Karnataka, with potential implications for the state’s cooperative sector governance.
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