Co-operatives

Mains Marks Booster     1st August 2023        
output themes
  • Meaning: A co-operative is an autonomous group of people who have come together voluntarily to achieve their common economic, social, and cultural needs and objectives through a democratically governed and collectively owned business.
    • The Ministry of Cooperation reports 8.5 lakh Indian cooperatives with 1.3 crore members.
  • Principles of cooperatives: Cooperatives are founded on self-reliance, accountability, democracy, equality, equity, and solidarity.
  • According to Gandhiji, Co-operation was required for the formation of a socialist society and total decentralisation of power. As he believed, Co-operation was one of the most crucial ways to empower people.

Co-operative Movement in Post-Independence Era  

Co-operative Movement in Post-Independence Era                                         Consitutionals provisions for cooperatives

Importance of Cooperatives

  • Provides agricultural credits and funds to farmers, traders etc. Ex. Sahkari banks of different states.
  • Women Empowerment, Ex. Shree Mahila Gruha Udyog (Lijjat Papad).
  • Creating decent jobs Ex. Amul, Nandani, Provided more than half million jobs in Kenya
  • Provides strategic inputs for the agricultural sector, Ex. IFFCO, KRIBHCO
  • Wish to solve the problems of needy collectively Ex. Cooperative housing society
  • Reduces class conflicts and social cleavages
  • Check bureaucratic evils and follies of political factions
  • Fosters the growth of small and cottage industries EX. TRIFED, Indian Coffee House
  • Consumer societies meet their consumption requirements at concessional rates. Ex. National Cooperative Development Corporation
  • International cooperation, Ex. Ugandan Cooperative College, which provides training in cooperative management and governance.

Challenges

  • Mismanagement: If some secure methods are not used to manage such cooperatives, a massively large membership turns out to be mismanaged.
    •  For Example- Recently failed Urban cooperative banks like Punjab and Maharashtra cooperative bank.
  • Manipulation: During voting for the governing bodies, money is used and mostly the richest farmers won the top positions of chairman and vice-chairman etc.
  • Lack of Knowledge: People are not well informed about the goals of the policies governing cooperative institutions. 
  • Limited Coverage: The majority of these societies have only a small number of members, and they only operate in one or two villages.
  • Functional Weakness: The lack of adequately trained personnel has been detrimental to the Co-operative Movement.
  • Interference by the government: The administration has adopted a patronising tone toward the cooperative movement.
  • Flaws in operation 
    • They have been unable to progress along healthy lines due to this deficiency. 
    • Cooperative have failed to develop effective communication and public relations strategies that promote the concept of collaboration among the general population.

Way Forward

  • Training
  • Cooperatives should take up the task of training farmers in the right use of inputs such as fertilisers, Pesticides, Water etc. and help them understand new technologies in farming.
  • Take an active part in skilling rural youth.
  • It must also extend support to children in academic and professional institutions, and to those who want to form cooperatives, but who are not aware of the various modalities, and requirements.
  • More inclusive: Increased participation of women in the cooperative movement. 
  • Checks & Balances to be updated regularly: There are irregularities in cooperatives and to check them there must be rules and stricter implementation.
  • Use of technology:  
  • To have a transparent, accountable, and efficient system, cooperatives should make effective use of digital technology, especially in governance, banking, and business. 
  • Cooperative societies can contribute to making people familiar with new-age technologies. 

Conclusion

  • The cooperative movement's guiding principle is to unite people while maintaining anonymity. 
  • The movement has the power to provide solutions to people's issues. Cooperatives do have irregularities, though, and to prevent them, rules and stricter enforcement are needed. 
  • Furthermore, market connections for agricultural farmers and cooperative societies are necessary to strengthen cooperatives.

The Multi-State Co-operative Societies (Amendment) Bill, 2022

  • The Bill seeks to amend the Act to align its provisions as per Part IXB of the Constitution and address concerns with the functioning and governance of co-operative societies.

  • Provision of the Bill – 

Features

Multi-State Co-operative Societies Act, 2002

Multi-State Co-operative Societies (Amendment) Bill, 2022

Election of the Board members

Elections to the board are conducted by its existing board

Co-operative Election Authority to be established by the Central government to conduct elections and other functions

Amalgamation of co-operative societies

By passing a resolution with at least two-thirds of the members, present and voting

State co-operative societies to merge into an existing multi-state co-operative society, subject to the respective state laws.

Fund for sick co-operative societies

No Provision

It establishes the Co-operative Rehabilitation, Reconstruction, and Development Fund for the revival of sick multi-state co-operative societies.

Restriction on redemption of government shareholding

Shares of government authorities can be redeemed based on the bye-laws of the society.

It stipulates that the central and state governments cannot redeem any shares without their prior consent.

Redressal of complaints

No Provision

The central government will appoint one or more cooperative ombudsmen with territorial jurisdiction.


Issues and Challenges

  • Reviving sick co-operative societies may burden profitable societies as the bill is effectively imposing a cost on well-functioning co-operatives to bail out poorly functioning ones.
  • Restricting redemption of government shareholding may be against co-operative principles.
  • The Report of the High-Powered Committee on Co-operatives (2009) had recommended against government participation in the share capital of co-operatives since it leads to government control, which could be detrimental to the autonomy of co-operatives.

Conclusion

Over 1500 multi-State co-operative societies in India help their members economically and socially. The amendment proposes the Cooperative Election Authority, Cooperative Information Officer, and Cooperative Ombudsman to make multi-State Cooperative societies more democratic, open, and responsible.

Samadhaan