Cooperative Societies in India

Why in the news?

The International Day of Cooperatives was observed on July 5th, which highlights the role of cooperatives in promoting the welfare of people worldwide.

What are cooperative societies?

• Cooperatives - They are a self-governed group of people who voluntarily come together to work for economic, social and cultural interests.
• Purpose - They are formed to help their members, who are mainly from the economically weaker sections, and will serve common interests.

What is historical background of cooperatives societies in India?

• Historical existence – It is the concept of collaboration and cooperative activity that was widespread throughout India even before any legislation got established.
  • For example - They existed in the form of building assets like community tanks as well as community forests.
• Spatial distribution - Different regions had varied forms of cooperation, such as kuris, chit funds, bhishies, and phads.
• Types – It includes agricultural cooperatives, consumer cooperatives, housing cooperatives, and banking cooperatives.

How did modern cooperative movement evolved in India?

• Industrial Revolution - The aftermath of the Industrial Revolution shaped the modern cooperative movement in India in the late 19^th centuries.
• Government Committee – A committee headed by Sir Edward Law enacted the Cooperative Credit Societies Act in 1904 to address the challenges.
• It outlined the framework for establishing cooperative societies, registration, liabilities, etc.

• Other statutory measures – The Cooperatives Societies Act 1912, addressed the drawbacks of the 1904 Act.
• It broadened the focus to encompass handloom weavers, marketing groups, and other artisan societies.
• Emergence of regional societies -The 1^st Cooperative Housing Society, the Madras Cooperative Union was established in 1914.
  • Bombay Central Cooperative Institute in 1918.
  • Other establishments in Bengal, Bihar, Orissa, Punjab, and other states emerged following the 1912 Act, further fueling the impetus of the cooperative movement. 

Dr. Verghese Kurien is the Father of White Revolution in India.

How cooperative societies help rural economies in India?

• Uplifts rural economy – It provides connectivity to the district and state levels, removal of middlemen, cooperatives increase livelihood opportunities.
• Fostering financial inclusion – It give farmers access to credit and financial services and it helped farmers to manage capital shortages and ensure real-time support.
  • For example, Primary Agricultural Credit Societies (PACS) provides credit, input supply, and other financial services to farmers.
• Creates jobs – By supporting local industries, they are instrumental in the creation of jobs.
• Skilling and Development - Training and capacity-building initiatives helped members to improve productivity and efficiency.
• Promotes Social Inclusion – It promotes participation of women, small farmers, and marginalized groups thus fosters equity and self-reliance.
• Develops local infrastructure - Profits are reinvested in local infrastructure, education, and health, thereby driving holistic rural development.

What are the measures taken in India?

• Computerisation of PACS - The government has initiated the computerisation of Primary Agricultural Credit Societies (PACS) to improve their efficiency and transparency.
• Tax benefits to cooperative societies - Benefit from reduced surcharge rates and concessional tax regimes, enhancing cooperativesincome and supporting rural and farming communities.
• Participation of PACS in LPG distributorship - PACS are being encouraged to participate in LPG distributorship, expanding their business opportunities and community reach.
• Convergence of the PM Kusum scheme - Enabled farmers to adopt renewable energy solutions and support sustainable agriculture.
• Further strengthening and expanding the model of cooperative network worldwide. 

What lies ahead?

• Enhancing efficiency – Adopting digital technologies and professional management can help to improve transparency, efficiency, and competitiveness.
• Expanding cooperatives– Interlinking over different sectors and ensuring inclusive participation could boost growth and empower members, especially women and youth.

References

1. The Hindu| Cooperative societies: Key to equitable development
2. CRCS| Central Registrar of Cooperative Societies