India’s Cooperative Movement

Syllabus: Cooperatives

Source: PIB

Context: India’s cooperative movement, rooted in the ethos of *Vasudhaiva Kutumbakam* (“the world is one family”), has played a transformative role in fostering inclusive growth, empowering marginalized communities, and driving rural development.

What are Cooperative Societies?

Cooperative societies are voluntary organizations where individuals with shared interests collaborate to achieve common economic goals. They operate on principles of self-help, mutual assistance, and prioritizing community welfare over profit. Members pool resources, collectively use them, and derive shared benefits.

Types of Cooperatives in India

• Consumers’ Cooperative Societies: Provide goods at reasonable prices, bypassing middlemen.

• *Examples*: Kendriya Bhandar, Apna Bazar.

• Producers’ Cooperative Societies: Support small producers with resources like raw materials.

• *Examples*: Haryana Handloom, APPCO.

• Marketing Cooperative Societies: Help market products of small producers collectively.

• *Example*: AMUL.

• Credit Cooperative Societies: Offer financial assistance to members at reasonable interest rates.

• *Examples*: Urban Cooperative Banks, Village Service Cooperative Societies.

• Farming Cooperative Societies: Facilitate benefits of large-scale farming for small farmers.

• *Examples*: Lift-irrigation cooperatives.

• Housing Cooperative Societies: Provide affordable housing by pooling resources.

• *Examples*: Employees’ Housing Societies.

Evolution of Cooperative Movement in India:

Pre-Independence Era:

• 1904: Cooperative Credit Societies Act—recognized cooperatives legally but limited to credit societies.

• 1912: Cooperative Societies Act—expanded scope to include marketing and artisan societies.

• 1914: Maclagan Committee recommended a three-tier cooperative banking system.

• 1925: Bombay Cooperative Society Act—first provincial cooperative legislation.

• 1942: Multi-Unit Cooperative Societies Act—regulated cooperatives across provinces.

Post-Independence Era:

• Cooperatives integrated into Five-Year Plans, emphasizing economic decentralization and social justice.

• 1963: National Cooperative Development Corporation (NCDC) established to support rural credit.

• 1982: NABARD founded to aid cooperative financing.

• 2002: National Policy on Cooperatives introduced to harmonize the legal framework.

• 2023: MSCS Amendment Act enhanced transparency and governance.

Resurgence of the Cooperative Movement in India:

The Ministry of Cooperation, formed in 2021, has launched initiatives to modernize the sector:

• Model Bye-Laws for PACS: Enable diversified activities, adopted by 32 states.

• Computerization of PACS: ₹2,516 crore project covering 63,000 societies.

• Decentralized Grain Storage Plan: Reduces food grain waste at PACS level.

• PACS as Common Service Centers: Provide over 300 e-services to rural citizens.

• PM Bhartiya Jan Aushadhi Kendras: 2,475 PACS approved to sell generic medicines.

Cooperatives at a Glance

• Sectors: Agriculture, credit, banking, housing, and women’s welfare.

• Role: Promote financial inclusion, provide affordable credit, and reduce socio-economic disparities.

• Examples: AMUL (dairy), NCDC (rural credit), Urban Cooperative Banks (finance).

Conclusion:

India’s cooperative movement embodies the principles of inclusivity and self-reliance. By leveraging cooperatives as engines of rural development and economic empowerment, the government aims to achieve equitable growth.

Insta Links:

• Cooperative-sector-and-its-role-in-indian-farming

• “In the Indian governance system, the role of non-state actors has been only marginal.” Critically examine this statement. (UPSC-2016)

• “In the villages itself no form of credit organisation will be suitable except the cooperative society.” – All India Rural Credit Survey. Discuss this statement in the background of agricultural finance in India. What constraints and challenges do financial institutions supplying agricultural finance face? How can technology be used to better reach and serve rural clients? (UPSC-2014)