Kurukshetra January 2023

 

1. CHAPTER 1: REALISING SAHKAR SE SAMRIDDDHI

Introduction:

Cooperation has remained the philosophy of our nation for centuries. It embodies two important principles “Sah” and “karya”, which means accomplishment of outcome-oriented activities following an all-inclusive manner.

        These are people-centric organizations rather than capital –centric and through collective efforts.

        In a historic move, Government of India created a separate Ministry of Cooperation in July 2021 to enable and spread the growth of cooperation movement in India.

        NCUI 2018 data indicates that there are 8.54 lakhs cooperatives in India spread over 739 district, on an average

 

Types of cooperative societies:

Broadly, cooperatives societies in India could be divided in following 6 categories:

        Cooperative farming societies, also called Farmers Service Societies (FSS)

        Cooperative credit societies, also called Primary agriculture cooperative credit societies (PACS)

        Producers’ cooperative societies

        Marketing cooperative societies

        Housing cooperative societies

        Consumers’ cooperative societies

 

7 Governing Principles of Cooperation:

        Voluntary and Open membership- open to all without any discrimination.

        Democratic member control- member-driver, member-controlled, members participate in policy formulation, one person-one vote.

        Member economic participation- members contribute equitably and utilize the capital of their cooperatives to support economic activities.

        Autonomy and Independence- belief in self help, autonomy through democratic control.

        Education, training and information- Cooperatives provides these to their members, representatives, managers and employees to support development drives.

        Cooperation among cooperatives- by working together though local, regional, national and international structures.

        Concern for Community- through adoption of appropriate policy measures.

 

Ensuring Equitable Spread and Outreach:

        The initial efforts should be such that every village of India should have a primary society, a primary cooperative credit society and should be connected to a nearby cooperative bank.

 There is a huge possibility of promoting larger number of cooperatives in sectors viz. fishery, agricultural processing, primary production, housing and construction. Similarly, there is immense potential in certain other areas like health, medicine, insurance and textiles.

 It is a well-established fact that only the cooperatives can distribute profits equitably and reap benefits for all of its members as maximum profits out of surplus can flow to the shareholders with minimum expenditure incurred on management cost.

 

Cooperation and Economic Empowerment:

        The cooperative model can bring economically weaker sections of our society to the forefront of economic growth and can create widespread financial prosperity.

 There are gleaming examples like Lijjat Papad, Amul and other milk cooperatives in southern States like in Karnataka and many others which have brought economic prosperity to millions of people from marginalised sections of the society.

 

Venturing New Areas through Cooperation:

 There is a need to ensure emergence of large number of cooperatives in new and evolving sectors like insurance, health, tourism, processing, storage, industrial and service sectors, etc.

        The cooperative movement should reach all the villages and should be transformed into a mass movement.

Hon’ble.

 

Meeting Challenges for Effective Cooperation:

While cooperatives are the best route to address empowerment issues, these units should be prepared for the meeting the following modern-day challenges: -

        Transparency- This will restore the trust of small farmers in cooperatives.

 Fair and Regular elections- We need to abide by the democratic values to ensure that the best people are inducted to the cooperative’s platform.

        Move towards professionalism and corporate governance- like models such as IFFCO, Amul etc.

 Better infrastructure and access to business loan and working capital for meeting their plant and machinery needs.

 

Cooperative Federalism — the Only Way:

        “Cooperation” is a State Subject and the State Cooperative Societies are governed by the State specific legislations.

The Union Government is responsible for the management of Multi State Cooperatives.

 We can accomplish a lot of work through constructive and continuous dialogue between the Centre and the States and imbibe the principles of cooperation in our work and actions.

 While the 97” Constitutional Amendment can meet the challenges of the cooperative sector, the Union Government shall play an enabling role to transform the cooperative movement of the country and the jurisdiction of both Centre and States should remain clear and as per the fundamentals of our Constitution.

 

Planning new Cooperation Policy:

 India has 8.5 lakh cooperative units out of which 20 percent [1.77 lakh units] are credit cooperatives. Remaining 80 percent are non-credit cooperatives involved in diverse activities viz. Fishery, Dairy, Producer, Processing, Consumer, Industrial, Marketing, Tourism, Hospital, Housing, Transport, Labour, Farming, Service, Livestock, Multi-purpose Cooperatives, etc.

        About 13 crore farmer households are directly connected to cooperatives.

 The share of cooperative agriculture finance to total is about 25%, fertiliser distribution 35%, fertilizer production 25%, sugar production 31%, milk procurement, production and marketing about 25%, wheat procurement 13%, paddy 20%, fish production 21%, etc.

 All the hurdles and bottlenecks need to be addressed through the new cooperation policy and suitable government interventions. Important policy parameters [4 Ps + 3Es] for attaining Sahkar Se Samridhi as shown.

 

Prosperity through Cooperation: The Seven Vital Parameters
4Ps	4Es
1. People to People Cooperation	1. Ease of Doing Business
2. Production by People	2. Ease of Living
3. People before Profit	3. Ease of Cooperation and Access to Opportunities

 

Dimensions of New Cooperation Policy:

 The Ministry of Cooperation has started dialogues and consultations for firming up a new cooperation policy within the next 8-9 months. The policy will consider the requirements of all cooperative societies from PACs to the Apex Cooperatives.

 

 There is need to explore new areas and work in a cooperative manner with TEAM spirit — where ‘T’ denotes ‘Transparency’, ‘E’ stands for ‘Empowerment’, ‘A’ stands for ‘Aatma Nirbhar’ (‘Self-reliance’) and ‘M’ for ‘Modernisation’

Probable dimensions of new cooperation policy

1. Hassle-free registration process

2. Transparency within administration and cooperative elections.

3. Coordination among different cooperatives.

4. Establishing proper linkages to all societies at village level like dairy, PAC, FPOs, women cooperatives etc.

5. Uniformity and parity of cooperative law within the states.

 

Decoding TEAM Cooperation
T	Transparency	Cooperatives to adopt best practices for their governance with accountability.
E	Empowerment	To persons engaged in farm and non- farm activities.
A	AatmaNirbhar (Self- Reliance)	Through community and collectivized action.
M	Modernisation	With adoption of new technology and its adoption to increase productivity.

 

Conclusion and Road Ahead:

The contribution of cooperatives will have a multiplicative effect on our Prime Minister’s vision of five trillion-dollar Indian economy and enhancing the income of farmers. We need to empower and revive community level primary cooperatives. We should draw inspirations from the Maha Upanishad’s oft-quoted term -Vasudhaiva Kutumbakam meaning all living beings on this earth are a family.

 

2. CHAPTER 2: WOMEN AND YOUTH PARTICIPATION IN COOPERATIVES

 Globally, there are more than 30 lakh cooperatives that engage more than 12 percent of the world’s population (Ministry of Cooperation, 2022c).

        India has 8.55 lakh Cooperatives and about 13 crore people are directly associated with them.

 There are two types of co-operative structures in India i.e. State Cooperative Societies and Multi-State Cooperative Societies.

 Among 300 largest cooperative societies of the world, three societies of India namely Amul, IFFCO and KRIBHCO are included in list.

 

National Cooperative Policy: “Sahkar Se Samriddhi’:

 The New National Cooperative Policy aims to penetrate co-operatives as a true people-based movement reaching up to the grassroots and ensuring ‘Ease of doing business” for co-operatives. Also, it focuses on developing a cooperative based economy model that can significantly boost the ‘Make in India’ initiative of the Government of India.

        The Ministry of Cooperation comprises of separate administrative, legal, digital technology and policy framework

to synergise the cooperative movement in the country.

 The dedicated framework will bring transparency and may promote competition, cooperative marketing and accessibility till every remote rural area.

 Government  has been emphasizing on increasing contribution of Cooperative societies, especially Primary Agriculture Credit Societies (PACS), in setting up Agriculture Infrastructure in the country through schemes such as Agricultural Infrastructure Fund.

        The Jan Dhan Yojana, Pradhan Mantri Fasal Bima Yojana, Pradhan Mantri Krishi Sinchai Yojana, Mudra Scheme

provides an opportunity for cooperatives to collaborate with the government and reap multiple benefits.

 

Cooperatives Niche:

        About 8.5 lakh cooperative units exist across different parts of the country.

          It comprises of 1.5 lakh dairy and housing societies, 97,000 PACS, 46,000 honey cooperative societies, 26,000

consumer societies, fisheries cooperatives and cooperative sugar mills.

        51% villages and 94%farmers are associated with cooperatives in some form or the other.

 Cooperative sector offers about 20% of the total agricultural credit of the country, 35% of the fertiliser distribution, 25% of fertiliser production, 31% of sugar production, more than 10% of milk production, more than 13% procurement of wheat and more than 20% of the procurement of paddy. More than 21% of the fishermen businesses are carried on by cooperative societies.

        At present about 65,000 PACS are under implementation and the government has targeted to make 3 lakh new PACS in 5 years.

 

 

       Niche- (in business) an opportunity to sell a particular product to a particular group of people.        PACS- Primary Agricultural Credit Society (PACS) is a basic unit and smallest co-operative credit institutions in India. It works on the grassroots level (gram panchayat and village level).

 

 

Women and Youth Participation: A catalyst to Cooperative Movement:

 Women played a significant role in the success of many cooperative movements like Anand Milk union limited

(AMUL) and Lijjat.

 As per the latest Periodic Labour Force Survey (PLFS) report for year 2020-21, the estimated Worker Population Ratio (WPR) for male and female was 73.5% and 31.4% respectively (estimated on usual status basis for aged 15 years and above both).

 The female Worker Population Ratio (WPR) (in percent) has increased to 31.4% in 2020-21 from 28.7 % estimated

during 2019-20.

 Out of 8, 54,300 cooperatives in India, only 2.52% of these cooperatives solely comprise women.

 Successful Women Cooperatives which has has contributed in holistic empowerment of women in society includes Women’s Industrial Cooperative Society Limited, Self Employed Women’s Association (SEWA) Cooperatives, Swashrayi Mahila SEWA Bank, Mahila Sewa Lok Swasthya Cooperative, Krishna Dayan (mid wife) cooperative, Sangini Child-Care Workers Cooperative, Abodana Mahila Kapad Chapkam Utpadak SEWA Sahakari Mandali Limited, Mahila Super Bazar, Bhramaramba Mahila Cooperative Banking Society, Usha Cooperative Multi- Purpose Store Limited etc.

 There is also an opportunity to channelize prime demographic window i.e youth participation in cooperative movement. In 2021, youth in the age group of 15-29 years in the country comprise of 27.2% of the population (Youth in India, 2022).

 Cooperatives can support in absorbing a section of youth bulge as it enable young people to pool financial

resources, skills, knowledge to establish an enterprise.

 

Conclusion:

India has the largest cohort of the youngest population and significant female inhabitants that can be mainstreamed to enhance their contribution in transforming society at large. The mission-mode grass root level penetration of cooperatives will leapfrog the vision of country’s development to a New India.

 

3. CHAPTER 3: COOPERATIVE ENTERPRENEURSHIP

 Cooperatives rest on the basic triple tenets of democracy, economic development and social mobilisation.

 The four-fold guiding principles of cooperative movement are Sahkar se Samriddhi; inclusive growth; Aatma Nirbharta through community entrepreneurship; and Cooperation: Beyond Cooperatives.

 

Framework:

        The legal framework of cooperatives is governed by Cooperatives Society Act, Mutually Aided Cooperative Thrift Society Act; and Multi-State Cooperative Societies Act, 2002.

        Cooperative societies with members from one State are registered under the provisions of State Cooperative Societies Act concerned and are regulated by the State Registrars of the Cooperative Societies concerned.

 Cooperative societies with members from more than one State are registered by the Central Registrar of Cooperative Societies under the Multi State Cooperative Societies (MSCS). About 1,509 multi state co-operative societies are registered in the country under the provisions of MSCS Act, 2002.

 

Strengthening the Cooperative Structure:

To strengthen the cooperative sector, a large number of steps are being taken. Some of these include the following:

 The launch of a pan-india project for computerisation of 63,000 PACS which will ensure efficiency of their operations, speedy disposal of loans, lower transition costs, faster audit, reduction in imbalances in payments and accounting with SCBs and DCCBs, enhanced transparency and trustworthiness.

        Draft model Bye-Laws are being prepared for PACS to transform them into multipurpose and multi-dimensional vibrant economic entities.

        Formulation of a scheme — ‘Cooperation to Prosperity’ will encourage rolling out of a coordinated approach of cooperative development to enhance income and growth.

        Formulating scheme for modernising and professionalising the cooperative education and training for capacity building.

        Introducing a new National Cooperation Policy by reviewing the two-decade old policy and exploring new and sustainable growth pathways through cooperation.

        Creation of a National Cooperative Database to facilitate the framing of appropriate policy.

 

Recommendations and Further Steps Which May Be Taken:

 Efforts are needed to ensure convergence of schemes, to facilitate the ease of doing business, urgent need to smoothen registration processes of cooperatives in diverse areas, Udyam certification of MSME for smaller cooperatives may be considered for them to avail benefits of programmes for cooperatives instead of any additional documentation.

        Stress on universal coverage, providing a single unique identity to each cooperative on a technology-driven

single portal.

        Pan-India awareness programme about the cooperative movement and related model of socio-economic growth.

        Capacity building of those working in cooperative sector.

        Focus On digitalization and technological upgradation.

        An exclusive fund for cooperatives to not only finance credit risks but to support brand development, technology

adoption, marketing, advertisement and marketing research, etc.

        A preference policy for cooperatives as ‘sellers’ on GEM portal may be considered to attract more cooperatives as sellers.

        Subsidized participation for cooperatives in National, Regional and State fairs.

        Bigger cooperatives may mentor the weaker and smaller ones.

 

4. CHAPTER 4 & 5 : COOPERATIVES AND RURAL LIVELIHOOD & VIBRANT TOMORROW THROUGH COOPERATIVES

 The cooperative societies engaged in the rural sector provide adequate, affordable and timely credit for the production, processing, storage and marketing of agricultural crops, milk, fish, vegetables, fruits, flowers and other allied products.

        It encourage ‘Production by Masses’ instead of mass production.

Cooperative Movement in India:

 

Indian Cooperative Sector at A Glance: 2016-2017
1	Total Number of Cooperatives	854,355
2	Total Membership of Cooperatives (Crore)	29.006
3	National Level Cooperative Federations	17
4	State Level Cooperative Federations	390
5	District Level Cooperative Federations	2705
6	Multi State Cooperative Societies	1435
7	Primary Agricultural Credit Societies (PACS)	97,961

         It was started in India primarily for dealing with the problem of rural credit.

        The formal era of co-operative movement in India began with the enactment of “Cooperative Credit Societies Act” in 1904 to encourage thrift, self-help and cooperation among farmers, artisans and persons of limited means.

        During the planned era of development cooperatives became an integral part of Five-Year Plans.

 In 2002, the Government of India enunciated a National Cooperative Policy with the objective to ensure more autonomy, accountability and self-reliance in the functioning of cooperatives by providing necessary support, encouragement and assistance to them.

        The 97” Constitutional Amendment Act, 2011 granted protection to cooperative societies by giving Constitutional status to them. It aimed at encouraging economic activities of cooperatives in rural India.

 

Challenges to cooperative sector in India:

        Members of cooperative societies are not actively involved in their functioning.

        In most of the states, cooperatives are not economically viable, hence have become defunct.

        Confined to a few States spread over limited number of villages with meager membership.

        Low participation of marginal sections of societies such as scheduled-casts, scheduled tribes, women and other vulnerable sections of the society.

        Top post of the organization such as chairman and vice-chairman are usually occupied by the richer farmers who

manipulate the organisation for their own benefit.

        Inadequacy of trained, skilled and experienced personnel.

 

Government Initiatives:

        GoI established National Cooperative Development Corporation (NCDC) by an Act of Parliament in 1963, to speed up cooperative movement in the country.

 The Government of India provides assistance to the cooperatives through NCDC for the production, processing, storage, marketing, export and import of agricultural produce, livestock, foodstuffs, industrial goods certain other commodities and services on cooperative principles.

        NCDC also gives assistance to the cooperatives of weaker sections comprising of members from scheduled castes, scheduled tribes, land less labourers and women.

        Through‘Central Sector Integrated Scheme on Agricultural Cooperation’ (CSISAC) through National Cooperative Development Corporation (NCDC), The subsidy varying from 15% to 25% is provided to the cooperatives.

        ‘Yuva Sahakar Cooperative Enterprise Support and Innovation Scheme’ was launched on 14” November 2018

that provides mentorship and financial assistance to youth.

 Union Government has created the Ministry of Co-operation on 6 July 2021, for realizing the vision of ‘Sahkar se Samriddhi’ (Prosperity through Cooperation) by providing a separate administrative, legal and policy framework for strengthening the cooperative movement in the country

        GoI has allocated Rs. 900 crore to the Ministry of Cooperation for the financial year 2022-23.

        Minimum alternate tax (MAT) has been reduced from 18.5% to 15% for cooperatives in the budget 2022-23 to

provide a level-playing field between cooperative societies and companies.

        Budgetary outlay of Rs. 2,516 crores (over a period of 5 years) for the digitalisation of 63,000 functional PACS.

        A scheme for modernising and professionalizing the cooperative education and training institutions across the country is also under formulation.

 

Role of Cooperative Society in development of agri-ecosystem of India:

 Providing Credit Facilities: In the rural cooperative lending structure, state cooperative banks possess the place at top that fulfil the farmers needs of small loan. Both FFS and PACS are field-level rural financial institutions (RFls). These cooperatives have better bargaining power vis-a-vis individuals, they get credit from commercial banks at much cheaper rate.

        Housing facility for poor at affordable prices is provided by Housing cooperative societies.

        Helping consumers- Consumer cooperative societies ensure access consumer goods at cheaper rates to poor rural consumers by purchasing them directly from manufacturers.

        Helping Small Businesses- especially to assist rural youth entrepreneurs, by providing them raw material at cheaper rates and providing them platform to sell their produce.

 

IMPACT OF COOPERATIVE SOCIETIES:

 

1. Dairy Sector (White Revolution):

        Currently there are more than 8 crore families who are getting their livelihood from dairy business. India’s dairy sector has nearly 190000 cooperatives that source milk supply on a daily basis from farmers.

        India’s milk output had risen 44% from 146 million tons in 2014 to 210 million tons currently with growth rate of 6% that is higher than the world average of about 2%.

        National Dairy Development Board (NDDB) launched Operation Flood in 1970s based on a three-tier cooperative

model with focusing entirely on rural population, the country turned self-sufficient in milk output.

 

2. Farm Sector (Green Revolution):

        It started in India in 1966-67.

        Cooperatives played a crucial role in making the movement a success. It positively impacted post-harvest processing, storage, transportation, trade, and input procurement for a range of activities in the agricultural sector.

 Sugar Sector: Under the Sugar Scheme, NCDC has been promoting establishment and development of sugar factories in the co-operative sector so as to help them in achieving the primary objective of ensuring remunerative prices to the farmers for sugarcane.

 

3. Agro Processing and Spinning Mills:

        Cooperatives have created huge employment opportunities through industrialisation of small rural industries and have also supported the farmers by purchasing their produce at remunerative prices.

        These have been successful to some extent to arrest the flow of rural population to urban areas by creating job

opportunities to surplus workforce in rural areas.

 

5. Banking and Finance:

        Cooperatives have played an impressive role in providing credit to the farm labourers and farmers.

        Out of more than 95,000 PACS, only around 63000 are functional. These 63,000 functional PACS are doing

agriculture finance of Rs. 2 lakh crore.

 

1. 5. CHAPTER 6: MODERNISATION AND COMPETITVESS IN COOPERATIVES

 Amongst the 300 largest cooperative societies globally, three — societies - Gujarat Cooperative Milk Marketing Federation popularly referred as Amul, Indian Farmers Fertiliser Cooperative (IFFCO) and Krishak Bharati Cooperative Limited (KRIBHCO) are in India.

 

Schemes for Expanding Cooperative activities:

 Agriculture Infrastructure fund (Ministry of Agriculture and Farmers Welfare) — Interest subvention of 3 percent and credit guarantee is provided by the Government for availing loan up to Rs. 2 crores, for development of infrastructure projects at farm gates, by FPO, PACS, entrepreneurs, start-ups and other beneficiaries.

 Dairy Processing and Infrastructure Development Fund being implemented by the Department of Animal Husbandry and Dairying envisages providing loan assistance and interest subvention of 2.5 percent to State Dairy Federations, District Milk Unions, Milk Producers Companies, Multi State Cooperatives and NDDB subsidiaries across the country.

 Fisheries and Aquaculture Development Fund being implemented through the Department of Fisheries provides concessional finance support facility with 3 percent Interest Subvention for development of various inland fisheries activities.

 Tribal Cooperative Marketing Development Federation of India Limited (TRIFED) spearheads implementation of Van Dhan programme for collection and selling on Minor Forest Produce in districts which have predominantly forest dwelling tribal population.

 Bankers Institute of Rural Development (BIRD) Lucknow, promoted by National Bank for Agriculture and Rural Development (NABARD) is designated as nodal training institution at Central level for FPOs promoted by NABARD and Small Farmers Agri-Business Consortium and other allowed/designated implementing agencies.

 

1. 6. CHAPTER 6: MODERNISATION AND COMPETITVENESS IN COOPERATIVES

Introduction:

 According to the data published by the International Cooperative Alliance in the ‘World Cooperative Monitor’, out of the 300 largest cooperatives in the world, around 30% of cooperatives are engaged in the agriculture and food sector.

        The share of agriculture in cooperatives was 83% in the Netherlands, 55 % in Italy, and 31% in Finland in 2015.

        The United Nations has designated 2012 as the International Year of Cooperatives.

 Moreover, the Food and Agriculture Organization (FAO) states that cooperatives are a pillar for agricultural development and food security in the world.

Outreach of Cooperatives can be broaden in following ways:

 

1. Information and communication technology(ICT):

 Use of innovative ICTs like the Internet of Things (loT), big data analytics, machine learning and Artificial Intelligence have great potential to improve the working of the agriculture cooperatives.

        They can support complex decision-making.

        Deployment of smart technologies enhances final productivity, reduces costs, and optimizes the decision making

process.

        They also provide the facilities for on-farm management, efficiency, and quality control tools.

 

2. Data Aggregation:

 Use of digital technologies in agriculture help in creating information wealth and can immensely help in planning agriculture operations.

        The cooperatives can thus use methods like GIS geospatial analysis, map analytics, etc to maximize their profits