The Emergence of Co-Operative Society in India

According to the International Cooperative Alliance (ICA), a cooperative society is “an autonomous association of persons who have come together voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.

Provisions of the Constitution:

As a result of the Constitution (97th Amendment Act, 2011), a new Part IXB (Cooperatives) was added immediately after Part IXA (Municipalities), which deals with cooperatives that are active in India.

Beginning of the Indian Cooperative Movement

In India, it was the distress and turmoil that prevailed in the last quarter of the nineteenth century that gave birth to the Cooperative Movement in that country.

The Industrial Revolution had dealt a fatal blow to village industries and pushed people into agriculture, which had become their only source of employment and livelihood since the Industrial Revolution.

In the aftermath of the subdivision and fragmentation of holdings, agriculture had become an unprofitable proposition.

Other factors, such as the inflexibility of land revenue collection, the unpredictable nature of rainfall, and, as a result, lower crop production, compelled farmers to seek assistance from money lenders as well.

The money lenders made money by either purchasing the crop at a low cost or by charging extremely high interest rates on the money they borrowed.

All of these factors emphasised the importance of providing low-cost credit through an alternative lending institution.

The Informal Cooperative Movement in India: Even before the establishment of formal cooperative structures as a result of the passage of a law, the concept of cooperation and cooperative activities were widely practised in various parts of India.

Some of them were referred to as Devarai or Vanarai, Chit Funds, Kuries, Bishies, and Phads, to name a few examples.

Associations for Mutual Loans (Nidhis) were formed in the Madras Presidency during this period.

In the Punjab, a cooperative society modelled after the cooperative model was established in 1891 for the purpose of controlling the common land of the village for the benefit of the members.

Each and every one of these efforts was entirely voluntary and strictly non-official.

The first official step was taken after the Deccan riots, when Sir William Wedderburn proposed the establishment of agricultural banks as a remedy for rural indebtedness, which was accepted.

Cooperative Movement After Independence

A component of the Mixed Economy:

In the years following its independence, the country adopted a strategy of planned economic development in order to establish a mixed economy that was divided into three sectors: the public, the private, and the cooperative.

Cooperatives were envisioned as serving as a balancing force between the public and private sectors, according to the vision.

FYPs are comprised of the following:

Following independence, cooperatives were incorporated into Five-Year Plans as a matter of course (FYPs).

Pandit Jawaharlal Nehru considered cooperatives to be one of the three pillars of democracy, with the other two being the Panchayat and the School system, which he considered to be equally important.

Cooperatives have a national policy in the United States.

It was in 1958 that the National Development Council (NDC) recommended a national policy on cooperatives as well as recommendations for training personnel and the establishment of Cooperative Marketing Societies.

In 2002, the Indian government issued a National Policy on Cooperatives, which can be found here.

The NCDC was established in the following ways:

The National Cooperative Development Corporation (NCDC), a statutory corporation established under the National Cooperative Development Corporation Act, 1962, is responsible for cooperative development.

Committees for Cooperatives are established:

In 1954, the Rural Credit Survey Committee recommended that the state participate in cooperatives at all levels, including the local level.

It was the Government of India that appointed the S.T. Raja Committee to make recommendations on amendments to the Cooperative Law.

The committee drafted a Model Act that would allow for state participation and the appointment of government nominees to serve on the boards of directors of cooperative societies that were receiving assistance.

Cooperatives that have been successful in India:

National Cooperative Development Corporation (NCDC), National Agricultural Cooperative Marketing Federation of India (NAFED), Indian Farmers Fertilisers Cooperative Limited (IFFCO), AMUL, and Co-operative Rural Development Trust are among the organisations involved in the agriculture and allied sectors in India (CORDET).

Punjab and Maharashtra Cooperative (PMC) Bank, Bharat Cooperative Bank, and Saraswat Cooperative Bank are among the cooperative banks in the banking sector.

Issues Faced by the Cooperative Sector

• Excessive Cooperative Legislation: Cooperatives in India operate in a variety of industries. According to the Indian Constitution, cooperatives are a state subject, and state cooperative laws and their implementation are vastly different from one another.
• A serious lack of accountability and responsibility in the governance of the organisation, particularly in relation to the roles and responsibilities of the board of directors.

• Failure to Gain Recognition: There is a widespread lack of recognition of cooperatives as economic institutions, both among policymakers and the general public.

• Absence of Capital Formation Efforts: Absence of capital formation efforts, particularly those aimed at enhancing member equity and stake in the organisation.
• People are not well informed about the objectives of the Movement, as well as the rules and regulations governing co-operative institutions.

Conclusion

Increased Cooperative Legislation: In India, cooperatives operate across a variety of industries. In accordance with the Indian Constitution, cooperatives are a state subject, and state cooperative laws, as well as their implementation, differ significantly from one another.

A serious lack of accountability and responsibility in the governance of the organisation, particularly in relation to the roles and responsibilities of the board of directors

Failure to Gain Recognition: There is a general lack of recognition of cooperatives as economic institutions among policymakers as well as the general public.

Absence of Capital Formation Efforts: Absence of capital formation efforts, particularly those aimed at enhancing member equity and stake, among other things,

People are not well informed about the objectives of the Movement, as well as the rules and regulations that govern co-operative institutions.