KATHMANDU: The National Federation of Cooperatives, the umbrella body of the cooperatives, has responded positively to the budget for the next fiscal year, stating that it addresses long-term issues faced by cooperatives nationwide. Issuing a statement on Wednesday, the federation welcomed the budget announcement, particularly the assistance in returning the money of small depositors.

Finance Minister Barshman Pun announced on Tuesday that the budget includes measures to return the savings of up to half a million rupees to the depositors of problematic cooperatives, using property mortgages of the owners.

Speaking at a press conference held at the ministry on Wednesday, Finance Minister Pun reiterated that the plan to return the deposits of up to Rs 500,000 aims to solve the problems faced by the cooperatives sector.

"To address the issues of savings and credit cooperatives, we will return the savings of the depositors, even if it is at least 500,000, by mortgaging the properties of the owners," he said. "This shows that the government is committed to resolving the problems of the cooperatives."

Minister Pun acknowledged that while many cooperatives have performed well, the sector's reputation has been tarnished by a few miscreant organizations. He urged those who have conducted their activities properly not to be discouraged. "Those who have not done wrong should not feel that a mistake has been made in the cooperative sector," he said. "We will support those in trouble."

The federation also welcomed the budget which focuses on helping small depositors recover their money. The federation expressed hope that this year will see the implementation of a debt information center, debt recovery tribunal, savings and loan protection fund, and cooperative promotion fund. The budget also addresses the establishment of a separate regulatory body to supervise savings and credit cooperatives and ensure their operation according to legal principles and policies. The federation stated its readiness to collaborate with the Ministry of Land Management, Cooperatives, and Poverty Alleviation for successful implementation of the provisions announced in the budget.

So far, the federal government has declared 20 cooperatives as problematic. However, more than 500 organizations are struggling to return the depositors’ savings, despite not being formally declared as problematic. The government has been criticism for its lack of action in resolving these issues of cooperatives, despite protests from individuals who have been unable to retrieve their savings from the cooperatives.

To address these problems, the government had formed a task force under the coordination of Dr Jayakant Raut, a member of the National Planning Commission. Although the task force submitted a recommendation report to Prime Minister Pushpa Kamal Dahal in last August, no substantial action has been taken to resolve the issues. Agitating depositors of the problematic cooperatives are now entering the third phase of protests, citing the government's lack of interest in fulfilling the agreements reached with them on two previous occasions.