In the nation of India, the traces of cooperative movement(s) originate back to the agriculture as well as the allied sectors and primarily acted as an evolving mechanism for the mass’ resources to be roped in, with an outlook to providing them the advantages of the economies of scales. In the early 1900s, the first attempt to legitimize the cooperatives commenced with the foundation of the ‘Cooperative Credit Societies Act, 1904’, which further incorporated a wider scope with the introduction of ‘Cooperative Societies Act, 1912’. 

Under the Government of India Act, 1919, the subject matter of ‘Cooperation’ was transferred to the then Provinces, which were allowed to form their own laws independently, and under the Government of India Act, 1935, the subject of ‘Cooperatives’ remain under the Provinces. However, currently the subject of ‘Cooperative Societies’ is a part of the State List under Entry 32 of the State List of the Constitution of India. Lastly, with respect to the administration of such cooperative societies, membership was always a delicate matter, wherein, more than one province held a society’s membership. For the same purpose, the Government of India enacted the Multi-Unit Cooperative Societies Act, 1942, which was further replaced by the Multi-State Cooperative Societies Act of 1984, which is currently represented under Entry 44 of the Union List of the Constitution of India. 

NOTE: Cooperative Societies Acts enacted by State Governments are now in place in the respective states.

NEED FOR MINISTRY OF COOPERATION

In light of the recent introduction of the Ministry of Cooperation by the Central Government in Union Budget 2021, the said Ministry has been set up in order to bring about a change in the sector of Cooperative Societies and focus on the uplifting and welfare of the same. 

As mentioned earlier the Cooperative Society was not individually recognized and was treated as a small part of the Ministry of Agriculture and Farmer’s Welfare, the initiative taken by the Central Government is to provide a ‘separate administrative, legal and policy framework for strengthening the cooperative movement in the country’

The role of cooperatives has acquired a new dimension in the changing scenario of globalization and liberalization of Nation’s economy. Internal and structural weaknesses of these institutions combined with lack of proper policy support have neutralized their positive impact. There are wide regional imbalances in the development of the cooperatives in the country. This has necessitated the need for a clear-cut national policy on cooperatives to enable sustained development and growth of healthy and self-reliant cooperatives for meeting the sectoral/regional aspirants of the people in consonance with the principles of cooperation. In this connection, it is also imperative to address the issues which require to be attended to by evolving a suitable legislative and policy support to these institutions.

Therefore, the current National Policy introduced by the Government of India is especially a coordinated initiative to procure adequate and suitable policies as well as legislation in order to support such cooperatives as on set to replenish them.

OBJECTIVES

The objective of the National Policy is to facilitate all-around development of the cooperatives in the country. Under this Policy, cooperatives would be provided the necessary support, encouragement, and assistance, so as to ensure that they work as autonomous, self-reliant, and democratically managed institutions accountable to their members and make a significant contribution to the national economy, particularly in areas that require people’s participation and community efforts. This is all the more important in view of the fact that still a sizeable segment of the population in the country is below the poverty line and the cooperatives are the only appropriate mechanism to lend support to this section of the people.

The National Policy on Cooperatives to this end would seek to achieve:

• Ensuring the functioning of the cooperatives based on basic cooperative values and principles as enshrined in the declaration of the International Cooperative Alliance Congress, 1995;
• Revitalization of the cooperative structure particularly in the sector of agriculture credit;
• Reduction of regional imbalances through the provision of support measures by the Central Government/State Government, particularly in the under-developed and cooperatively undeveloped States/regions;
• Strengthening of the Cooperative Education and Training and Human Resource Development for the professionalization of the management of the Cooperatives;
• Greater participation of members in the management of cooperatives and promoting the concept of user members;
• Amendment/removal of provisions in cooperative structure by entrusting the federations predominantly the role of promotion, guidance, information system, etc. towards their affiliate members and potential members;
• Evolving a system of inbuilt mechanism in Cooperative legislation to ensure timely conduct of general body meetings, elections, and audit of cooperative societies;
• Ensuring that the benefits of the cooperatives’ endeavor reach the poorer sections of the society and encouraging the participation of such sections and women in the management of cooperatives.

Author:

Saloni Thapa, Former Research Assistant at Legal Desire Media & Insights