Sarat Chandra IAS Academy

Ministry of Co-operation

Ministry of Co-operation

#GS2 #Government Policies and Intervention # Development Processes and the Development Industry

Context: Recently, a separate ‘Ministry of Co-operation’ has been created by the Union Government for realizing the vision of ‘Sahkar se Samriddhi’ (Prosperity through Cooperation)

About the new Ministry of Co-operation:

  • In India, a Co-operative based economic development model is very relevant where each member works with a spirit of responsibility.
  • This ministry will provide a separate administrative, legal and policy framework for strengthening the cooperative movement in the country.
  • It will help deepen Co-operatives as a true people based movement reaching upto the grassroots.
  • The Ministry will work to streamline processes for ‘Ease of doing business’ for co-operatives and enable development of Multi-State Co-operatives (MSCS).
  • With this move, the Government has signalled its deep commitment to community based developmental partnership.
    • It also fulfils the budget announcement made by the finance minister in 2021.

About ‘Co-operatives’:

  • A cooperative is defined as 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.”

-ILO Recommendation 193

  • Cooperatives are important in improving the living and working conditions of women and men globally as well as making essential infrastructure and services available even in areas neglected by the state and investor-driven enterprises.
  • Cooperatives have a proven record of creating and sustaining employment – they are estimated to provide at least 279 million jobs today; they contribute to promoting decent work and advancing sustainable development goals.
  • There are many types of cooperatives such as Consumer Cooperative Society, Producer Cooperative Society, Credit Cooperative Society, Housing Cooperative Society and Marketing Cooperative Society.
  • India is an agricultural country and laid the foundation of World’s biggest cooperative movement in the world.

Characteristics of Cooperative Society

  • Voluntary Association: The membership of a cooperative society is voluntary in nature, i.e it is as per the choice of people.
  • Open Membership: The membership of a cooperative society is open to all i.e, membership is open to all, irrespective of their caste, creed and religion.
  • A cooperative society needs to get registered in order to be considered a legal entity.
  • The members of a cooperative society will have limited liability.
  • They have a Democratic Character with a service motive.

Constitutional Provisions Related to Cooperatives:

  • The Constitution (97th Amendment) Act, 2011 added a new Part IXB right after Part IXA (Municipals) regarding the cooperatives working in India.
  • The word “cooperatives” was added after “unions and associations” in Article 19(1)(c) under Part III of the Constitution. This enables all the citizens to form cooperatives by giving it the status of fundamental right of citizens.
  • A new Article 43B was added in the Directive Principles of State Policy (Part IV) regarding the “promotion of cooperative societies”.

Importance of Cooperatives:

  • It provides agricultural credits and funds where state and private sectors have not been able to do very much.
  • It provides strategic inputs for the agricultural-sector; consumer societies meet their consumption requirements at concessional rates.
  • The products that are sold in the cooperative societies are cheaper than the market.
  • The products that are sold in the cooperative societies are cheaper than the market.
    • There is no black marketing involved.
  • It creates a conducive environment for small and cottage industries.

Challenges and Disadvantages:

  • Mismanagement and Manipulation
  • People are not well informed about the objectives of the Movement, rules and regulations of co-operative institutions.
  • Most of these societies are confined to a few members and their operations extended to only one or two villages.
  • The Co-operative Movement has suffered from inadequacy of trained personnel from times.

Road Ahead:

  • Cooperatives can become crucial to eradicate poverty and for economic development. Israel’s success story for their KIBUTZ is world famous.
  • With the formation of new ministry, the country has taken the right step to ensure the a vibrant cooperative sector builds upon the past successes.
  • New areas are emerging with the advancement of technology and cooperative societies can play a huge role in making people familiar with those areas and technologies.
  • Stricter implementation of rules to check irregularities in cooperatives
  • There should be market linkages for agricultural farmers as well as cooperative societies.

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