[Kurukshetra January 2023 Summary] [Cooperation, Cooperatives] Realising Sahkar Se Samriddhi – Explained, pointwise

Introduction

Cooperation has remained the philosophy of our nation for centuries. India strives for a cooperative-led all encompassing socioeconomic progress. The Cooperative sector has always played a significant role in the overall economic development of the country with its member driven and all-inclusive approach. Cooperation embodies two important principles of human civilisation: ‘Sah‘ and ‘Karya‘ which means accomplishment of outcome-oriented activities following an all-inclusive method. It has the required capability to ensure equitable and concerted efforts towards enhancing the flow of timely, adequate and door-step commodity and service supports to various critical infrastructure such as agriculture and industrial input services, irrigation, marketing, processing and community storages, etc., and also for other activities such as poultry, fisheries, horticulture, dairy, textiles, consumer, housing, health etc.

Cooperatives are universally accepted as an essential instrument of social and economic policy and have inherent advantages in strengthening the efforts leading to overall economic prosperity with enhanced livelihood security and employment. These have immense potential to deliver required goods and services at the grass-roots and to ensure a sustainable and quality growth environment. Cooperatives are governed by Seven Golden Principles.

Creation of a New Ministry

India has a rich history of cooperatives. Sardar Vallabhbhai Patel used to follow the basic ideology of cooperation while solving various critical problems on the ground. He sowed the seeds of Anand Milk Union Limited (Amul) through Shri Tribhuvandas Patel by forming farmer cooperatives, production and marketing of milk through collectivised efforts. Amul has now become a global dairy brand.

The freedom movement tried to create a new economic model against the British government in some places with cooperation. The Cooperative Movement spread across the country after independence, especially with Sardar Patel’s help. However, the Cooperative Movement stagnated around the 1960-70s. Also, the growth of the cooperative sector across the States was not uniform which led to high concentration of cooperatives in some areas.

National Cooperative Union of India (NCUI) 2018 data indicates that there are 8.54 lakh cooperative units spread across 739 districts. On an average, there are 1,156 cooperative units per district. Seven States viz. Maharashtra, Gujarat, Andra Pradesh, Telangana, Karnataka, West Bengal and Kerala have more than the national average cooperative spread. States viz. Bihar, Jharkhand, Uttar Pradesh, Madhya Pradesh, Assam, Chhattisgarh and Odisha record below national average spread of cooperatives. This opens up opportunities for these States to realise the power of collectives. Cooperatives can help to gear up activities of rapid social mobilisation through registration of diversified activity-based cooperatives. This can actualise the collective socioeconomic benefits right at the community and to be an active catalyst in achieving the greater goal of Sahkar Se Samriddhi.

In July 2021, India’s first Ministry of Cooperation was set up to help the cooperative movement grow and spread across the country. The objective of Ministry of Cooperation is to provide a supportive and enabling policy framework to cooperatives. Cooperation has been central to work in all major economic sectors. The cooperatives have also created an economic model for rural development and provided dignified jobs for the poor.

Ensuring Equitable Spread and Outreach

The Mission ‘Sahkar Se Samridhi‘ seeks to ensure equitable and widespread cooperative growth. The initial efforts should be made to ensure that every village in India has a primary society, a primary cooperative credit society, and is linked to a nearby cooperative bank. Cooperatives should have a broader reach whenever possible, and they should be promoted, formed, and nurtured wherever there is potential. There is a significant opportunity to promote a greater number of cooperatives in sectors such as fishing, agricultural processing, primary production, housing, and construction, health, medicine, insurance, and textiles. The cooperative business model has the potential to revitalise the khadi and village industries, as well as to achieve parity in income and employment growth between developed and developing States.

The co-operative movement’s skewed distribution across States makes it possible to classify them as developed, developing, or weak. In the Developed States, the cooperative sector has made some progress but there is scope of improvement to address some inherent disadvantages. Developing States have stopped the deterioration of cooperatives but need more policy support to move forward. In Weak States the presence of cooperatives is negligible and most institutions are weak. Odisha, Jharkhand, Bihar, Uttarakhand, Assam, and others need to expand their cooperative base and analyse their past growth models and activities to maximise social and economic welfare.

In this context, the Government should affirm concentrated efforts to deepen the mass movement. The Government’s efforts should help cooperatives boost the nation’s economy over the next two decades. Only cooperatives can benefit all members. Cooperative business models allow shareholders to receive the most surplus profits with the least management cost.

Cooperation and Economic Empowerment

The Cooperative model can boost economic growth and prosperity for economically disadvantaged groups. Lijjat Papad, Amul, and other milk cooperatives in southern states like Karnataka and others have helped millions of marginalised people. Late Shri Tribhuvandas Patel’s dairy society, Amul, has changed millions of women’s lives. Through Amul, INR 60,000 crores are remitted directly to the bank accounts of the women dairy farmers thus empowering them.

Venturing New Areas Through Cooperation

There is a need to ensure the formation of a large number of cooperatives in new and emerging sectors such as insurance, health, tourism, processing, storage, industrial and service sectors etc. The Prime Minister has urged all Ministries to set goals for themselves in the Amrit Mahotsav year. The Ministry of Cooperative should set a goal of having a viable and functional milk society and credit society in every village within the next 10 years.

If India can achieve this, these units will be able to significantly contribute to the national economy while also improving the lives of millions of poor and marginalised people who are frequently left behind.

Meeting Challenges for Effective Cooperation

While cooperatives are the best route to address empowerment issues, these units should be prepared for the meeting modern-day challenges.

The bottlenecks of growth within the sector have to be addressed and this would demand several policy level and administrative changes. The first and foremost in this regard is fostering a culture of transparency. This will restore the trust of small farmers in cooperatives.

There is a need to adhere to the law and cooperative principles to strengthen the cooperatives. This also calls for holding fair and regular elections.

There is a need to abide by the democratic values to ensure that the best people are inducted to the cooperative platform. The democratic ways and means in conducting cooperative activities like elections need to be implemented more strongly, firmly and rigorously.

The cooperatives sector needs to move towards professionalism and should conduct itself on the principle of corporate governance. There are many such models in our country like IFFCO, Amul etc. which have kept the cooperative spirit intact and imbibed the strengths of corporate governance values.

There is need to build such models which conform to a judicious blend of cooperative values and corporate governance. This will ensure transparency, accountability, professionalism and sound governance.

The cooperative institutions need better infrastructure and access to business loan and working capital and for meeting their plant and machinery needs.

Cooperative Federalism – the Only Way

The provisions in the current constitutional framework facilitate promotion and nurturing of cooperatives in an all-inclusive way. ‘Cooperation’ is a State Subject, and State Cooperative Societies are governed by State legislation. The Union Government is in charge of managing Multi-State Cooperatives.

India can accomplish a lot through constructive and continuous dialogue between the Centre and the States, and can instil cooperation principles in the work and actions. Greater uniformity in in cooperative legislation across all States can be achieved through a continuous dialogue and consultation process. It shall be the Ministry of Cooperation’s responsibility to engage in such dialogues, discussions, and deliberations with States and to develop an enabling legal framework for cooperatives.

The Union Government must play an enabling role to transform the cooperative movement. The jurisdiction of both the Centre and the States must remain clear and consistent with the fundamentals of the Constitution.

Planning New Cooperation Policy

India has 8.5 lakh cooperative units out of which 20% [1.77 lakh units] are credit cooperatives. Remaining 80% are non-credit cooperatives involved in diverse activities viz. Fishery, Dairy, Producer. Processing,Consumer, Industrial, Marketing, Tourism, Hospital, Housing, Transport, Labour, Farming, Service, Livestock, Multi-purpose Cooperatives, etc.

Out of about 96,000 Primary Agricultural Credit Cooperatives (PACs) spread across 91% of total villages of India, 63,000 [65%] are viable and active. Technology development in cooperatives is the need of the hour. Computerisation of PACs is a must.

About 13 crore farmer households are directly connected to cooperatives. It shows the strength of the cooperative movement. Government policies can leverage on this huge network of institutions for the benefit of the sector and empower them through suitable schemes, policy support and provision of technology.

The share of cooperative agriculture finance to total is about 25%, fertiliser distribution 35%, fertiliser production 25%, sugar production 31%, milk procurement, production and marketing about 25%, wheat procurement 13%, paddy 20%, fish production 21% etc.

There is a need to build a vibrant and resilient cooperative sector on this strong foundation. All the hurdles and bottlenecks need to be addressed through the new cooperation policy and suitable government interventions. Important policy parameters [4 Ps + 3 Es] for attaining Sahkar Se Samridhi are shown below.

Source: Kurukshetra January 2023.

Dimensions of New Cooperation Policy

The National Cooperative Policy has been in effect for 20 years and time has come to review the Policy. The Ministry of Cooperation is expected to finalise a new cooperation policy within 8-9 months. The policy should take into account the requirements of all cooperative societies, from the PACs to Apex Cooperatives. The policy should help cooperatives grow in novel ways. There is a need to work in cooperative manner with TEAM Spirit (“T” – “Transparency,” “E” – “Empowerment,” “A” – “Aatma Nirbhar” (‘Self-reliance,’ “M” – “Modernization”). To improve efficiency, Government must now computerise the entire cooperative sector.

The possible dimensions of the new cooperation policy could be the following: (a) Laying out processes for hassle-free registration; (b) Bringing in transparency within administration, recruitment and also within training of trainers and training of employees; (c) Ensuring transparency in cooperative elections; (d) Addressing issues of cooperation and coordination amongst different cooperative institutions; (e) Establishing proper linkages to all societies at village level like dairy, PACs, FPO, women cooperative etc.; (f) Bringing in uniformity and parity of cooperative law within the States.

Road Ahead

The clarion call by the Prime Minister ‘Sahkar Se Samridhi‘ requires quick, time-bound and an all-inclusive consultative action. There exists a need to identify and address suitably various issues which may limit the progress of cooperatives. Some of the vital issues which require immediate attention are: (a) Regional/State level and sectoral imbalances in the cooperative movement; (b) Regulatory complexities; (c) Governance, leadership and operational issues; (d) Lack of professional management in cooperative units; (e) Need of time-tested structural reform measures; (f) Lack of cooperation amongst cooperatives etc.

Other critical dimensions of cooperative movement which require adequate attention are: (a) Establishing an effective dialogue and coordination mechanism between the Central Registrar and State Registrars of Cooperatives; (b) Adhering to cooperative principles and democratic values, procedures of transparency, strengthening basic infrastructure including equity structure, diversification; promoting entrepreneurship, branding, marketing, and adopting technology, training, exchange of education and training of members; (c) Formation and promotion of new cooperative societies and promotion of social cooperatives. .

Cooperatives will multiply the vision of a US$ 5 trillion Indian economy and enhancing farmer income. To make it happen, India must first empower and revive community-level primary cooperatives. PACs must be made active and vibrant. While the Ministry of Cooperation plans to computerise PACs and increase technology in the cooperative sector, the new cooperation policy should aim to reach every village with PACs. Cooperation policy should aim to strengthen the village and double cooperative members’ income. The Policy should also make all cooperative institutions financially stable.

Conclusion

Expanding reach of cooperatives may seem difficult but is attainable. This won’t be achieved only by the Union Government and State Governments’ noble intentions and interventions alone. There is a need to draw inspirations from the Maha Upanishad’s Vasudhaiva Kutumbakam, meaning all living beings on this earth are a family. The leaders of the cooperative movement and the federal heads will have to rise to the occasion, make extra efforts to visit their districts, talk to members and infuse hope in them for the betterment of the sector. These cumulative efforts would bring all of stakeholders closer to achieving the goal of ‘Sahkar Se Samridhi‘.

Syllabus: GS II, Welfare schemes for vulnerable sections of the population by the Centre and States.

Source: Kurukshetra January 2023