Explanation: The 97th Constitutional Amendment Act of 2011 gave a constitutional status and protection to co-operative societies.

This changed the following sections of the constitution –

• It made the right to form co-operative societies a fundamental right (Article 19).
• It added the words “or co-operative societies” after the word “or unions” in Article 19 (l) (c).
• It included a new Directive Principle of State Policy on promotion of co-operative societies (Article 43-B).
• It added a new Part IX-B in the Constitution which is entitled ‘The Co-operative Societies’ (Articles 243-ZH to 243-ZT).

The amendment objective is to encourage economic activities of co-operatives. This will help in progress of rural India.

Article 43 B states that there should efforts of state to promote voluntary formation, autonomous functioning, democratic control and professional management of co-operative societies.

Incorporation of Co-operative Societies – The state legislature may make provisions for the incorporation, regulation and winding-up of co-operative societies based on the principles of voluntary formation, democratic member-control, member-economic participation and autonomous functioning.

Number and Term of Members of Board and its Office Bearers –

• The board shall consist of such number of directors as may be provided by the State Legislature.
• But, the maximum number of directors of a co-operative society shall not exceed 21.
• The State Legislature shall provide for the reservation of one seat for the Scheduled Castes or the Scheduled Tribes and two seats for women on the board of every co-operative society having members from such a category of persons.
• The term of office of elected members of the board and its office bearers shall be five years from the date of election.
• The State Legislature shall make provisions for co-option of persons having experience in the field of banking, management, finance or specialization in any other related field, as members of the board.
• But, the number of such co-opted members shall not exceed two (in addition to 21 directors).
• Also, the co-opted members shall not have the right to vote in any election of the co-operative society or be eligible to be elected as office bearers of the board.
• The functional directors of a co-operative society shall also be the members of the board and such members shall be excluded for the purpose of counting the total number of directors (that is, 21).

Source: Laxmikanth