Cooperative Society
A cooperative society is a group of people who come together to help each other and boost their economic well-being. It’s like a team where individuals join forces voluntarily to work together and support one another. The main idea is to ensure that everyone involved benefits and makes a profit. This type of society operates based on the principles of self-help and mutual assistance.
The members of a cooperative society share similar interests, pool their resources, and use them efficiently for the common good. The goal is to ensure that every member earns a profit, and the society is formed to promote thrift, self-help, and mutual assistance among its members.
In India, cooperative societies are governed by either the Co-operative Societies Act of the respective state or the Multi-State Co-operative Societies Act of 2002. If a society aims to serve members in a specific state, it follows that state’s law. If its reach extends beyond one state, it abides by the Multi-State Co-operative Societies Act. The National Co-operative Union of India (NCUI) and the National Co-operative Development Corporation (NCDC) play crucial roles in promoting cooperative movements in the country. They help these societies thrive and contribute to the economic well-being of their members.
History and Evolution of Cooperative Society in India
Early Practices of Cooperation: Even before the formal establishment of cooperative structures came into being through the passing of a law, the practice of the concept of cooperation and cooperative activities were prevalent in several parts of India. Village communities collectively creating permanent assets like village tanks or village forests called Devarai or Vanarai were fairly common. Similarly, instances of pooling of resources by groups, like foodgrains after harvest to lend to needy members of the group before the next harvest, or collecting small contributions in cash at regular intervals to lend to members of the group viz., Chit Funds, impounded water by putting up bunds and agreed to ensure equitable distribution of water, as well as harvesting were yearly partnerships of peasants to cultivate jointly, and distribute the harvested produce in proportion to the labour and bullock power contributed by their partners, were similar instances of cooperation.
Agricultural Distress and Famine Commissions: The agricultural conditions and absence of institutional arrangements to provide finance to agriculturists during the latter part of the nineteenth century led to mounting distress and discontent. The Famine Commission of 1880 and 20 years later, the Famine Commission 1901 both highlighted the deep indebtedness of the Indian farmer, resulting in many cases in his land passing into the possession of the money lending classes. The Deccan Riots and the prevailing environment of discontent resulted in the government taking various initiatives but the legislative measures did not substantially improve the situation.
Proposal for Agricultural Banks: The proposal for agricultural banks was first mooted in 1858 and again in 1881 by Mr. William Wedderburn the District Judge of Ahmednagar, in consultation with Justice M.G. Ranade, but was not accepted. In March 1892, Mr. Frederick Nicholson was placed by the Governor of Madras Presidency (for enquiring into the possibility) of introducing in this Presidency, a system of agricultural or other land banks and submitted his report in two volumes in 1895 and 1897. In 1901 the Famine Commission recommended the establishment of Rural Agricultural Banks through the establishment of Mutual Credit Associations, and such steps were taken by the Government of North Western provinces and Oudh. The underlying idea of a number of persons combining together was the voluntary creation of a new and valuable security.
Cooperative Credit Societies Act, 1904: Giving attention to these developments and to provide a legal basis for cooperative societies, the Edward Law Committee with Mr. Nicholson as one of the members was appointed by the Government to examine and recommend a course of action. The Cooperative Societies Bill, based on the recommendations of this Committee, was enacted on 25th March, 1904. As its name suggests, the Cooperative Credit Societies Act was restricted to credit cooperatives. By 1911, there were 5,300 societies in existence with a membership of over 3 lakhs. The first few cooperative societies registered in India under the 1904 Act in the first 5-6 years are as follows: Rajahuli Village Bank, Jorhat, Jorhat Cooperative Town Bank and Charigaon Village Bank, Jorhat, Assam (1904), Tirur Primary Agricultural Cooperative Bank Ltd., Tamil Nadu (1904), Agriculture Service Cooperative Society Ltd., Devgaon, Piparia, MP (1905), Bains Cooperative Thrift & Credit Society Ltd., Punjab (1905), Bilipada Service Cooperative Society Ltd., Orissa (1905), Government of India, Sectt. Cooperative Thrift & Credit Society (1905), Kanginhal Vyvasaya Seva Sahakari Bank Ltd., Karnataka (1905), Kasabe Tadvale Cooperative MultiPurpose Society, Maharashtra (1905), Premier Urban Credit Society of Calcutta, West Bengal (1905), Chittoor Cooperative Town Bank, Andhra Pradesh (1907), Rohika Union of Cooperative Credit Societies Ltd., Bihar (1909).
Cooperative Societies Act, 1912: With the developments in terms of growth in the number of cooperatives, far exceeding anticipation, the Cooperative Societies Act of 1912 became a necessity and cooperatives could be organised under this Act for providing non-credit services to their members. The Act also provided for Federations of cooperatives. Maclagan Committee on Cooperation (1914) The Banking Crisis and the First World War both affected the growth of cooperatives. Although member deposits in cooperatives increased sharply, the war affected the export and prices of cash crops adversely, resulting in increased over-dues of loans of primary agricultural societies.
Government of India Act, 1919: In 1919, with the passing of the Reforms Act, Cooperation as a subject was transferred to the provinces. The Bombay Cooperative Societies Act of 1925, the first provincial Act to be passed, among others, introduced the principle of one-man one-vote. The agricultural credit scenario was a matter of concern and various committees looked into the problems of cooperative banks in various provinces. The Royal Commission on Agriculture in 1928 also reviewed the cooperative sector and among others recommended the setting up of land mortgage banks.
Post-Independence Development: After India attained Independence in 1947, cooperative development received a boost, with cooperatives being given a vital role in the various plans formulated by the Planning Commission. The First Five Year Plan (1951-56), outlined in detail the vision of the cooperative movement in India and the rationale for emphasising cooperatives and panchayats as preferred organisations for economic and political development. The Plan emphasised the adoption of the cooperative method of organisation to cover all aspects of community development. It provided for setting up of urban cooperative banks, industrial cooperatives of workers, consumer cooperatives, housing cooperatives, diffusion of knowledge through cooperative training and education and recommended that every government department follow the policy of building up cooperatives. All India Rural Credit Survey Committee (1951) A major watershed initiative at this time was the appointment by the Government of the Gorwala Committee, popularly known as the All India Rural Credit Survey Committee.
Mehta Committee and Second World War Impact: The setting up of the Reserve Bank of India in 1935 helped regulate the working of cooperative banks and agricultural credit societies, and the Mehta Committee in 1949 recommended a major reshaping of the cooperative credit structure. The Second World War led to stagnation of the cooperative movement with economic hardships affecting the peasantry.
Amul and Cooperative Dairies: The 1950s witnessed the emergence of the dairy cooperative movement, led by the iconic Amul cooperative in Gujarat. The success of Amul and the White Revolution in the 1970s, driven by Operation Flood, showcased the potential of cooperatives in the agricultural sector.
Economic Reforms and New Initiatives: The 1990s marked a period of economic liberalisation in India. This prompted the need for cooperative reforms to enhance efficiency and competitiveness vis-à-vis the private sector. The Companies Amendment Act of 2002 introduced the concept of Producer Companies as an alternative institutional form for promoting cooperatives.
Parallel Legislation and National Policy: To promote autonomy and democratic functioning, several states enacted Parallel Cooperative Acts. The National Cooperative Policy of 2002 aimed to facilitate the development of cooperatives as self-reliant, autonomous, and democratically managed institutions.
Recent Amendments and Acts: In the early 2000s, amendments were made to the National Cooperative Development Corporation (NCDC) Act and the Companies Act to broaden the scope and funding for cooperatives. The Multi-State Cooperative Societies Act was modified in 2002 to align with the Model Cooperatives Act.
97th Constitutional Amendment Act of 2011:
- Fundamental Right to Form Cooperative Societies (Article 19): The amendment established the right to form cooperative societies as a fundamental right under Article 19 of the Constitution. This recognition emphasised the importance of cooperatives in the socio-economic development of the country.
- Directive Principle of State Policy (Article 43-B): A new Directive Principle of State Policy was introduced, focusing on the promotion of cooperative societies. This highlighted the commitment of the state towards fostering the growth and development of cooperatives as a means of socio-economic progress.
- Introduction of Part IX-B – “The Co-operative Societies” (Articles 243-ZH to 243-ZT): The 97th Amendment added a new part to the Constitution specifically dedicated to cooperative societies. This part, known as Part IX-B, outlined various aspects of the organisation, functioning, and promotion of cooperative societies.
- Parliament’s Authority to Frame Laws for Multi-State Cooperative Societies (MSCS): The amendment authorised the Parliament to enact laws related to multi-state cooperative societies (MSCS). State legislatures were given the authority to legislate on other types of cooperative societies, emphasising a cooperative federalism approach.
Creation of the Union Ministry of Cooperation (2021): In response to the constitutional amendment, the Union Ministry of Cooperation was established in 2021. This ministry took over the responsibilities related to cooperatives, which were previously under the purview of the Ministry of Agriculture.
Passage of Multi-State Co-operative Societies (Amendment) Bill, 2022: The objective of this bill was to enhance the regulatory framework for multi-state cooperative societies, ensuring better governance and compliance.
| Phase | Period | Key Developments |
|---|---|---|
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Pre-Independence |
1904- 1930 |
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Pre-Independence |
1930- 1950 |
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Post-Independence |
1950- 1970 |
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Post-Independence |
1970- 1990 |
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Post-1990s |
- |
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97th Constitutional Amendment Act |
2011 |
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Impact of Cooperative Society in India
Empowering Rural Economies
India’s cooperative societies have helped rural economies, provided financial support, and fostered community development. A great example of this is the success of dairy cooperatives, like Amul. Amul was founded in 1946 in Gujarat and has grown to become one of the world’s largest dairy cooperative movements. Small-scale dairy farmers came together to establish the Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets the famous Amul brand. This cooperative model has improved the socio-economic status of participating farmers. By pooling resources and efficiently managing the production, processing, and marketing of milk and dairy products, Amul has ensured fair returns to farmers, breaking the cycle of exploitation by middlemen. The cooperative has not only increased the income of its members, but it has also created a self-sustaining ecosystem that has helped rural development.
Financial Inclusion and Credit Access
Cooperative credit societies have played a big role in providing financial inclusion and credit access to marginalised communities. A good example is the Sewa Cooperative Federation, which works in the informal sector and focuses on empowering women. Founded in 1992, Sewa Cooperative has successfully provided financial services and credit to its members, who are mostly self-employed women working in various small businesses. By providing affordable credit, skill development, and market connections, the cooperative has helped women become economically self-sufficient. This impact goes beyond financial transactions, creating a sense of community and solidarity among members. The success of Sewa Cooperative demonstrates the transformative potential of cooperative societies in meeting the financial needs of vulnerable groups and promoting sustainable livelihoods.
Agricultural Resilience
In the agricultural sector, cooperative societies have been instrumental in strengthening the resilience of farmers. The Karnataka Milk Federation (KMF) is a prime example. Established in 1974, KMF is a federation of district-level dairy cooperatives. By bringing farmers together, KMF has not only increased their collective bargaining power but has also streamlined the supply chain, ensuring fair prices for agricultural produce. Through integrated cooperative efforts, farmers have gained access to technology, market information, and veterinary services, which has led to improved productivity and income. KMF’s success shows that agricultural cooperatives can act as a buffer against market volatility, providing a sustainable model for small and marginal farmers to navigate challenges and improve their livelihoods.
Housing and Urban Development
Cooperative societies have also contributed to housing and urban development. The National Cooperative Housing Federation (NCHF) is a great example. It was founded in 1968 and promotes cooperative housing societies throughout India, allowing people to work together to address their housing needs. NCHF has helped to provide affordable housing for a wide range of urban residents through cooperative financing and joint ownership models. This cooperative approach not only helps to address the housing shortage, but it also fosters a sense of community and shared responsibility. The success of NCHF shows the potential of cooperative societies to help alleviate urban housing challenges and promote sustainable urban development.
Working of Cooperative Society in India
In India, cooperatives are typically established at the village level either by local residents or through government initiatives. Their primary objectives revolve around socio-economic goals such as increasing income for members and reducing poverty within communities. Additionally, they aim to provide improved access to resources like banking credit for farmers, which might be challenging to obtain from traditional banks or private financial institutions due to high-interest rates.
The functioning of cooperatives in India is based on democratic principles. Each member, regardless of their capital investment, holds an equal say in decision-making. This egalitarian approach ensures that all members contribute to the decision-making process, fostering harmony within the group.
The management responsibilities of cooperatives are often transferred from state governments to district boards. These boards are mainly composed of elected representatives from local villages or blocks. The composition includes 1/3 first-nominated commissioners, either appointed by local governing bodies (typically gram panchayats) or selected through interviews conducted after public advertisement. The remaining 2/3 are chosen from existing cooperative societies through secondary nomination.
To ensure proper governance, all board activities must comply with the rules and regulations outlined in the Indian Cooperative Societies Act of 1912 (amended in 2002) or the relevant State Cooperative Laws. This adherence to regulations is crucial for operationalizing decisions throughout the organisation and its established trade networks, connecting regional markets, suppliers, and buyers. It also emphasises the importance of accountability within distinct task divisions delegated to all staff employed within the cooperatives.
Characteristics of Cooperative Societies
- Easy Membership: Joining a cooperative is simple and free, allowing even those with financial constraints to participate voluntarily.
- Democratic Structure: Cooperatives operate democratically, with each member having one vote. Leaders are elected by members, ensuring equality.
- Independent Entity: Registered cooperatives are recognized as independent entities by the government, enabling them to make decisions for the benefit of their members.
- Mutual Benefit: Cooperatives are advantageous for individuals in the middle and low-income brackets. Members support each other, leading to higher profits and mutual trust.
- Financial Stability: Cooperatives mainly operate on cash transactions, reducing the risk of financial losses due to bad loans. This makes them a safe option.
- Common Objective: The primary goal of cooperatives is to help members navigate financial challenges, fostering community support and strengthening relationships.
- Profit Distribution: Surplus produce or profits in cooperatives are rightfully distributed among members based on their shares.
- Professional Management: Cooperatives are managed democratically and professionally, with periodic audits to ensure transparency.
- Economic Welfare: Cooperatives contribute to the economic well-being of members and non-members alike, promoting self-sufficiency and social trust.
- Community Development: By voicing the demands of members in the broader market, cooperatives play a vital role in holistic socio-economic advancement and community support.
Benefits of Cooperatives in India
- Access to Markets and Services: Agricultural cooperatives facilitate market access for farmers’ produce, reaching communities that might otherwise be underserved.
- Risk Distribution and Financial Stability: Cooperative members pool resources, distribute risks, and ensure financial security. This stability enhances market competitiveness, as seen in successful cooperatives like Amul.
- Community Values and Social Responsibility: Cooperatives prioritise community values, supporting initiatives such as educational programs and sustainable practices. Hindustan Co-operative Bank Ltd. contributes to community welfare beyond profit maximisation.
- Democracy, Equality, and Inclusion: Cooperatives empower individuals by providing equal voting rights regardless of age, gender, or religion. This ensures diversity, equality, and inclusion among all stakeholders.
- Economic Activity and Development: Cooperatives stimulate economic activity in underserved areas by making essential goods and services accessible. This, in turn, contributes to the overall development of communities.
- People’s Participation in Development: Despite challenges, cooperatives remain effective in engaging people in development activities, playing a vital role in poverty alleviation programs.
- Social and Economic Welfare: Cooperatives significantly contribute to the social and economic welfare of citizens, addressing issues such as job creation, poverty alleviation, and access to basic services like education and health.
- Global Growth and Success: The success of cooperatives like Amul showcases the global growth and effectiveness of the cooperative model, demonstrating its ability to achieve financial and social objectives.
Laws related to Cooperative Societies
- Multi-State Cooperative Societies (Amendment) Act, 2021: This amendment aimed to strengthen the regulatory framework for multi-state cooperative societies. It included provisions related to registration, management, and governance of such societies.
- Cooperative Banks (Amendment) Act, 2020: The amendment sought to enhance the regulatory framework for cooperative banks. It granted the Reserve Bank of India (RBI) more powers in regulating these banks, ensuring their sound functioning and financial stability.
- Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020: While not exclusively focused on cooperatives, this act allowed farmers to directly sell their produce outside of Agricultural Produce Market Committees (APMCs) and engage with buyers through electronic platforms. This has implications for agricultural cooperatives involved in marketing produce.
- Code on Social Security, 2020: The code aimed to consolidate laws relating to social security benefits for workers, including those engaged in the unorganised sector. Cooperative societies, particularly those focused on workers’ welfare, may have been affected by this code.
Challenges Faced by Cooperative Society
- Unequal Growth Across States: Cooperative societies in states like Maharashtra, Gujarat, and Karnataka have experienced significant progress, often cornering a majority of funds. However, this has led to limited growth in cooperatives in other states. Example: Studies from institutions like Vaikunth Mehta Institute of Cooperative Management highlight the disparity, revealing that certain states dominate in terms of cooperative development.
- Administrative Challenges: Previously managed by the Ministry of Agriculture & Farmers Welfare, cooperatives faced limitations in responding to diverse sectoral needs. The administrative focus was primarily on agriculture, restricting support to cooperatives in other sectors. Example: With the changing nature of cooperative movements, new registrations are increasingly in sectors like housing and labour, requiring a more comprehensive administrative approach.
- Diminishing Role in Lending: Primary Agricultural Credit Societies (PACS), which once played a major role in agricultural lending, now account for less than 10% of such activities, with commercial banks taking over the majority share.
- Lack of Recognition: There is a general lack of recognition for cooperatives as economic institutions among policymakers and the public, hindering their potential impact on economic development. Example: Cooperatives are often not accorded the same status and attention as other economic entities, affecting their ability to influence policy decisions.
- Financial Backing Disparities: While some states receive substantial capital from the central government for cooperatives, others face insufficient funds for development, leading to regional imbalances. Example: Cooperative institutions in states with advanced cooperative structures may receive more funds, leaving less for states with emerging or underdeveloped cooperative movements.
- Shift in Cooperative Movement: The cooperative movement is gradually shifting from its traditional focus on agriculture and dairy to sectors like housing and labor. This transition poses challenges in adapting administrative structures and policies. Example: New cooperative registrations in non-traditional sectors indicate a changing landscape, requiring adjustments in regulatory frameworks.
Committee recommendations to strengthen Cooperative Society in India
Task Force on ‘Revival of Cooperative Institutions’ formed by the Reserve Bank of India (RBI) in 2004, under the chairmanship of Prof. A. Vaidyanathan. This task force made recommendations to improve the legal framework and institutional restructuring, aiming to make cooperative institutions democratic, member-driven, autonomous, and self-reliant. It also proposed a financial assistance approach shared mutually by both the central and state governments to address accumulated losses and strengthen the capital base of cooperatives.
Report of the High Powered Committee on Cooperatives 2009:
1. Vision for Cooperatives:
- Cooperatives should be autonomous, user-centric, and democratically controlled enterprises, fostering self-reliance and sustainability.
- Focus on member development, professionalism, quality, and integrity, with education for awareness building integral to cooperatives.
2. Categorised Problems:
- Internal issues include Membership, Governance, and Operations.
- External challenges involve politicisation and government interference.
3. Legal Enablement:
- Enact a progressive and enabling legislation, adopting the Model Cooperatives Act as a single law replacing existing State Acts.
- Incorporate a clear definition of cooperatives in the Constitution, MSCS Act, and State Cooperative Societies Acts.
4. Active Member Definition:
- Define an active member and grant voting rights only to those actively participating in cooperative affairs.
5. Board Effectiveness:
- Clearly define roles and responsibilities of the cooperative’s Board and executives.
- Mandate fiduciary responsibility for directors, with provisions for disclosure of interests.
- Establish fit and proper criteria for Board members, and mandate training for elected directors.
- Specify qualifications for the post of Managing Director in cooperative by-laws.
6. Addressing Politicization:
- Introduce a voting rights system linked to patronage and active membership.
- Implement a weightage system in higher-tier cooperatives to ensure fair representation.
- Advocate for rotational retirement of Board members to prevent partisanship.
- Restrict voting rights for the first twelve months after joining cooperatives.
- Impose restrictions on contributions to political and religious organizations.
7. Government Equity and Competitiveness:
- Enable repatriation of government equity for cooperatives that received government funding.
- Allow cooperatives to decide their organisational structure, staffing, and undertake strategic measures.
- Remove area restrictions, provide flexibility in business decisions, fund mobilisation, and surplus allocation.
8. Constitution Amendment:
- Propose a Constitutional Amendment to ensure alignment of State Cooperative Societies Acts with the Model Cooperatives Act.
- Establish a higher authority to adjudicate transgressions and maintain uniformity in cooperative legislation.
Reserve Bank of India (RBI): has introduced a revised regulatory framework for Urban Co-operative Banks (UCBs), based on the recommendations of the Expert Committee on Urban Co-operative Banks. The key features of the revised framework include:
- Four-Tiered Regulatory Framework: The framework is designed with four tiers based on the size of deposits and area of operations, allowing for differentiated regulatory prescriptions.
- Minimum Net Worth Requirements: Tier 1 UCBs operating in a single district must have a minimum net worth of ₹2 crore, while all other UCBs across tiers must have a minimum net worth of ₹5 crore. This is aimed at strengthening financial resilience.
- Capital Adequacy Requirements: The minimum Capital to Risk-weighted Assets Ratio (CRAR) for Tier 1 UCBs is retained at 9%, while Tier 2, Tier 3, and Tier 4 UCBs will have a revised minimum CRAR of 12% to strengthen their capital structure.
- Glide Path for Compliance: UCBs not meeting the requirements will be provided with a glide path of five years for net worth and three years for CRAR to facilitate a smooth transition to the revised norms.
- Branch Expansion: UCBs meeting the revised Financially Sound and Well Managed (FSWM) criteria will be allowed automatic route for branch expansion, permitting them to open new branches up to 10% of the number of branches at the end of the previous financial year.
- Risk Weights for Housing Loans: Risk weights for housing loans will be assigned based on Loan to Value (LTV) Ratio alone, resulting in capital savings for UCBs across all tiers.
- Inclusion of Revaluation Reserves: Revaluation reserves will be considered for inclusion in Tier-I capital, subject to applicable discount, similar to scheduled commercial banks.
- Working Group for Capital Augmentation: A Working Group comprising representatives from RBI, SEBI, and the Ministry of Co-operation, Government of India, will be constituted to examine issues related to capital augmentation under the provisions of the Banking Regulation Act.
- Umbrella Organization: The recommendations regarding the Umbrella Organization for the UCB sector will be examined once the entity is fully operational.
Data / Statistics
- There are more than 8 lakh registered cooperative societies in India, mainly in areas like agriculture, banking, and housing.
- There are around 194,195 cooperative dairy societies and 330 cooperative sugar mills in India. Sugar mills play a big role, accounting for about 35% of the total sugar production in the country.
Government Schemes
New National Cooperation Policy will help in realising the vision of ‘Sahakar se Samriddhi’, promoting the cooperative based economic development model, strengthening the cooperative movement in the country and deepening its reach up to the grassroots.
The Ministry of Cooperation in India has undertaken 48 new initiatives to strengthen various aspects of cooperative societies.
Making Primary Cooperatives Transparent and Economically Vibrant (14 Initiatives):
- Model Bye-Laws for PACS for multipurpose and transparent entities.
- Strengthening PACS through computerization.
- Setting up new multi-purpose PACS, dairy, and fishery cooperatives.
- Decentralised grain storage plan for food security.
- PACS as Common Service Centers (CSCs) for better access to e-services.
- Formation of new Farmer Producer Organizations (FPOs) by PACS.
- PACS given priority for retail petrol/diesel outlets.
- PACS eligible for LPG Distributorship.
- PACS as Jan Aushadhi Kendra for access to generic medicines.
- PACS as Pradhan Mantri Kisan Samriddhi Kendras (PMKSK) for fertiliser distribution.
- Convergence of PM-KUSUM at PACS level for energy security.
- PACS to carry out O&M of rural piped water supply schemes (PWS).
- Micro-ATMs to Bank Mitra Cooperative Societies for doorstep financial services.
- Rupay Kisan Credit Card to Members of Milk Cooperatives.
Strengthening Urban and Rural Cooperative Banks (9 Initiatives):
- UCBs are allowed to open new branches.
- UCBs are allowed to offer doorstep services.
- One-time settlement of outstanding loans for UCBs.
- Increased time limit to achieve Priority Sector Lending (PSL) targets for UCBs.
- Designation of a Nodal Officer in RBI for regular interaction with UCBs.
- Doubled individual housing loan limit by RBI for Rural and Urban Cooperative Banks.
- Rural Co-operative Banks can now lend to the commercial real estate/residential housing sector.
- Reduced licence fee for onboarding Cooperative Banks to ‘Aadhaar Enabled Payment System.’
- Non-scheduled UCBs, StCBs, and DCCBs notified as Member Lending Institutions (MLIs) in CGTMSE Scheme.
Relief to Cooperative Societies in Income Tax Act (6 Initiatives):
- Surcharge reduced for co-operative societies.
- MAT reduced for cooperatives.
- Clarification issued to remove difficulties in cash transactions by cooperatives.
- Flat lower tax rate for new cooperatives commencing manufacturing activities.
- Increased limit for deposits and loans in cash by PACS and PCARDBs.
- Increased cash withdrawal limit for cooperatives without TDS.
Revival of Cooperative Sugar Mills (4 Initiatives):
- Relief from Income Tax to Sugar Cooperative Mills.
- Resolution of pending issues related to Income Tax of Sugar Cooperative Mills.
- Rs. 10,000 crore loan scheme launched by NCDC for strengthening Sugar Cooperative Mills.
- Preference to Cooperative Sugar Mills in the purchase of ethanol.
Three New Multi-State Societies at the National Level (3 Initiatives):
- New National Multi-State Cooperative Seed Society for certified seeds.
- New National Multi-State Cooperative Organic Society for organic farming.
- New National Multi-State Cooperative Export Society for promoting exports.
Capacity Building in Cooperatives (3 Initiatives):
- Establishment of the World’s Largest Cooperative University.
- New Scheme of Cooperative Education and Training.
- Promotion of training and awareness through the National Council for Cooperative Training.
Use of Information Technology for ‘Ease of Doing Business’ (2 Initiatives):
- Computerization to strengthen the Central Registrar’s Office.
- Scheme for computerization of the office of RCSs in States and Union Territories.
Other Initiatives (7 Initiatives):
- New National Cooperative Database for authentic and updated data repository.
- Formulation of New National Cooperative Policy.
- Multi-State Co-operative Societies (Amendment) Bill, 2022.
- Inclusion of Cooperatives as ‘buyers’ on GeM portal.
- Expansion of the National Cooperative Development Corporation.
- Computerization of Agriculture and Rural Development Banks (ARDBs).
- Refund to Investors of Sahara Group of Societies.
Role of Cooperatives societies and its Success Story in India
Agricultural Credit and Rural Development: Cooperative credit societies in India, such as the Krishak Cooperative Credit Society in Haryana, play a pivotal role in supporting the agricultural sector and rural development. By providing financial assistance to farmers, these cooperatives enable them to meet various agricultural and allied needs, including purchasing seeds, fertilisers, and equipment. Importantly, they offer a lifeline to farmers by facilitating easy access to credit, thereby reducing their dependency on exploitative moneylenders. This cooperative model helps prevent farmers from falling into the debt trap. Additionally, cooperative credit societies contribute to rural development by not only addressing the immediate financial needs of farmers but also supporting broader agricultural activities and related infrastructure projects.
Marketing and Processing: Agricultural marketing cooperatives, exemplified by the Sahakari Bazaar Samiti in Maharashtra, are instrumental in empowering farmers to collectively sell their produce. This cooperative creates a platform for farmers to pool their resources and negotiate with buyers, ensuring better prices and improved market access. Simultaneously, processing cooperatives, like the Nilgiris Dairy Farm in TamilNadu, contribute to value addition by engaging in activities like food processing. Nilgiris is a cooperative that not only markets dairy products but also processes them, ensuring higher returns to its members.
Consumer Cooperatives: Consumer cooperatives, such as the Jaipur Consumer Cooperative Stores Limited in Rajasthan, focus on eliminating middlemen and providing essential goods to members at reasonable prices. By doing so, they ensure the availability of quality products and protect consumers from exploitation. The Jaipur Consumer Cooperative Stores Limited supplies goods at affordable rates to its members, addressing the needs of consumers while promoting ethical business practices.
Housing Cooperatives: Housing cooperatives, like the Bangalore Metropolitan Region Development Authority (BMRDA) Cooperative Housing Society in Karnataka, enable individuals to collectively address their housing needs. Members pool their resources to construct, maintain, and manage residential complexes. This cooperative model leads to cost-effective and well-maintained living spaces, making home ownership more affordable.
Handloom and Handicraft Cooperatives: Cooperatives in the handloom and handicraft sector, such as the Pochampally Handloom Weavers Cooperative Society in Telangana, support artisans and weavers. These cooperatives provide a platform for collective production, marketing, and selling of handloom and handicraft products, empowering skilled artisans and preserving traditional crafts.
Fishery and Dairy Cooperatives: In the fisheries and dairy sectors, cooperatives empower fishermen and dairy farmers by offering support in production, marketing, and value addition. For instance, the Kerala State Poultry Development Corporation (KEPCO) promotes poultry farming cooperatives, ensuring fair returns to poultry farmers. In the dairy sector, the Gujarat Cooperative Milk Marketing Federation (GCMMF), popularly known as Amul, exemplifies the success of cooperative endeavours in enhancing the income of dairy farmers.
Credit and Thrift Cooperatives: Credit cooperatives, like the Thrissur District Cooperative Bank in Kerala, extend financial services to members for various purposes, including business ventures and personal needs. Thrift cooperatives encourage members to save and promote a culture of financial discipline. The Thrissur District Cooperative Bank provides credit facilities to diverse sectors, contributing to the sustainable development of the region.
Multi-State Cooperative Societies (MSCS): Multi-State Cooperative Societies, such as the National Agricultural Cooperative Marketing Federation of India (NAFED), operate across multiple states, fostering economic integration and coordination among different regions. NAFED facilitates cooperation and collaboration on a larger scale, contributing to national economic growth. This cooperative plays a crucial role in marketing agricultural produce and ensuring fair prices for farmers.
Livestock and Poultry Cooperatives: Cooperatives in the livestock and poultry sector, like the Udaipur Zila Dugdh Utpadak Sahakari Sangh, support animal husbandry activities, including breeding, feed supply, and marketing of livestock products. These cooperatives enhance the bargaining power of small-scale producers in the market. The Udaipur Zila Dugdh Utpadak Sahakari Sangh promotes dairy farming cooperatives, benefiting dairy farmers in the region.
Women Empowerment: Women’s cooperative societies, such as the Banashankari Women’s Cooperative Society in Karnataka, empower women by providing them with opportunities for economic participation and skill development. These cooperatives often focus on sectors like handcrafts, weaving, and small-scale entrepreneurship. The Banashankari Women’s Cooperative Society has been instrumental in uplifting women economically through various activities, including handcrafts and textile production.
1.Amul (Anand Milk Union Limited):
Amul’s journey began in 1946 in the town of Anand, Gujarat, when farmers, led by visionary leaders like Tribhuvandas Patel and VergheseKurien, came together to form cooperative societies. Frustrated by the exploitation of middlemen and the volatile dairy market, these farmers decided to take control of their destiny. They pooled their resources, established milk collection centers, and built a dairy processing plant. Through collective effort and innovative marketing strategies, such as the iconic “Amul girl” advertisements, Amul gained widespread popularity and became synonymous with quality dairy products. Today, it stands as a shining example of the power of cooperative enterprise, empowering millions of dairy farmers and transforming the landscape of the Indian dairy industry.
2.Indian Farmers Fertiliser Cooperative Limited (IFFCO):
IFFCO traces its roots back to the mid-1960s when farmers across India faced challenges in accessing affordable fertilizers. Recognizing the need for a cooperative solution, leaders like Dr. U.S. Awasthi spearheaded the formation of IFFCO. By mobilizing resources from farmers and partnering with government agencies, IFFCO established fertilizer manufacturing plants and distribution networks. Through cooperative principles of collective ownership and democratic control, IFFCO ensured that farmers had access to high-quality fertilizers at reasonable prices. Over the years, it has expanded its operations, diversified into allied sectors, and emerged as a global player in the fertilizer industry, empowering farmers and driving agricultural growth.4
3.Saraswat Bank:
Saraswat Bank has its origins in the early 20th century when a group of social reformers and visionaries in Mumbai sought to address the financial needs of the local community. In 1918, they laid the foundation for Saraswat Bank as a cooperative society with the aim of providing accessible and affordable banking services to all. Over the decades, Saraswat Bank expanded its reach, embraced technological advancements, and diversified its product offerings. By adhering to cooperative principles of member ownership, community involvement, and social responsibility, Saraswat Bank earned the trust of its customers and emerged as one of the leading cooperative banks in India, contributing to financial inclusion and economic development.
4.Nandini Milk Cooperative:
The story of Nandini Milk Cooperative begins in Karnataka, where dairy farmers faced challenges in marketing their milk and obtaining fair prices. In the 1970s, inspired by the success of the Amul model, farmers in Karnataka decided to replicate the cooperative dairy model in their region. With support from the government and dairy development agencies, they formed Nandini Milk Cooperative. By establishing milk collection centers, processing facilities, and marketing channels, Nandini empowered dairy farmers, improved milk quality, and ensured a steady income for its members. Today, Nandini is a household name in Karnataka, symbolizing the success of cooperative dairy farming in the state.
5.Kerala State Cooperative Rubber Marketing Federation (RUBBERMARK):
RUBBERMARK’s journey began in Kerala, where rubber farmers struggled with fluctuating prices and lack of market access. In the early 2000s, recognizing the need to empower rubber farmers, the Kerala government and rubber growers’ associations came together to form RUBBERMARK. The federation provided a platform for rubber farmers to collectively market their produce, negotiate fair prices, and access value-added services. Through initiatives like quality certification, market intelligence, and technology adoption, RUBBERMARK transformed the rubber industry in Kerala, empowering farmers and ensuring sustainable livelihoods.
6.Sahakar Bharati:
SahakarBharati originated as a grassroots movement to promote the cooperative ideology and empower communities across India. Formed by visionary leaders and social activists in the 1970s, SahakarBharati aimed to revitalize the cooperative sector, which was facing challenges due to policy neglect and bureaucratic interference. Through advocacy campaigns, policy dialogues, and capacity-building initiatives, SahakarBharati mobilized support for cooperative principles and practices. The organization played a pivotal role in shaping cooperative policies, fostering cooperative education, and strengthening grassroots cooperatives in various sectors, including agriculture, banking, and housing.
7.Tamil Nadu Cooperative Milk Producers’ Federation (TCMPF):
TCMPF, popularly known as Aavin, traces its roots to Tamil Nadu, where dairy farmers struggled with low milk prices and lack of market integration. In the 1960s, inspired by the success of the Amul model, Tamil Nadu dairy farmers decided to organize themselves into cooperatives. With support from the government and dairy development agencies, TCMPF was established to streamline milk collection, processing, and marketing. Through a network of dairy cooperatives and modern processing plants, Aavin revolutionized the dairy industry in Tamil Nadu, empowering farmers and ensuring a steady supply of quality milk to consumers.
8.Kudumbashree:
Kudumbashree’s journey began in Kerala as a poverty alleviation program aimed at empowering women and marginalized communities. Launched in 1998 by the Government of Kerala, Kudumbashree adopted a community-based, participatory approach to development. Through the formation of neighborhood groups, women were mobilized to pool their resources, skills, and talents. Kudumbashree provided training, financial support, and market linkages to these groups, enabling them to undertake various income-generating activities. Over the years, Kudumbashree has evolved into one of the largest women’s empowerment programs in India, empowering millions of women and families to improve their socio-economic status.
