Introduction: The Spirit of Cooperation
The principle of cooperation, encapsulated in the vision of 'Sahakar se Samriddhi' (Prosperity through Cooperation), is deeply embedded in India's socio-economic fabric. A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise. For UPSC aspirants, understanding their role is crucial, as they intersect with various topics in GS Paper 3 (Indian Economy) and GS Paper 2 (Polity and Governance).
The constitutional backing for cooperatives was solidified by the 97th Constitutional Amendment Act, 2011, which:
- Made the right to form cooperative societies a fundamental right (Article 19(1)(c)).
- Included a new Directive Principle of State Policy on the promotion of cooperative societies (Article 43B).
- Added a new Part IX-B to the Constitution titled "The Co-operative Societies".
The Multifaceted Role of Cooperatives in the Indian Economy
Cooperatives have a pervasive presence across various sectors, acting as a powerful tool for inclusive development.
- Agricultural Revolution: They are the lifeline of the rural economy. Giants like IFFCO and KRIBHCO dominate the fertilizer sector, while Primary Agricultural Credit Societies (PACS) form the base of the rural credit system. The success of the dairy sector, epitomized by AMUL (Anand Milk Union Limited), is a testament to the power of the cooperative model in transforming the lives of millions of small and marginal farmers.
- Financial Inclusion: Cooperative banks (both urban and rural) have been instrumental in extending banking services to the unbanked and under-banked regions of the country. They play a critical role in mobilizing savings and providing credit at affordable rates, thereby challenging the monopoly of traditional moneylenders.
- Employment Generation: The cooperative sector is a major source of employment, especially in rural areas. From handloom and handicrafts cooperatives to fisheries and housing societies, they provide sustainable livelihoods to millions. The story of Shri Mahila Griha Udyog Lijjat Papad is a stellar example of women's empowerment through a cooperative enterprise.
- Food Security: Cooperatives play a vital role in the food supply chain. They are involved in the procurement of food grains for the government, storage in cooperative warehouses, and distribution through the Public Distribution System (PDS), thus ensuring food security for the nation.
- Social Empowerment: By promoting democratic principles and collective action, cooperatives empower marginalized sections of society, including women, Scheduled Castes, and Scheduled Tribes. They provide a platform for these groups to gain economic independence and a voice in local governance.
Challenges Hindering the Cooperative Movement
Despite their significant contributions, cooperatives in India face several persistent challenges:
- Politicisation and Excessive Government Control: Excessive government regulation and political interference have often eroded the autonomous and democratic character of cooperatives, turning them into mere extensions of the state apparatus.
- Weak Governance and Management: A lack of professional management, dormant membership, and vested interests in managing committees have led to operational inefficiencies and poor performance.
- Financial Dependency: Many cooperatives suffer from a weak financial base, poor credit recovery, and an over-dependence on government funding, which compromises their self-reliance.
- Lack of Awareness: A general lack of awareness among members about their rights, roles, and responsibilities often leads to their passive participation in the cooperative's functioning.
- Regional Imbalance: The cooperative movement has not grown uniformly across the country. It is significantly more developed in western states like Maharashtra and Gujarat compared to eastern and northeastern states.
Government Initiatives to Re-energize the Sector
Recognizing the potential of cooperatives, the government has launched several initiatives to revitalize the sector:
- Creation of the Ministry of Cooperation (2021): A landmark step to provide a separate administrative, legal, and policy framework for strengthening the cooperative movement.
- Computerization of PACS: A major scheme aimed at digitizing 63,000 Primary Agricultural Credit Societies to enhance their efficiency, transparency, and accountability.
- New National Cooperation Policy: The government is in the process of formulating a new policy to create an enabling ecosystem for cooperatives to realize their potential.
- Model Bye-Laws for PACS: These have been introduced to enable PACS to diversify their business activities into over 25 areas like dairy, fishery, warehousing, etc.
Way Forward
To truly achieve 'Sahakar se Samriddhi', a multi-pronged approach is needed. The recommendations of committees like the Vaidyanathan Committee on reviving rural cooperative credit institutions should be implemented in spirit. The focus must be on ensuring the autonomous and democratic functioning of cooperatives, free from undue political interference. Investing in capacity building, promoting professional management, and leveraging technology are essential for making them competitive and sustainable. Ultimately, strengthening the cooperative movement is not just an economic imperative but a crucial step towards building a more equitable, inclusive, and self-reliant India.