After *Union of India v. Rajendra N. Shah* (2021), what protections are left for the autonomy of State cooperatives? Suggest reforms.

In Union of India v. Rajendra N. Shah (2021), the Supreme Court held that Part IX-B (Arts. 243ZH–243ZT) does not apply to State cooperatives. The 97th Amendment had not been ratified by half the States under Article 368(2), so Part IX-B now covers only multi-State societies [1]. The autonomy of State cooperatives therefore rests on thinner safeguards, and most of them are controlled by the States themselves.

Protections that remain

• Fundamental right: Article 19(1)(c) still protects the right to form cooperative societies. It does not protect how a board is made up.
• Directive Principle: Article 43B asks the State to promote autonomous, democratically controlled cooperatives. It cannot be enforced in court.
• State statutes: Laws such as the Maharashtra Co-operative Societies Act (Mah. XXIV of 1961) govern board management and elections [2].
• Judicial review: Ordinances under Article 213 can be tested for a genuine need for "immediate action" (D.C. Wadhwa, Krishna Kumar Singh).

Why these safeguards are weak

• The State that gains also writes the rules: States can rewrite cooperative law, even by ordinance. Maharashtra did this in 2020 [3].
• Funding becomes control: Maharashtra law puts government nominees on boards where the State holds share capital [4]. Earlier, other kinds of State help did not trigger nomination [5]. Each time the trigger is widened, more societies come under government nomination.
• The Union shows the same pattern: The Multi-State Bill, 2022 extended government control to any society that receives a loan or guarantee. PRS warned this may clash with cooperative autonomy [6].

Reforms

• Restore Part IX-B's core by consent: Re-enact it with State ratification, or have States voluntarily adopt its limits: a 21-member board, a fixed 5-year term and independent elections.
• Independent election bodies: Copy the Union's Co-operative Election Authority [6]. It should also conduct chairperson polls, on fixed dates, with a rule letting a meeting adjourned for lack of quorum proceed.
• Nominees advise, not vote: Tie nominees to protecting public share capital [4]. Give them audit and objection rights, but no vote in leadership elections.
• Prospective application: Changes to board composition should take effect only after the current board's term ends.
• Restraint on ordinances: Send cooperative amendments to legislative select committees, and have courts rule on whether an ordinance was valid, not only on interim stays.

After Rajendra Shah, cooperative autonomy depends largely on the goodwill of the governments that fund cooperatives. Writing Article 43B's principles into State law, setting up independent electoral bodies and reviewing ordinances firmly can keep cooperatives member-owned and democratic, in line with SDG 16's goal of accountable institutions.