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“Coming together is a beginning. Keeping together is progress. Working together is a success." --Henry Ford.
Co-operation is working together, with a common goal and in one direction. As per the definition of the International Cooperative Alliance, “Cooperative is 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 cooperatives are the backbone of our economy and have been a significant contributor to the development of the country in all spheres. It even enjoys the status of a fundamental right under Article 19(1) of the constitution of India to enable all the citizens to form cooperatives.
Despite several constraints such as restrictions on areas of operation, limited clients, small scale businesses, lack of transparency, and political intrusions, this movement has been standing for centuries and serving society.
If given the right supportive environment, cooperatives could help in profound ways to achieve social justice, where it is lacking. Maybe the strength and economic power of all of us working in the cooperative sector is less, but being the second most populated country in the world our numbers are so large that if we collect it through cooperatives, then a tremendous force is created, which no one can beat.
The government of India has recently created a separate ministry for cooperation in realizing the PM’s vision of ‘Sahakar se Samriddhi’. Prime Minister has given a mantra, of prosperity from cooperation & the cooperative sector will also give full thrust to fulfil the Prime Minister’s goal which he has set of a US $ 5 trillion economies. The cooperative sector will also exert its full force to fulfil this goal.
SOME POSITIVE ASPECTS OF COOPERATIVE MOVEMENT ARE AS FOLLOWS-
EMERGENCE OF AMUL:
Anand Milk Union Limited (Amul) of Gujrat, a milk product co-operative dairy, was born out of the vision of Sardar Patel.
In 1946, the Britishers made an order for Indian farmers to compulsorily give all their milk production to a private company. There was an agitation against this decision in the Kheda district & Patel said that unless there is a structure to sell milk, the movement against the decision cannot be successful and it was from there that Amul started.
Under the guidance of Sardar Patel, Tribhuvanbhai Patel registered two primary village milk producer societies with 80 farmers and inevitably Amul's group turnover has upshot Rs. 53 thousand crores in the year 2020-21 and now 36 lakh farmer families are associated with it and in each village, there are around 200 milk producers, who are mainly women. What Amul has done can’t be done by a corporate dairy also. The co-operative has grown from strength to strength at a rate of almost 10 per cent, while the world is growing at three to four per cent, in terms of milk production.
Amul is a story of hope, empowerment and of how cooperation can transform the lives of thousands of people and create an entire movement.
ADVENT OF LIJJAT PAPAD- A STORY OF WOMEN EMPOWERMENT:
Lijjat Papad's story is a perfect example of how the cooperative movement can lead to scalable business?
The emergence of the Lijjat papad is a muse for every household brand. It was started in the year 1959 by Smt. Jaswantiben Popat with a group of seven South Mumbai women at an operational cost of Rs. 80 and made a profit of 50 paise. They kept on increasing their manpower (which included only women). Ensuingly, the co-operative had in the year 2019 spread its legs to 82 branches in 17 states of India and has intertwined more than Rs.1,600 crore business with the exports of Rs.80 crore.
Today around 45,000 women are associated with Lijjat's cooperative movement and this success story is an inspiration for women across the country. It has become the household name in India and has emboldened the housewives to use their cooking skills and become the owner of an organization.
Octogenarian Jaswantiben Jamnadas Popat is the co-founder of Lijjat Papad Company. If she had wanted, she would have become the owner of the billion-dollar company. But, she had set her heart on empowering the women and helping them earn respect for themselves in society.
INDIAN FARMERS FERTILIZERS COOPERATIVE (IFFCO)- A SUCCESS STORY:
Have you heard about this society before? Two decades ago, the Indian Farmers Fertilizer Cooperative was only the germ of an idea. Even today, the largest cooperative enterprise in the country is virtually unknown outside fertilizer circles.
Despite being among the youngest fertilizer outfits in the country, IFFCO and its offspring, the Krishak Bharati Cooperative (KRIBHCO), now accounts for a quarter of India's total fertilizer production straddling a giant industry like colossuses. Where others in the fertilizer industry - in both the private and public sectors - have either floundered or chugged along at a sober pace, IFFCO has led the field with record production levels, unprecedented profits and a blistering pace of expansion: the six-year-old KRIBHCO now promises to follow suit after having commissioned its first plant four months ago.
IFFCO toiled to give a new direction to the Green Revolution in the country. A society formed in 1967 with 57 cooperatives has today shot up by making more than 36,000 cooperative members and by distributing their dividend to about 5.5 crore farmers. When a giant company earns money, then its biggest share goes to its owner, but distinctly what IFFCO earns, every penny goes to the homes of thousands of farmers and this is called cooperative. Similarly, KRIBHCO is also a consortium of 9,500 societies and its share capital is about Rs. 388 crore and KRIBHCO has paid a dividend of Rs.2,118 crore to shareholders in one year.
But much still remains to be done as the cooperative can contribute to the field of seeds and there should be no need to import seeds.
This list of success stories is very long and they have incredibly contributed to the economy and development of the country by collecting capital from small people through the cooperative movement and all the profits go to the homes of small investors.
SIGNIFICANCE OF COOPERATIVES IN INDIA:
As per the PIB report, today, there are about 91% of villages in the country, where some cooperative organization works, which is not the case anywhere else in the world. There are more than 8,55,000 registered cooperative societies and more than eight and a half lakh credit cooperatives, the number of non-lending cooperatives is more than 60 lakh, there are more than 17 national level cooperative unions, 33 are state-level cooperative banks, there are 363 district-level cooperative banks.
29% of agricultural credit distribution goes through a cooperative system, 35% of fertilizer distribution is done by cooperative, about 30% produce manure, 31% of sugar is produced by government cooperative mills, 20% of milk is produced and procured, procurement of 13% of wheat, 20 per cent of paddy procured by cooperatives and 21% in the fisheries sector.
LAWS GOVERNING THE CO-OPERATIVES:
There has been a lot of controversy upon the setting up of the central ministry for co-operations as the Co-operative is the State subject under entry 32 of the state list under the VII Schedule of the constitution and a majority of the cooperative is governed by their respective state authorities and laws. Some suspect that this move is aimed at weakening the grip of opposition parties on cooperatives in key states such as Maharashtra.
Article 19(1)(c) under Part III of the Constitution allows all the citizens to form cooperatives by elevating it to the status of a fundamental right.
In the year 2002, The Multi-State Cooperative Act was enacted to enable the registration of societies with multiple state operations which mainly included banks, dairies, sugar mills etc which was controlled by the Central Registrar of Societies.
The National Cooperative Development Corporation (NCDC) was established to promote the cooperative movement in India. It is tasked with planning, promoting, coordinating and financing cooperative development programs at the national level. Also, it provides financial, insurance and technical support to cooperative institutions of farmers and other weaker sections.
ADVANCEMENT OF COOPERATIVES IN COMING YEARS:
Transparency- transparency has to be brought in training, skill development, recruitment and elections to take the cooperative forward or else we will be outdated.
Creation of a central database and common service centre.
Ease of doing business- the ministry should bring relevant and necessary reforms in its policies to make it easier for the cooperatives to do the business right from its inception to winding up.
Tax and financial incentives- GOI shall identify the areas where cooperatives-based business enterprises can be made, provide capital and technical assistance, and give sufficient tax incentives to encourage the formation of cooperatives. The role of credit societies should be further strengthened so that even the smallest person can get credit.
Women empowerment- Focus should also be on women cooperatives as they are less than 3% of the 8 lakh cooperatives in the country.
Skill Development- cooperative training shall be further intensified and arrangements should be made for skill development.
The goal should be that every common person shall be a part of the process of development, every house should prosper through cooperation and the country should prosper through the prosperity of every family. There should be equitable development, all-encompassing development, and all-inclusive development, and the development model should have the power to touch all.
Article By: Ms Shivangi Dhanuka, Legal Associate at Bhavya Sharma and Associates located in Delhi. In case you need any assistance for corporate law compliances or advisory related services, contact us at legal@bhavyasharmaandassociates.com or for more details you can visit: www.bhavyasharmaandassociates.com
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