‘Ministry of Cooperation’

Context

Recently, in the cabinet reshuffling, the government announced the formation of a separate Union Ministry of Cooperation, a subject that till date was looked after by the Ministry of Agriculture.

What is a co-operative society?

• A co-operative society is a voluntary association of individuals having common needs who join hands for the achievement of common economic interest.
• Its aim is to serve the interest of the poorer sections of society through the principle of self-help and mutual help.
• The main objective is to provide support to the members.

Objectives of the new Ministry

• It will provide a separate administrative legal and policy framework for strengthening the cooperative movement in the country.
• It will help deepen Co-operatives as a true people based movement reaching upto the grassroots.
• It will strengthen the Co-operative based economic development model which is already very relevant in India where each member works with a spirit of responsibility.
• The Ministry will work to streamline processes for ‘Ease of doing business’ for co-operatives and enable development of Multi-State Co-operatives (MSCS).

Status and Importance of cooperative movement in India

• At presence there are 1, 94,195 cooperative dairy societies and 330 cooperative sugar mill operations.
• In 2019-20, dairy cooperatives had procured 4.80 crore litres of milk from 1.7 crore members and had sold 3.7 crore litres of liquid milk per day.
• Cooperative sugar mills account for 35% of the sugar produced in the country.
• In banking and finance, cooperative institutions are spread across rural and urban areas.
• Village-level primary agricultural credit societies (PACSs) formed by farmer associations are the best example of grassroots-level credit flow.
• These societies anticipate the credit demand of a village and make the demand to the district central cooperative banks (DCCBs).
• State cooperative banks sit at the apex of the rural cooperative lending structure.
• Given that PACSs are a collective of farmers, they have much more bargaining powers than an individual farmer pleading his case at a commercial bank.
• There are also cooperative marketing societies in rural areas and cooperative housing societies in urban areas.
• NABARD’s annual report of 2019-20 counts 95,238 PACSs, 363 DCCBs and 33 state cooperative banks in the country.
• In urban areas, urban cooperative banks (UCBs) and cooperative credit societies extend banking services to many sectors that would otherwise have found it difficult to get into the institutional credit structure.
• According to Reserve Bank of India data, the country has 1,539 UCBs.

Need for the new Ministry

• Various studies have shown the cooperative structure has managed to flourish in only in a handful of states like Maharashtra, Gujarat, and Karnataka etc.
• Under the new Ministry the cooperative movement would get the required financial and legal power needed to penetrate into other states also.
• In recent years, the cooperative sector has witnessed drying out of funding.

Laws governing cooperative societies

• The 97^th amendment to the Constitution, 2011 inserted Article 19(1) (c) by recognizing the right of the people to form cooperative societies as a fundamental right.
• It also added a new Article 43B in the DPSPs for the promotion of cooperative societies and Part IXB regarding the cooperatives working in India.
• Like agriculture, Cooperative Societies is in the state list.
• A majority of the cooperative societies are governed by laws in their respective states, with a Cooperation Commissioner and the Registrar of Societies as their governing office.
• The Central Registrar of Societies is their controlling authority, but on the ground the State Registrar takes actions on his behalf.