Gujarat Cooperatives Protest 10-Fold Hike in Audit Fees

Surat | Gujarat — A storm is brewing in Gujarat’s cooperative sector after the state government announced a 10-fold hike in audit fees through a gazette notification dated September 4, 2025. The decision has triggered outrage across cooperative societies—ranging from milk and service societies to urban credit and forest cooperatives—who fear the increase will severely strain their financial viability.

The sharp escalation links audit fees directly to turnover, meaning larger and well-functioning cooperatives will bear a disproportionately heavy burden. For Gujarat’s thriving milk societies, often hailed as the backbone of rural prosperity, the impact could be devastating.

Calling the hike “unreasonable and ill-timed,” Jayeshbhai Patel (Delad), President of Shri Olpad Choryasi Taluka Cooperative Purchase and Sale Union Ltd., has formally written to the Secretary of the Agriculture, Farmers Welfare, and Cooperation Department demanding an immediate suspension of the new fee structure.

In his letter, Patel said: “The higher the turnover, the higher the audit fee burden. Ironically, cooperatives with strong performance are now being penalized. At a time when competition is stiff and income streams are already limited, this move could push many cooperatives to the brink of collapse.”

He added that the move contradicts the very spirit of India’s newly created Ministry of Cooperation, which was established to empower and strengthen cooperative institutions. “The ministry’s vision is to take cooperatives to new heights. But if this audit fee hike is implemented, it will choke their growth instead of supporting it,” Patel said.

Industry insiders argue that cooperatives are already struggling with rising operational costs, regulatory compliances, and shrinking margins. Adding an inflated audit fee, they say, could discourage transparency rather than encourage it.

A representative of a milk society in South Gujarat remarked, “We exist to serve farmers and villagers, not to make profits. If our audit costs rise tenfold, we will be forced to cut back on essential community services. This is not reform—it’s punishment.”

The Gujarat government, however, maintains that the new structure is aimed at improving accountability and bringing uniformity to the auditing process. The notification has invited objections and suggestions from stakeholders.

But cooperative leaders insist that the government should rethink. “This is not about avoiding audits; it’s about survival. We request the government to withdraw this hike immediately and engage in dialogue with cooperative representatives,” Patel emphasized.