- GS Paper 2: Indian Constitution – Structure, organization and functioning of the Executive and the Judiciary Ministries and Departments of the Government.
- Recently, a separate Ministry of Cooperation was created by the Government of India for realizing the vision of ‘Sahkar se Samriddhi’.
- An announcement for such a move was made in the union budget 2021 which proposed to set up a separate administrative structure for cooperatives.
- Definition: International Labour Organisation (ILO) defines cooperatives as an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.
- The United Nations General Assembly had declared the year 2012 as the International Year of Cooperatives.
- Categories of cooperatives: There are many types of cooperatives Society but can be classified broadly in two types, especially in the agriculture sector.
- Producer cooperatives: seek to obtain the highest possible value for the goods and services supplied by farmers, fisherfolk, artisans, or laborers.
- Consumer cooperatives: provide inputs (fertilizer, seed, credit, etc), groceries, housing, health, and other services at the most economic rates to their members.
Legal provisions related to Cooperatives in India
- It is a state subject under entry 32 of the State list under Schedule 7 of the Constitution.
- Cooperatives having a presence in a single state: are governed by laws in their respective states, with a Cooperation Commissioner and the Registrar of Societies as their governing office.
- Multi-State Cooperative Societies Act, 2002: enacted by the parliament to govern societies with operations in more than one state.
- The Central Registrar of Societies is their controlling authority, but on the ground, the State Registrar takes action on his behalf.
- Formation of the National Cooperative Development Corporation (NCDC): works for the promotion of the cooperative movement in India. Its main functions include-
- Planning, promoting, coordinating, and financing cooperative development programs at the national level.
- It provides financial, insurance, and technical support to cooperative institutions of farmers and other weaker sections.
Constitution provisions regarding the cooperatives
- The Constitution (97th Amendment) Act, 2011 added a new “Part IXB” right after Part IXA (Municipals) regarding the cooperatives working in India.
- Article 19(1)(c) under Part III of the Constitution: provides for “cooperatives”, allowing all the citizens to form cooperatives by giving elevating it to the status of a fundamental right.
- Article 43B was added in the Directive Principles of State Policy (Part IV) regarding the “promotion of cooperative societies”.
Key objectives of the newly formed cooperation ministry
- To provide a separate administrative, legal, and policy framework for strengthening the cooperative movement in the country.
- To make the cooperative movement a true people-based movement by helping it reach the grassroots level.
- To streamline processes for ease of doing business for cooperatives and enable the development of multi-state cooperatives (MSCS).
Benefits of a dedicated Cooperation Ministry
- Help in expanding the reach of the cooperatives: Presently, the cooperative structure has managed to flourish and leave its mark only in a handful of states like Maharashtra, Gujarat, Karnataka, etc.
- Under the new Ministry, the cooperative movement would get the required financial and legal power needed to penetrate into other states also.
- Strengthen cooperative funding structure: Cooperative institutions get capital from the Centre, either as equity or as working capital, for which the state governments stand guarantee.
- Under the new Ministry, the cooperative funding structure would be able to get a new lease of life.
- The dedicated ministry will correct the present administrative anomaly: previously cooperatives were under agriculture ministry which is not designed to focus on the specific needs of the cooperatives. This resulted in poor focus and development of the cooperatives in India.
- A separate ministry would effectively cater to the needs of the evolving cooperatives: Most new registrations for co-operatives are not in the agriculture sector and now coming up in sectors like housing and labor.
Associated concerns with the separate ministry
- Centralization of power: “cooperatives” are state subject under the constitution and many states believe that the formation of a separate ministry will concentrate powers in the hands of the Centre.
- Compromises the principle of federalism: as many believed that it is yet another attempt by the central government to gain control over grassroots institutions, especially in Opposition-ruled states.
- Ensure Ease of Doing business for the cooperatives: Ministry of Cooperation should make it easier for cooperatives to do business, right from registration to winding up.
- Cooperation with states: to ensure compatible legislation with the requirements of a modern market economy and effective implementation of various measures on the ground.
- Unified regulation: by providing for a single regulator for all the cooperative societies.
- Facilitating women-led cooperatives: to ensure all-around development of the society. Currently, they constitute less than 3% of the 8 lakh cooperatives in the country.