A major initiative for reforming the short term cooperative credit system (STCCS) came from the Government of India when it constituted a Task Force in August 2004 to suggest an action plan for reviving rural cooperative credit institutions and legal measures necessary for facilitating this process.
The Task Force, chaired by Prof. A. Vaidyanathan has recommended that any financial restructuring without addressing the root causes of the weaknesses of the system would not result in its sustained revival. The Task Force made several suggestions including a financial package for cleaning up the balance sheets of STCCS, legal and institutional reforms necessary for cooperatives to function as democratic institutions.