CO-OPERATIVE MOVEMENT IN INDIA

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UPSC MAINS SOCIOLOGY SYLLABUS

Paper 2 – Section C – Social Changes in India
(v) Social Movements in Modern India:
(a) Peasants and farmers movements.
(b) Women’s movement.
(c) Backward classes & Dalit movement.
(d) Environmental movements.
(e) Ethnicity and Identity movements.




INTRODUCTION

The concept of Co-operation envisages a group of persons having one or more common economic needs, who voluntarily agree to pool their resources-both human and material and use them for mutual benefit through an enterprise managed by them on democratic lines. It is joint enterprise of those who are not financially strong and cannot stand on their own and therefore, come together not with a view of getting profits but to overcome disability arising out of want of adequate financial resources and thus better their economic condition. Co-operatives enable the members to put their best to attain a higher standard of living for themselves without exploiting others. It honours human values and also provides incentives.


GENESIS OF COOPERATIVE MOVEMENTS

“Co-operation is not, in any way new to India. It has been known and practised in this country since time immemorial. In ancient India, it took four principal forms : Kula, grama, sreni and jati.” Historically speaking, kula was the first form of co-operative activity that emerged in Indian Society. Co-operation at the level of grama, emerged after kula became a stabilised unit. The Grama Sabha was a co-operative organisation which undertook works for the economic and social progress of the village. The sreni is a later development which emerged in the post-vedic era. It was a co-operative and economic organisation of artisans, industrial and handicraft workers, merchants, traders, bankers, agriculturists, house-builders, workers in construction job and building contractors. An old system of raising money in South India is known as Chit Funds and Nidhis, the bunda system in Vidarbha, the Phad system in Kolhapur and Gonehi system in Andhra.

 

EVOLUTION OF CO-OPERATIVE MOVEMENT

Co-operative movement in India was introduced as a state policy and owes its origin to the enactment of Co-operative Societies Act, 1904. The Act of 1904 provided for the organisation of primary credit societies and stress was laid on the promotion of agricultural credit only. In 1919, there were 28,000 societies with 11 lakh members and Rs. 15 crores as working capital. Under the Reforms Act of 1919, co-operation became a transferred subject, under the charge of a minister, in each state.

An important role was assigned to co-operative organisations in the First Five Year Plan. The planning commission emphasised the co-ordination of the activities of village panchayats and the co-operatives. Another important event of this period was the publication of the report of the Committee of Direction of the All India Rural Credit Survey in 1954. One of the chief objectives of the Second Five Year Plan
was the building up of the cooperative sector. In 1964, the Government of India appointed two committees, one on co-operative marketing under the chairmanship of Prof. M. L. Dantwala and the other on co-operation under the chairmanship of Shri. R. N. Mirdha. Both these committees made important recommendations on the basis of which the co-operative policy for the Fourth Plan was formulated.

National Cooperative Development Corporation (NCDC), a statutory corporation, was set up under National Cooperative Development Corporation Act, 1962. A major development in the field of credit during the Sixth Plan period was setting up a National Bank for Agriculture and Rural Development (NABARD) in July 1982. Strategy for the Seventh Plan states that the major thrust during the Seventh Year Plan would be to ensure adequate flow to the weaker sections of the population and to less developed areas.


CONSTITUTIONAL PROVISIONS

The Constitution (97th Amendment) Act, 2011 added a new Part IXB right after Part IXA regarding the cooperatives working in India. A new Article 43B was added in the Directive Principles of State Policy (Part IV) regarding the “promotion of cooperative societies”.


CHARACTERISTICS OF CO-OPERATIVE MOVEMENT

  • A co-operative society is an association of several persons like a joint stock company.
  • It is a form of business organization coupled with profit and risk.
  • Admission and retirement of a member in the society is completely voluntary.
  • A co-operative society is managed democratically.
  • Every member has one and only one vote to exercise irrespective of the number of shares held by him.
  • The key-note of co-operation is mutual-help and self-help and its “slogan is,”AlI for one and one for all.”
  • The co-operative movement aims at a socio-economic change through peaceful means.

CHALLENGES OF CO-OPERATIVES

  • The cooperatives have resource constraints as their own funds hardly make a sizeable portfolio of the working capital.
  • By and large the Primary Agricultural Cooperative Societies are disbursing credit only and have not yet emerged as true multipurpose institutions, undertaking diversified functions besides credit.
  • The cooperatives have resource constraints as their owned funds hardly make a sizeable portfolio of the working capital.
  • The picture of credit availability in the Eastern states, tribal and hilly regions is simply dismal.
  • In the Indian context, most of the people are in the grip of illiteracy, ignorance and conservatism. They do not understand the significance of cooperation in their lives.
  • In the absence of proper marketing arrangements and functions at the level of Primary Agricultural Cooperative Societies, the rural poor falls prey to the mercy of middlemen who exploit the situation.
  • The cooperative credit structure is criticised on the ground that it is mostly managed by landlords and large farmers.
  • Sociologists like Sujata Patel and Daniel Thorner hold the view that political interference acts as a formidable obstacle for the growth of cooperative movement.

 


WAY FORWARD

  • The weak and inefficient cooperative societies should either be abolished or merged with strong and efficient ones.
  • Institutional credit should be earmarked not only for small farmers, tenants and share croppers but also for landless workers and artisans.
  • Security requirements for provision of credit should be liberalised. 
  • A package of inputs and services including production units, marketing services and technical guidance on a priority basis for the weaker sections of the rural community should be supplied on a large scale.
  • Red-tapism, political interference, administrative bottlenecks etc. have to be done away with.
  • Those states that have lagged behind should step up their performance and expand their network to cover as much of credit requirements of the farmers as possible.