NEW DELHI, MARCH 27, 2026: In a significant move aimed at bringing clarity to the long-debated issue of transparency in the cooperative sector, Union Home and Cooperation Minister Amit Shah has stated in the Lok Sabha that the Right to Information Act, 2005 is applicable only to those cooperative institutions that are substantially financed by the government.
Responding to a parliamentary query, the Minister explained that key cooperative institutions such as milk unions, cooperative banks, Agricultural Produce Market Committees (APMCs) and state federations primarily fall under the jurisdiction of state governments. These entities are generally supported through state-level financial assistance and schemes, while select central initiatives like NPDD, SATAT Mission, and PM Matsya Sampada Yojana also contribute to cooperative development.
Reinforcing the government’s commitment to transparency and accountability, the Minister highlighted the provisions of the Multi-State Cooperative Societies (Amendment) Act, 2023, which introduces key reforms to strengthen governance, improve accountability and streamline election processes in multi-state cooperatives.
The clarification assumes significance in light of longstanding ambiguity surrounding the applicability of RTI to cooperative societies. Over the years, the issue has been subject to extensive litigation, with members seeking greater transparency in financial management and governance, while cooperative institutions have emphasized their autonomous and member-driven nature.
The legal position was notably settled by the landmark judgment in Thalappalam Service Cooperative Bank Ltd vs State of Kerala, where the Supreme Court of India held that cooperative societies do not qualify as “public authorities” under the RTI Act unless they are substantially financed or controlled by the government. The Court clearly distinguished between regulatory supervision and deep, pervasive control.
Subsequent rulings by various High Courts, including those in Maharashtra and Kerala, have reaffirmed this principle, consistently examining the extent of government funding and control before determining RTI applicability.
Despite these judicial precedents, operational ambiguity persisted at the field level, leading to inconsistent handling of RTI applications and frequent appeals. The Minister’s clarification is expected to provide much-needed administrative guidance, reduce litigation and ensure uniformity in interpretation.
Experts opine that while the clarification strengthens legal certainty, it also underscores the importance of internal transparency within cooperative institutions. Adoption of voluntary disclosure practices, robust auditing systems, and member-centric governance frameworks will be crucial in enhancing trust and accountability.
As India continues to promote cooperatives as a key pillar of inclusive and rural economic development, the clarification marks a balanced approach preserving institutional autonomy while addressing the legitimate expectations of transparency from members and stakeholders.
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