Ministry of Cooperation And Economic Growth!

Ministry of Cooperation And Economic Growth!
  • Through the new ministry, it will help in streamlining the processes for cooperatives and realizing the vision of ‘Sahakar se Samridhi’.
  • Cooperatives on a global scale: According to the International Labor Organization (ILO), a cooperative is an autonomous union of individuals who voluntarily unite to meet their common socio-economic and cultural needs through jointly owned and democratically controlled enterprise.
  • The year 2012 was declared by the UNGA as the ‘International Year of Cooperation.
  • India is an agricultural country and it laid the foundation of the largest cooperative movement in the world.
  • Origin and Nature of Co-operatives in India: The history of the origin of the cooperative movement in India can be traced back to the year 1904, but it became effective in the country only around the year 1950.
  • Co-operative societies in India are spread over various sectors ranging from financial to non-financial.
  • New Cooperative Ministry: This separate administrative structure related to cooperatives was proposed in the Union Budget 2021–22.
  • This ministry will help to strengthen the cooperative as a true people based movement by reaching the grassroots level.
  • This ministry will work to streamline processes for ‘Ease of Doing Business’ for cooperatives and enable the development of Multi-State Cooperative Societies (MSCS).
  • This will help in identifying other areas where cooperatives can operate, which will be beneficial to those working down the value chain.
  • Legal Support: The enactment of the Co-operative Credit Societies Act, 1904 gave a definite structure and shape to the cooperatives in India.
  • The 97th Constitutional Amendment Act, 2011 contains the following amendments:
  • It amended Article 19(I)C by inserting the words ‘or co-operative societies’ after the words ‘or union’.
  • It incorporated Article 43B in Part IV (Directive Principles of State Policy) of the Constitution, according to which, the State shall endeavor to promote voluntary formation, autonomous functioning, democratic control and professional management of cooperatives.
  • It added a new Part IX-B (Articles 243-ZH to 243-ZT) in the Indian Constitution named ‘Co-operative Societies’.
  • Types of Co-operative Societies: There are 8.5 lakh cooperative credit societies in India, with a total of more than 28 crore members. There are 55 types of co-operative societies operating in India, although there are only 7–8 major categories of them.
  • Primary Milk Co-operative Societies numbering about 1,50,000.
  • Primary Agricultural Credit Societies (PACS) having a strength of 95,000.
  • There are about 2.5 lakh cooperative societies in the first two categories, covering 100 percent of the villages and about 75 per cent of the rural population.
  • There are about 1,00,000 credit co-operative societies which are of 4 types:
  • Committees working in urban areas.
  • Societies operating in rural areas but which do not disburse agricultural credit.
  • Co-operative societies for workers and employees in various factories and commercial establishments.
  • Women’s Life Cooperative Credit Committees.
  • Fisheries cooperatives which are small compared to the large coastline and their number is 15,000.
  • About 30,000–35,000 Weavers Cooperative Credit Societies are functioning in the states of Uttar Pradesh, Telangana, Andhra Pradesh, Maharashtra, Odisha.
  • Housing cooperatives are found all over the country.
  • Independent working committees.
  • Cooperation in the Financial Sector: There are three types of co-operative banks operating in the financial sector:
  • Primary Urban Cooperative Banks which are fully reserve bank are regulated by, their number is about 1550.
  • About 300 District Central Cooperative Banks are functioning in about 700 districts across the country.
  • There is one Apex Cooperative Bank functioning in each state.
  • Board Structure: The board structure of co-operative banks has not been made comparatively more responsible. Board members cannot be held accountable for many functions.
  • Co-operative Banks in Rural Area: NITI Aayog According to the data published by NITI Aayog, the income pattern in the rural sector has completely changed. The income from the agriculture sector is 35% and the rest comes from the non-farm sector.
  • The present model of co-operative banks was created almost 50 years ago, it has undergone many changes over time but they are neither sufficient nor uniform, as well as sufficient to support the activities of financial institutions in rural areas. Freedom is not.
  • Milk Production: India contributes 22 percent of the milk production in the world and is the largest milk producing country in the world but the development of dairy sector is very unequal. Only western India dominates this region.
  • Central, North and North-East India does not contribute significantly to the dairy sector.
  • law: State cooperative laws are not in line with the current socio-economic situation. They need to be rewritten or updated in some areas.
  • Lack of access to capital: Access to capital is scarce in India. Co-operative societies do not have access to capital and are dependent only on shareholders.
  • Issues of Co-operative Movement: People are not well aware about the objectives of cooperative movement, rules and regulations of cooperatives.
  • The cooperative movement has also faced inadequacy of trained personnel.
  • Promotion of agro-processing: The processing of agricultural products in India is limited to only a few commodities.
  • Starting food processing activity will increase the shelf life of agricultural produce which will benefit the farmers.
  • Food Processing: The income of farmers can be doubled by the development of the food processing industry.
  • New Business Model for Co-operative Banks: Due to the decline in income from agriculture in rural areas, cooperative banks need a new business model to function.
  • Enhancing overall participation in the dairy sector: Organized dairy sector can provide maximum income to the rural population.
  • There is a need for policies to support ancillary services for the dairy sector such as accessible veterinary services and large scale animal feed production and providing the same at affordable rates.
  • access to capital: To provide access to capital to the cooperative banks for the development needs of the cooperatives.
  • Promoting Co-Operations: Co-operatives have a strong presence in rural areas.
  • Apart from milk cooperatives, other cooperatives such as weavers’ cooperatives and handicrafts cooperatives can be operated. With this, the income of the farmers and the economy of the rural area can be increased tremendously.
  • Urban Area: There are two key areas to focus on in this area: First, ensuring mass housing through cooperatives in urban areas, as the majority of the urban poor live in slums.
  • Second, there are consumer cooperatives in urban areas. There is no other organization doing credible work in the country.
  • Not only do consumer cooperatives need to be strengthened to ensure proper supply of essential commodities, but they can also act as a balancing act when inflation is high.
  • EODB Norms for Co-operative Societies: Ease of doing business norms are being applied to all types of commercial, manufacturing and service activities. All co-operative societies should be given equal support so that they can function without any hindrance.
  • There is a need to create new models to reduce cooperative losses.
  • Companies wholly owned by cooperatives will be promoted so that they can access the money in the cooperative sector and ultimately the sector does not depend solely on government aid or borrowings.
  • India’s economy cannot be completely dependent on urban areas and industrialization.
  • The rural sector has a major role in this, as well as cooperative societies have to play an important role to facilitate this. That is why it is necessary that this sector should be recognized and promoted.
  • There are irregularities in cooperatives, to prevent them, rules have to be made and implemented strictly.

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