COOPERATIVE MOVEMENT

SUBJECT- RURAL DEVELOPMENT

Presented To- Presented By-

Mr. Siddik Khan  Amit Biswal
 Deepak Kumar Swain
 Preetikrishna Panda
 Sefali Senapati
 Subhadeep Nayak
 Swarani Pattanaik
 Winnie Alisha
 INTRODUCTION
 As per the Cooperative Planning Committee “Cooperation is a form of organization in
which persons voluntarily associate together on a basis of equality for the promotion of
their economic interests. Those who come together have a common economic aim
which they cannot achieve by individual isolated action because of the weakness of the
economic position of a large number of them”.

HISTORY OF COOPERATIVE MOVEMENT IN INDIA

Cooperative Credit Societies Act, 1904 - The First Incorporation

 Led to formation of the Edward Law Committee with Mr. Nicholson as one of the
members appointed by the Government to examine and recommend a course of action
for the development and provide cooperation of the societies.
 The Cooperative Societies Bill, was enacted on 25th March, 1904
 HISTORY OF COOPERATIVE MOVEMENT IN INDIA

Cooperative Societies Act, 1912

 Provided for Federations of Cooperatives which led urban cooperative banks convert
themselves into Central Cooperative Banks with primary cooperatives and individuals as
their members.

Maclagen Committee on Cooperation (1914)

 Reason for formation - Banking Crisis and First World War
 Date of formation - October, 1914
 Leader - Sir Edward Maclagan, appointed by Government to study the state of
cooperatives and make recommendations for the future.
 Recommendations - Formation of three-tier structure in every province with primaries at
the base, Central Cooperative Banks at middle and the Provincial Cooperative Bank at
apex, basically to provide short-term and medium-term finance.
 HISTORY OF COOPERATIVE MOVEMENT IN INDIA
Government of India act, 1919:
 As per Reform Act, 1919, the cooperative subject was transferred to the provinces.
 Formation of the Bombay Cooperative Societies Act, 1925, the first provincial act
introduced the principle of one-man one-vote led to setting up of reserve bank in India in
1934.
 Led to formation of the Mehta committee appointed in 1937 recommended
reorganization to multi-purpose cooperatives.

Multi-Unit Cooperative Societies Act, 1942

 Passed in 1942 of Central Registrar of Cooperatives to the State Registrars for all
practical purposes.
 Gadgil Committee in 1944 recommended compulsory adjustment of debts and setting
up of Agricultural Credit Corporations, if cooperative agencies were not strong enough.
 DEVELOPMENTS IN THE POST-INDEPENDENCE ERA
The First Five Year Plan (1951-56) All India Rural Credit Survey Committee (1951)

After Independence, Emphasis on cooperative movement. Agricultural population

Introducing an integrated
not covered by
system of rural credit.
Developing cooperatives and panchayats. cooperatives.

Recommend to follow the policy of building up

cooperatives. Recommend to follow the Appointment of
policy of building up government nominees on
The Second Five-year Plan (1956-1961) cooperatives. their boards.

• All India Rural Credit Survey Committee (AIRCS) National Cooperative

Development and The Reserve Bank of India
• Cooperative Law in 1956 recommended a Model Bill.
Warehousing Board set Act was amended.
• National Development Council Resolution (1958) up.

• About 1900 primary marketing societies.

All India Cooperative State participation and
• National Marketing Federations were established. government representation on
Congress, held at Patna in the Board of Directors of
• Role in promoting the Green Revolution. 1956. cooperatives.
 The Third Five Year Plan (1961-1969) The Fourth Five Year Plan (1969-1974)
Re-organization of cooperatives to make short-term and
NDDB was set-up to replicate the Anand pattern. medium-term structure.

Indian dairy cooperative movement started. Rehabilitation of Central Cooperative Banks.

Preference to consumer or cooperatives in fair price The Mirdha Committee in 1965.

shops.
Insurance Scheme of Reserve Bank of India. Standards for genuineness of cooperative societies.

RBI Act 1934, Banking Regulation Act 1949. Review the existing cooperative laws and practices.

National Institutions Which Came Into Existence In The 1960s

Agricultural Refinance Corporation (1962)
Cooperative Development Corporation (NCDC)-1963
Anand (1964)
National Dairy Development Board (NDDB)
National Cooperative Union of India (NCUI)-1967
Vaikunth Mehta National Institute of Cooperative Management
 FIFTH FIVE YEAR PLAN (1974-79) NABARD ACT, 1981
The National Bank for Agriculture and Rural
Balance the regional Cooperative Efforts
Development (NABARD) Act was passed in 1981 to
differences for towards Under Privileged
Provide Re-finance Support.
cooperative movement Group
Cooperative Banks to enhance credit flow for
Formulation of Farmers agriculture & rural development
Stressed for Professional
Services Cooperative
Management of
Societies in 1972 by MULTI STATE COOPERATIVE
Cooperatives
Planning Commission
SOCIETIES ACT,1984
SIXTH FIVE YEAR PLAN(1979-1985) OBJECTIVE: To introduce a central legislation &
Converting Primary Agriculture Credit uniformity. Management of different state
Societies into Multi Purpose Units
cooperatives.
Improve the Strengthen the linkages
economic condition between consumer &
of rural poor through marketing
MODEL COOPERATIVES ACT, 1990
cooperative efforts cooperatives • In 1990 Choudhary Brahm Perkash, finalized a
Development of diary, Manpower Development in Model Cooperatives Act.
fishery & minor irrigation small & medium • The basic objective of this act was to consider and
cooperatives cooperatives adopt the cooperation at state level.
 THE SEVENTH FIVE 1. Promotes PACS to weaker sections, consumer cooperative movement & professional management.
YEAR PLAN(1985- 2. In 1989 the Agricultural Credit Review Committee should focus on revival of weak agricultural credit
1990) societies.

THE EIGHTH FIVE YEAR

1. Emphasizes to make the cooperative movement self managed, self regulated and self reliant.
PLAN (1992-1997)
2. Improve economic conditions of farmers , labourers, SCs and STs by strengthening the cooperation.

PARALLEL
COOPERATIVE 1. From the ninth plan onwards 9 states enacted parallel cooperative act to enable and ensure
LEGISLATION autonomous and democratic functioning of cooperatives.

MULTI STATE
COOPERATIVE 1. The Multi-State Cooperative Societies (MSCS) Act, 1984 was modified in 2002 relating to the Model
SOCIETIES ACT, 2002 cooperatives act.

NATIONAL
COOPERATIVE 1. OBJECTIVE is to facilitate all round development of cooperatives in the country.
POLICY(2002) 2. Task force by ministry of cooperation suggested a single law. No involvement of MPs or MLAs.

THE COMPANIES
AMENDMENT ACT,
2002 1. It gave the idea about the cooperative enterprises which is an alternative for institutional form.
 COOPERATIVE EDUCATION
Degree of success in cooperative organization is determined by awareness of the members
towards rights and responsibilities.
Each member should know his right and should be willing to exercise his right so that the
organization may maintain true democratic character.
Commission on Cooperative Principles classified into four groups which are to be brought under
cooperative education.

COOPERATIVE AS AN INSTITUTION (INSTITUTIONAL VALUES)

Member Member Self Leadership

Participation
prosperity Growth Regulation Development
 DISTINGUISHING FEATURES OF COOPERATIVES

a) One Man-one Vote Unique to • In the case of private and public sectors, the ultimate decision makers in
Cooperatives cooperatives are member-shareholders.

• In a cooperative, the employers, i.e. shareholders, would have to perform the

b) Employer-employee conflicts dual role of leading and be led, control and be controlled by the employees.

c) Member participation to be •Cooperative is formed to meet the needs of a group of people, the
monitored and managed organization has to fully understand the implications of meeting the needs.

• In decision making, subjective elements based on caste loyalties (socio-

d) Owner-user dual role conflicts cultural disparities) can create serious problems.

e) Leadership based on
•Leadership is any business organisation needs entrepreneurial qualities. The
entrepreneurial and representational
role of leadership changes at different stages of the organisation’s life cycle.
abilities

f) Conferring intangible benefits on • Intangible benefits can be conferred through investments in good education,
shareholder members medical and other infrastructural development.
 COOPERATION ACTIVITIES

CREDIT ACTIVITIES

LONG TERM CREDIT SHORT TERM CREDIT

PRIMARY CENTRAL APEX

 LAND DEVELOPMENT
Long-term credit functions are dealt with by the Land Development Banks at two stages:
• Primary level
• State level
 Land Development Banks otherwise raise resources by floating debentures in markets
guaranteed by State Governments.
 Investments through debentures are mainly from Life Insurance Corporation of India, State
Bank of India and other Commercial Banks such as Reserve Bank of India and Cooperative
Banks.

INVOLVING COOPERATIVES IN RURAL DEVELOPMENTS

Organised cooperatives consisting of members working for ameliorating the conditions of the
rural poor through integrated rural development approach would magnificently create social
consciousness merely inhibiting democratic ideas, sense of social responsibility and
amalgamating poverty stricken groups to mobilize their talent and leadership for rural
reconstruction cutting across the constructional stratifications in the society.
 COOPERATIVES AND RURAL DEVELOPMENT
1. Need for Cooperatives in Rural Development

A
cooperative
has better
intimate
knowledge
Federal in
of the local
situation in character to
which it enable the It is capable
operates. individual of Cooperative
member in a identifying
has horizontal
village the small
producers and vertical
society to It is nearer
who need linkages so
avail services to the
help on that it could
of a people and
priority provide
federation. hence
basis. integrated
appreciate
services.
their needs
2. Cooperative Programmes

Some of the cooperative programmes for the rural development are discussed below:

• Play an important role in increasing agricultural production

Credit and in increasing the standard of living by helping the rural
community.

Cooperative • Plays a vital role as it ensures economic utilization of the

available resources in the rural areas by creating potential
Marketing markets

Processing Cooperative processing a major development is the

Cooperatives emergence of cooperative sugar factories of the growers.

• Madeimpact on the social and economic life of the people, the

Dairy Government have cooperated with the National Dairy Development
Cooperatives Board (NDDB) in the implementation of Operation Flood.
 WOMEN COOPERATIVES
•Cooperatives Movement in India has put emphasis on projecting
•and promoting the interest of weaker sections.
1

•Increase in the number of cooperatives has led to an increased

•participation of women in these cooperatives.
2

•Majority of rural women in India are still illiterate, engaged in unorganized and activities
in agricultural and allied sectors.
3

•Exclusive women's cooperatives were organized and wherever, these cooperatives have
been successful, it has helped to improve the economic condition and social status of
4 women.

•In the year 1990 there were 5478 women primary cooperative societies with a total
membership of 3,43,404. The paid up and working and capital was Rs.67.3 crores and the
5 business operation of these societies were to the tune of Rs. 28.6 crores.
 FUNCTION OF THE COOPERATIVE DEPARTMENT

Power of Registration
• The Registrar is empowered to register a cooperative under the Cooperative Societies Act and the cooperative cannot
formally start functioning unless it is registered by the Registrar or any other officer duly authorized by him in his behalf. The
Registrar issues a registration certificate under his seal and signature.
Power of Audit
• The Registrar in most States is having the powers to get the accounts of a cooperative audited by the staff appointed for the
purpose. In certain States like U.P. audit is independent of the Registrar of Cooperative Societies.
Power of Arbitration
• The Registrar has got powers to decide a dispute referred to him or to an officer duly authorized by him.
Power of Winding up Power of Winding up
• The Registrar has the power to order for winding-up of a cooperative and appoint to a liquidator subject to the right of the
cooperative concerned for making an appeal to the Same Government.
Powers of Inspection, Enquiry and Control
• Registrar or a person duly authorized by him can inspect any cooperative and can make enquiry into the financial status of a
cooperative. The Registrar has also the powers to supersede the management of a cooperative if on enquiry it is found that
the operations of the cooperative are detrimental to the interests of the members.
Powers to issue corrective directives
• The Registrar has been empowered to take corrective measures under the Act and Rules in cases where he considers
necessary and expedient in the interest of a cooperative in particular and cooperative movement in general.
 ROLE OF VOLUNTARY ORGANIZATION IN COOPERATIVE DEVELOPMENT
Organization Of Women Cooperatives For Rural Women

Women Farm Labour Cooperatives:

1. Agriculture is the main economic
activity for rural women who in

Rural Women Artisan Cooperatives:

majority are land less. In the 1. The female population 1. Dairy Farming, Poultry,
absence of institutional base, these belonging to the households of Bee Keeping, Fisheries & Fish
women are generally exploited. small and marginal farmers can be Marketing, Sheep Breeding,

Cereal Processing Cooperatives:

2. The Report of “Committee on grouped into artisans cooperative Goat Rearing
Status of Women in India” mentions societies.
2. Papad Making. Puffed Rice
that “the main disabilities and 2. The traditional skill which they Processing, Roasting Of
source of exploitation of agricultural possess e.g. punja durrie weaving, Grains, Bakery Products.
labour are rooted in their basket making, zari work,

Agro based Industrial

Spice Grinding
landlessness, lack of organisation handloom weaving, brass
and inequality of status”. engraving, etc. have to be
3. Organisation of Farm Women identified for the purpose.
Modernisation and skill

Cooperatives:
Cooperatives will give them joint
bargaining power for better wages development will be necessary.
and save them from other
exploitation.
4. Cooperative extension/education
services and other social
developmental services could be
extended to such women groups.
NATIONAL COOPERATIVE DEVELOPMENT CORPORATION

 The National Cooperative Development Corporation (NCDC) was

established by an Act of Parliament in 1963 as a statutory
Corporation under the Ministry of Agriculture and farmers
empowerment.
 NCDC has the responsibility of planning, promoting and financing
programmes for production, processing, marketing, storage, export
and import of agricultural produce, food stuffs, certain other notified
commodities.
PROBLEMS AND CHALLENGES THAT COOPERATIVES FACE TODAY

Serious inadequacies
in governance
including that related
to Boards roles and
responsibilities.
Inability to ensure
A general lack of
active membership,
recognition of
speedy exit of non-
cooperatives as
user members, lack
economic institutions
of member
both amongst the
communication and
policy makers and
awareness building
public at large.
measures.
Politicization and
excessive role of the
government chiefly arising
out of the loop holes and
restrictive provisions in
Lack of cost the Cooperative Acts.
competitiveness
arising out of issues
such as overstaffing, Inability to attract
a general top-down and retain competent
approach in forming professionals.
cooperatives
including the tiered
structures. Lack of efforts for
capital formation
particularly that
concerning enhancing
member equity and
member stake.
 AMENDMENT TO THE CONSTITUTION

Number and term of members

of Board of Directors and its
office bearers.

Supersession of Board of
Election of members of Board Directors

The Boards of cooperatives even where there is a minor

government shareholding of financial assistance or any
guarantee by the government can be superseded.
 AMENDMENT TO THE MULTI-STATE COOPERATIVE SOCIETIES ACT, 2002

Fair, enforceable provision for

Internationally accepted
Ensure that the cooperatives fiduciary responsibility,
definition of Cooperative
are user owned and user mandatory for the directors on
Society reflecting its voluntary,
controlled. Introduce concept cooperative boards also to
autonomous, democratic
of “active member” disclose certain information to
nature
avoid conflict of interests

Provisions for raising of capital

through issue of non-voting Put restriction on contribution Deletion of Rulemaking
shares and IPO may be to political and religious powers.
included organizations
 CONCLUSION

 Cooperation is a form of organization in which persons voluntarily associate

together on a basis of equality for the promotion of their economic interests.

 Those who come together have a common economic aim which they cannot
achieve by individual isolated action because of the weakness of the economic
position of a large number of them”.

 It is a business organization which is democratically managed and which provides an

opportunity to overcome individual weakness by collective efforts.