Co operative movement in India – A Glimpse“

Co operative movement in India – A Glimpse“

Tapan Kumar Ghosh

After 1991, the age old controlled economy was steered to an open competitive economy in the name of globalization or liberalization. This sudden transition had thrown an all out challenge to the co-operative sector of our country.

Till now there are nearly 5.5 lakh different types of co operative societies in our country with an investment of more than 35 lakh crores of rupees in credit and non credit sectors and with membership capacity of over 23.9 million covering 100 percent villages and more than two third rural households. This means that every 4.5 Indian is a co operative member which is more than in Kenya ( one in five) but less than Canada, Norway, Japan and Honduras ( one in three) ; Germany & USA ( one in four). In New Zealand 40 % and in Singapore 50% population are members of co-operative societies of any form.

History of Co-operative movement in India

History of Indian Co-operative Movement is more than a century old and was basically started against the exploitation of unscrupulous money-lenders to exonerate the farming community from the grip of poverty and indebtedness. The British Government was sincere to improve the conditions of the farming sector, the lifeline of the British economy in India. This had prompted to promote Cooperative Credit Societies in the light of Raiffeisen model credit societies on the basis of recommendation of Sir Fredrick Nicholson. It is, therefore, an appropriate time to discuss the pace of its progress and emerging challenges in the competitive business environment.

India has a unique feature. Unlike developed countries more than 65% of the population is directly or indirectly dependent on agriculture. Though the total land area of India is slightly more than one third area of USA and China, the net irrigated land area is:

	Area in sq km ( Y-2003)	Area of Arable land in %
USA	223,850	18.01
CHINA	545,960	14.86
INDIA	558,080	48.83

In spite of such huge population being dependent on agriculture alone, the contribution of this sector to the Gross Domestic Product (GDP) of our country is gradually slipping from more than 50% in 1948-49 to just 18.4 % in the year 2008-09.

Problems faced by the Indian agriculture

1. Farmers are not provided with basic amenities

2. Inefficient distribution system

3 Lack of knowledge and illiteracy among farmers

The present situation of cooperatives reflects both a threat and an opportunity for national economic development:

It is a threat:

Cooperatives have nearly failed in delivering efficient goods and services in our country to reduce the income gap.

It is an opportunity:

The new economic scenario world over after the collapse of Communist economic model in USSR and recent global meltdown of free economy offer excellent opportunities which could be effectively utilized by the cooperatives to establish itself as an alternative model with equality and sustainability.

Functioning of the co operative Societies

Functioning of cooperative societies in various segments such as agricultural credit, agricultural marketing, fertilizer distribution, agro-processing, dairy and sugar industries, by a study has shown that there are some strong and viable cooperatives. But there are also failure in PACS (Primary Agricultural co operative Societies). The co-operative structure has shown the following weaknesses.

Weaknesses:

1. Internal and Structural weakness at primary level.

2. Working of different cooperatives in isolation rather than unified system

3. Over-dependence on government for financial assistance

4. Restrictive provisions of cooperative law.

5. Lack of professional management and lack of adequate infrastructure

6. Lack of capability to withstand competition and of participation of user-members

7. Lack of responsiveness from federal organizations towards the needs of their member organizations

8. Lack of proper policy support resulting to diminishing performance in mismanagement, inefficiency and corruption in the financing of cooperatives.

All these weaknesses have to be tackled immediately and efficiently for the survival of cooperative movement.

Cooperative Training-Present Condition

“Cooperative training is not merely a prerequisite but it is a permanent condition of Cooperative activities’ said Vaikunthbhai Mehta, one of the most respected cooperators in our country.”

Cooperative training, initiated in India with the recommendation of Saraiya Committee on Cooperative Planning in 1945, is imparted by little over two hundred training institutions at the government and private sectors. All put together, they annually organize around four thousand training program of different duration and train a little over one lakh of personnel out of nearly 14 million employed by cooperatives in India, thus leaving a wide gap between people employed and trained in the cooperative sector. Besides training inadequately, it has also not been entirely possible for the training structure to achieve the objectives for which it was conceived.

The total membership of the PACS is reported to be around 12 crore. Scheduled Castes and Scheduled Tribes and small farmers each, are reported to account for about 36 per cent to 37 per cent of the PAC membership as per NAFSCOB. Only half the members are borrowers - this proportion being less than average among small and marginal farmers and least among Scheduled Castes.

Even in terms of basic functions, there is a considerable diversity across States. In some regions there are a few pure thrift and credit societies that generate resources only from members and do not have financial transactions, with non-members. In Maharashtra, apart from the regular PACS, there are around 22,000 thrift and credit societies (called path sansthas). In States like Kerala, PACS collect deposits from members, as well as non-members, in a significant way. In Andrah Pradesh SEWA model Mutually aided Thrift and Credit Societies work very efficiently.

According to NAFSCOB estimates, approximately 62 per cent of the PACS in the country are viable, 30 per cent are potentially viable and eight per cent are either dormant, defunct or under liquidation. Here again, there are considerable variations across States.

Conclusion:

If India Vision- 2020 is to make a reality with sustainable growth and social equity keeping in view the importance of primary education, basic health and social harmony, there is no alternative to strengthening Co operative movements and empowerment of Women through Self Help Group (SHG).There is also an urgent need for the second Green Revolution to combat the hunger of 1.2 billion countrymen. Efficient Co operative movement at agriculture sector can not only prevent the flow of migration of rural poor towards towns and cities but can build economic self reliance to uplift another 150 million people at middle income group. In all these endeavor, the short sighted Loan Waiver Schemes for the farmers should be the last option for any Government.