Cooperative Based Economic Development
What is a Cooperative?
Venture is democratically owned by their members
At least 10 persons aged above 18 years can form
Autonomous association of persons for a jointly-owned enterprise
Compliance under the Co-operative Societies Act, 1912
Key sectors of cooperatives in India
Co-operative Credit Societies e.g. co-op banks
Marketing Cooperative Society e.g ITC
Producer Cooperative Society e.g Amul, Lijjat Papad
Housing Cooperative Society e.g. HUDCO
Consumer Cooperative Society e.g. Apna Bazar
Co-operative Farming Societies e.g IFFCO
Why need a separate ministry?
Why need cooperatives?
They protect the rights of people both producers and consumers
They eliminate the unnecessary profits of middlemen
They provide an opportunity for collective decision making
They provide collective bargaining power and benefits of economies of scale
They are good, reliable opportunities for growth
Higher level of entrepreneurial or social sustainability
Only a few states were benifited
Context: A new Ministry of Cooperation has been recently created by the Centre.
Need for restructuration
Lack of funding
Need for more financial and legal power
How do cooperatives influence politics?
Grass-root politics begins with cooperative movement
They act as pressure groups
They are starting point of a lot of present leaders e.g. Sharad Pawar
They are source of funding and patronage
Challenges for cooperatives
Regional disparities
State cooperative Laws are hinderance
Decline of rural sectors
Cooperatives is a state subject in the Constitution’s 7th Schedule.
Key areas to focus
Housing
Business promotion
Rural sector