Meaning and Concept
- A co-operative is a voluntary association of persons who unite to meet their common economic, social and cultural needs through jointly-owned and democratically controlled enterprises.
- Emphasizes member benefit over pure profit.
- Co-operatives enhance bargaining power, reduce dependence on intermediaries, and are a tool for socio-economic empowerment.
Evolution of Cooperative Movement
Pre-Independence Era:
- Triggered by peasant agitations in Maharashtra.
- Key legislations:
- Deccan Agricultural Relief Act (1879)
- Co-operative Credit Societies Act (1904): formal start of co-operative movement.
- Multi-Unit Co-operative Societies Act (1942): for societies across provinces.
Post-Independence Era:
- Integrated into Five-Year Plans.
- National Development Council (1958) called for national policy and training.
- Multi-State Co-operative Societies Act (1984): for societies operating in multiple states.
- Success Stories: Green Revolution, White Revolution (Amul), model village development.
Constitutional Provisions (97th Amendment, 2011)
- Article 19(1)(c): Added “co-operative societies” as a fundamental right.
- Article 43B (DPSP): Promotion of voluntary formation and democratic control.
- Part IX-B (Art. 243ZH to 243ZT): Incorporated “The Co-operative Societies”.
Key Features of Part IX-B:
- State legislatures empowered to legislate on:
-
- Incorporation, regulation, winding up.
- Maximum 21 directors, reservation for SC/ST (1 seat), women (2 seats).
- 5-year tenure for Board members.
- Mandatory elections before tenure expiry.
- Suspension: Board can be suspended (max 6 months) for default, negligence, or failure of election.
- Audit & Accountability: Yearly audit; audit of apex societies to be laid before state legislature.
- AGMs: Within 6 months of financial year end.
- Filing Returns: Within 6 months of FY close.
- Offences & Penalties: Defined by state laws.
Governance Features
- Democratic control: One member, one vote.
- Economic participation: Profits shared among members.
- Autonomy and independence.
- Education and training: Key to enhancing member capacity.
- Community development: Ethics of honesty, social responsibility.
Significance in Socio-Economic Development
- Key in rural credit, marketing, storage, and infrastructure.
- E.g., NAFED – helps farmers in direct market access.
- Bridges the gap in remote areas where private/state actors may not function well.
- Encourages social unity and reduces caste/class divisions.
- Provides rural employment, fosters self-help, and ensures inclusive development.
Challenges Faced
- Top-down creation: Lack of grassroots spontaneity.
- Poor governance: Weak board roles, politicisation, poor participation.
- Financial issues: Low member equity, NPA-ridden co-op banks (e.g., PMC crisis).
- Inadequate professionalism: Weak HR, leadership.
- Over-regulation: Excessive government interference.
- Regional imbalance: Uneven success across states.
- Competitiveness: Struggle against private firms and MNCs.
Committees on Co-operatives
- All India Rural Credit Survey Committee (1954)
- Chaudhary Brahm Prakash Committee (1990)
- Mirdha Committee (1996)
- Vikhe Patil Committee (2001)
- S. Vyas Committee (2001 & 2004)
- Jagdish Kapoor Committee (2000)
Why 97th Amendment was Needed
- Cooperatives underperformed despite wide reach.
- Elections were often postponed; political interference was rampant.
- Lacked professionalism, transparency, and accountability.
- Amendment sought to ensure autonomy, democracy, and efficiency.
Way Forward
- Mandatory Member Participation: Legally define minimum activity per member.
- Democratic Functioning: Ensure timely elections, transparency.
- Professionalisation: Leadership training, capacity-building.
- HR Strengthening: Hiring, training, social security norms.
- Regulatory Reforms: Curb state interference, ensure functional autonomy.
- Leverage Technology: For operations, marketing, and outreach.