Co-operatives – A Boon in India

CO-OPERATIVES: A BOON IN INDIA

  Co-operatives pursue multiple, i.e. economic and social, goals and their members participate in decision-making. In an ILO-study identified several characteristics of the cooperative structure: discretionary power of the members, open communication, management suggests rather than instructs, risk and uncertainty are divided, motivational potential.

In India, cooperatives are numerous and an important part of the national development strategy. As such these cooperatives are embedded in an institutional environment. In the five-year development plans the central government paid considerable attention to the cooperative movement and incentives to promote it. In fact, it was considered as the basis of planned growth and social development.

In 1997 32.9% of the employment in the organised sector was in the cooperative sector, whereas the public sector employed 46.5% and the private sector only 20.6% (Vision 2005).

  Co-operatives have to face global market competition as well as other enterprises have to. The institutional embeddedness should not interfere with the sustainable competitiveness of the cooperatives. However, as tools in the development process of the country, cooperatives deserve support.

The cooperatives in India have made remarkable progress in the various segments of Indian Economy. There are 5.03 lakh cooperative societies with a membership of more than 20.9 crores and working capital of more than Rs.227111.8 crores. In many segment of Indian economy, cooperatives are contributing predominant role in the credit sector despite of keen competition from nationalized and private sector banks. Cooperatives are disbursing nearly 46% of total agricultural credit. They are distributing 36% of total fertilizers in the country. The share of cooperatives in sugar production is nearly 55%, in spindlege 10%, in yarn production 22.1% and in coverage of handlooms 55%. The cooperatives are playing a very important role in the public distribution system to serve the weaker sections of the community. Nearly 28% of the rural fair price shops are within the cooperative fold. Cooperatives have also played an effective role in exports. The economic reforms which have been introduced since 1991 have given new dimensions to precepts and practices of economic development.

The co-operatives sector in India has many advantages. It has added a lot to different sections of the society. Basically, the advantages can be divided into three parts, i.e. Economic, Social & Educational.

The Economic Advantage

The economic benefits, which flow from the co-operative actions, are as follows:

1. Service to the relatively weaker sections of society with due emphasis on the satisfaction of human needs through appropriate production activities and at lowest cost possible.
2. A more egalitarian distribution of wealth and income.
3. Protection of consumers from monopoles and other forms of centralized combinations
4. Higher wages and improved receipts for the working member communities of the organization.
5. Institution of a more economic and efficient distribution system, eliminating the exploitative middlemen, avoiding unproductive overlapping activities, and eliminating fraudulent practices such as higher costs, short weights and adulterated goods.
6. More purposeful and publicized practices in business management and operations
7. Contribution to stabilization of costs, prices and incomes for the benefits of the members covered.
8. More meaningful generation of employment principles with fair terms to workers in the organization, providing at the same time, opportunities for self-development and progress.

The Social Advantage

A co-operative is basically a socio-economic organization with a constructive attitude towards the community. Since, the relatively poor section of the community form the majority, the economic benefits of the co-operative movement meant for them are bound to develop social benefits. In totality, the co-operative actions contribute to a richer and happier social environment.

Whether the society is capitalistic or socialistic, modern life has brought in its wake a variety of tensions. A co-operative organization functioning in true spirit can help to reduce these tensions as the people are enabled to work in unison and under equal conditions. The social dimensions of co-operation would appear to be diverse and full of potential. In a way, they extend to the functioning of democracy through its insistence on education and widely distributed authority among the fellow members of the organization.

Co-operation is concerned with the social peace and stability as evidenced and seen by its approach to the generation of employment opportunities and adoption of moral and equitable policy towards all, in respect of the dealings in trade and investment decisions.

The term ‘co-operative commonwealth’ though vague in its connotation, emphasizes service as the central theme. It envisages minimizing of conflict between the co-operative enterprises and the community as well as between the employers and the employees. In the process, it aims at a social change that will ensure the optimization of economic welfare. The concept seeks to achieve a synthesis of a free enterprise and socialization.

The Educational Advantage

Due emphasis has been placed on educational efforts by the co-operatives vis-à-vis their members to facilitate the accomplishment of ideals of the socio-economic nature already stated above. Education takes the form of teaching the basic values, that goes onto enrich the life of the members covered by the organization. For immediate, material benefits, the education to members also aims at equipping them better for the pursuit of their day-to-day activities in a more efficient manner.

If the class of the people for which the co-operative movement is intended, is kept in mind, it becomes very clear and obvious that the co-operation and education would have to go hand-in-hand for their upliftment and continued progress and prosperity. Education to the members improves the cultural and economic levels of members and facilitates the smooth functioning of the organization. The continued education progress and programmes organized by the movement will lead to the foundation of better organized and managed co-operatives in the new sectors. Thus, broad-basing the movement.

The achievement of formal objectives of the co-operative movement such as promotion of thrift, self-reliance, participation in business management, limits and commitments, would largely depend upon the educational efforts made by the co-operative organizations.