CO-OPERATIVE SECTOR

EVOLUTION IN INDIA

·         A cooperative ("coop") or co-operative ("co-op") is an autonomous association of  person who  voluntarily cooperate for their mutual social, economic, and cultural benefit.

·         The cooperative movement in India owes its origin to agriculture and allied sectors.

·         End of the 19th century, the problems of rural indebtedness and the consequent conditions of farmers created an environment for the chit funds and cooperative societies.

·          Cooperative movement was an attractive mechanism for pooling their meagre resources for solving common problems relating to credit, supplies of inputs and marketing of agricultural produce.

·         The experience gained in the working of cooperatives led to the enactment of Cooperative Credit Societies Act, 1904. Subsequently, a more comprehensive legislation called the Cooperative Societies Act was enacted.

·         Under the Montague-Chelmsford Reforms of 1919, cooperation became a provincial subject and the provinces were authorized to make their own cooperative laws.

·          Under the Government of India Act, 1935, cooperatives were treated as a provincial subject.

·         The item "Cooperative Societies" is a State Subject under entry No.32 of the State List of the Constitution of India.

·         In order to cover Cooperative Societies with membership from more than one province, the Government of India enacted the Multi-Unit Cooperative Societies Act, 1942.

·         With the emergence of national federations of cooperative societies in various functional areas and to obviate the plethora of different laws governing the same types of societies, a need was felt for a comprehensive Central legislation to consolidate the laws governing such cooperative societies. Therefore, the Multi-State Cooperative Societies Act, 1984 was enacted by Parliament under Entry No. 44 of the Union List of the Constitution of India.

·          After Independence cooperatives assumed a great significance in poverty removal and faster socio-economic growth.

·         Cooperatives became an integral part of the Five Year Plans.

·         In the 1^st Five Year Plan stated that the success of the Plan would be judged by the extent it was implemented through cooperative organisations.

·         The All-India Rural Credit Survey Committee Report, 1954 recommended an integrated approach to cooperative credit.

·         In 1958 the National Development Council (NDC) had recommended a national policy on cooperatives. Jawaharlal Nehru had a strong faith in the cooperative movement.

·         During 1960s, further efforts were made to consolidate the cooperative societies by their re-organisation. Consequently, the number of primary agricultural cooperative credit societies was reduced from around 2lakh to 92,000. 

·         The number of all types of cooperatives increased from 1.81 lakh in 1950-51 to 4.53 lakh in 1996-97.

·         The cooperatives have been operating in various areas of the economy such as credit, production, processing, marketing, input distribution, housing, dairying and textiles. In some of the areas of their activities like dairying, urban banking and housing, sugar and handlooms, the cooperatives have achieved success to an extent but there are larger areas where they have not been so successful.

·         The failure of co-operatives in the country is mainly attributable to: dormant membership and lack of active participation of members in the management of cooperatives. Mounting overdues to cooperative credit institution, lack of mobilisation of internal resources and over-dependence on Government assistance, lack of professional management. Bureaucratic control and interference in the management, political interference and over-politisation have proved harmful to their growth. Predominance of vested interests resulting in non-percolation of benefits to a common member, particularly to the class of persons for whom such cooperatives were basically formed, has also retarded the development of cooperatives. These are the areas which need to be attended to by evolving suitable legislative and policy support. 

DRAWBACKS

·         Dormant membership and lack of active participation of members in the management of cooperatives.

·         Mounting over dues in cooperative credit institutions, lack of mobilization of internal resources and over dependence on government assistance, lack of professional management, bureaucratic control and interference in the management, political interference and over-politicization have proved harmful to their growth.

·         These are the areas which need to be attended to by evolving suitable legislative and policy support.

·         For the success of any developmental effort in the agricultural sector is to synergize with the efforts in the cooperative sector.

·         Cooperative sector of Indian economy has a spiritual content too when it was led by Vinoba Bhave.

·         Most of the financial institutions in the cooperative sector are also run on purely commercial basis diverting fro their social objectives.

WAY AHEAD AND SHARE OF CO-OPERATIVE

·         It is here that the State intervention can make the difference.

·         The grant, subsidies and aid meant for the poor farmers must be channeled through the cooperative sector.

·         Once there are enough resources in the sector in terms of money there will be increased participation by the people and will result in the all round development of the village.

·         Panchayat Raj institutions and cooperative sector can bring about positive change in the rural areas.

·         Cooperatives have extended across 230 million members nationwide.

·         The cooperative credit system largest network in the world and cooperatives has advanced more credit in the Indian agricultural sector than commercial banks.

·         Distribution the Indian Fertilizer Cooperative commands over 35% of the market.

·         In the production of sugar the cooperative share of the market is over 58% in cotton 60%.The cooperative sector accounts for 55% of the looms in the hand-weaving sector.

·         Cooperative process, market and distribute 50% of the edible oil.

·         Dairy cooperative operating under the leadership of the National Dairy Development Board become the largest producer of milk.

·         With the efforts of National Cooperative Union of India the Central Government passed the Multi State Cooperatives Societies Act and also formulated a national cooperative policy that provides greater autonomy to cooperatives.

·         With the passage of the Insurance Act, cooperatives have been allowed to enter into the insurance business. Insurance is a field where the immense potential of cooperatives still remains untapped.

·         In the new economic environment cooperatives at all levels are making efforts to reorient their functions according to the market demands.

·         Cooperatives are also considered to have immense potential to deliver goods and services in areas where both the state and the private sector have failed.