Co-operative Societies

Cooperative societies are a type of volunteer association. The freedom to form cooperative groups is a basic right, according to Article 19. Cooperative societies exist primarily to serve their members. It is a type of business where people from the same social class and profession collaborate to accomplish a common goal.

Cooperative Society Characteristics

The following features characterise cooperative societies:

Voluntary Association

Membership in a cooperative organisation is voluntary, i.e. it is done at the member’s discretion. Any individual may join the cooperative society and may also leave at any time. Before electing to discontinue membership in the society, the member must give notice.

Open Membership

A cooperative society’s membership is open to everyone, i.e., membership is open to all, regardless of caste, creed, or religion.

1. Registration: To be regarded as a legal body, a cooperative society must be registered. It can enter into transactions and acquire property in its name after registering
2. Limited liability: A cooperative society’s members will have limited responsibility, and the member’s obligation is restricted to the amount of capital provided
3. Democratic Characteristics: A cooperative organisation appoints a management committee, and elected members have the ability to vote and choose among themselves. The management committee is constituted to make critical decisions about society’s activities
4. Service Motive: The development of a cooperative society benefits the community’s weaker members. If the cooperative society makes a profit, it will distribute it to its members as dividends
5. State control: The cooperative society is under the authority and supervision of the state government to protect the interests of society members. Accounts must be kept by the society, which an independent auditor will audit

Cooperative Society Types

The following are some examples of cooperative societies:

1. Consumer Cooperative Society: Consumer cooperative societies are founded to safeguard the interests of consumers. Individuals who want to buy things at low prices are more inclined to join consumer cooperative groups. Considering co-operative societies in India, there are no intermediaries in such societies; the product is acquired straight from the manufacturer and sold to customers
2. Producer Cooperative Society: Producer cooperative societies are founded to defend the interests of small producers. These cooperatives aid producers in keeping their profits and acquiring products that will be useful in creating goods and services
3. Credit Cooperative Society: These cooperative organisations are formed to assist individuals by providing credit. They offer low-interest loans with flexible payback terms to their members, shielding them from the exorbitant interest rates imposed by private moneylenders
4. Housing Cooperative Society: Housing cooperative societies are created to provide housing to the society’s members. This is advantageous for lower-income groups since they can obtain housing assistance at a very cheap cost
5. Marketing Cooperative Society: These organisations are founded to provide a forum for small producers to market their products at competitive costs while also eliminating intermediaries from the chain, assuring good earnings

The Benefits of a Cooperative Society

Some of the benefits of cooperative societies are as follows:

1. Cooperative society items are less expensive than market prices
2. Product procurement is done directly from the producers, eliminating intermediaries and producing greater profit for producers and customers
3. Members of the cooperative organisation can get short-term loans
4. There is no black marketing

Articles

• 243ZH: Provides definitions
• 243ZI: The incorporation of Cooperative Societies is discussed
• 243ZJ: The number and term of the board’s members, as well as the office bearers, are listed 
• 243ZK: Members of the board are chosen through an election process
• 243ZL: Suppression and suspension of the executive committee, as well as interim management 
• 243ZM: Cooperative societies’ audits and accounts
• 243ZN: General body meetings are called to order
• 243ZO: A member’s right to obtain information
• 243ZP: Returns (file returns for every financial year) 
• 243ZQ: Penalties and offences 
• 243ZR: Applicable to multi-state cooperative societies 
• 243ZS: Applicable to Union Territories 
• 243ZT: Existing laws must be maintained

Constitutional Provisions

• The 97th Constitutional Amendment Act (CAA) of 2011 granted Constitutional protection and legitimacy to cooperative societies
• Three changes were made through the 97th Constitutional Amendment Act
• Article 19 of the Indian Constitution establishes the ability to form cooperative societies as a basic right
• It featured a new Directive on State Policy Principles for Promoting co-operative Societies (Article 43-B)
• The Constitution was amended to include a new Part IX-B, allowing “The Cooperative Societies” to be formed (Articles 243-ZH to 243-ZT)
• The state legislature could adopt measures for the formation, regulation, and dissolution of cooperative organisations based on the principles of democratic member control, voluntary formation,  members of an independent auditor who will audit autonomous functioning, and economic participation
• The provisions of this part might apply to the Union Territories. But, the President might direct that the provisions of this part shall not apply to any Union territory (UT) or part thereof as he may specify in the notification

Why do cooperative societies matter?

Every Indian should recognise the value and relevance of cooperative organisations since they are a key contributor to income equality and well-being. Because they are change-makers and reforming, co-operative societies are not the dominant governmental or private financial institutions; They include an economic system with a higher development of entrepreneurial or social sustainability, and they frequently act as interest groups to represent the interests of their members in a larger market environment. Being a member of a cooperative helps you build your trustworthiness as a producer and a customer. Apart from being simple to join, they also ensure fair profit sharing, prioritise the welfare of their members over individual profits, are stable in their operation and output, and get a significant amount of government assistance. Collective action is the main driver behind cooperatives, and it is a spirit of cooperation and unity in the pursuit of common objectives. They are indeed the image of honourable communism in a democratically developing society.

List of National Cooperative societies in India

1. National Cooperative Land Development Banks Federation Limited.
2. National Federation of State Cooperative Banks Limited.
3. National Cooperative Union of India Limited.
4. National Agricultural Cooperative Marketing Federation of India Limited.
5. National Cooperative Consumers Federation of India Limited.
6. National Federation of Cooperative Sugar Factories Limited.
7. National Federation of Industrial Cooperative Limited.
8. National Cooperative Housing Federation Limited.
9. Indian Farmers Fertiliser Cooperative Limited.
10. All India Federation of Cooperative Spinning Mills Limited.
11. All India Industrial Cooperative Banks Federation Limited.
12. National Cooperative Dairy Federation of India Limited.
13. National Heavy Engineering Cooperative Limited.
14. All India Handloom Fabrics Marketing Cooperative Society Limited.
15. National Federation of Urban Cooperative Banks and Credit Societies Limited.
16. Krishak Bharati Cooperative Limited, New Delhi.
17. National Federation of Fishermen’s Cooperative Limited.
18. National Federation of Labour Cooperative Limited.
19. National Cooperative Tobacco Grower’s Federation Limited.
20. Tribal Cooperative Marketing Development Federation of India Limited.
21. *Petrofils Cooperative Limited, Vadodara, Gujarat: Under Liquidation.

Conclusion

Cooperative societies are a type of volunteer association. The freedom to form cooperative groups is a basic right, according to Article 19. Cooperative societies exist primarily to serve their members. It is a type of business where people from the same social class and profession collaborate to accomplish a common goal. Co-operative societies are not the dominant governmental or private financial institutions; They include an economic system with a higher development of entrepreneurial or social sustainability, and they frequently act as interest groups to represent the interests of their members in a larger market environment. Collective action is the main driver behind cooperatives, and it is a spirit of cooperation and unity in the pursuit of common objectives. They are indeed the image of honourable communism in a democratically developing society.