Important Characteristics of the Co-operative movement in India


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Important Characteristics of the Co-operative movement in India

 

1. Historically, Governments and policy makers have paid more attention to agricultural cooperatives and thus, the growth and development of the Indian cooperative movement is heavily tilted in favour of agricultural cooperatives in general and in particular, credit cooperatives. In some areas like dairy, urban banking and sugar, the cooperatives have achieved success to an extent but there are larger areas where they have not been so successful.

 

2. The cooperative credit movement in modern India, curiously, is a state initiated movement. The state partnership is, perhaps, the unique feature of the Indian cooperative movement. As of today, Government contribution to the share capital of primary agricultural cooperatives accounts for about 7.5 percent of the total.

 

3. Paradoxically, the state partnership which was conceived as a measure for strengthening the cooperative institutions had paved the way for ever-increasing state control over cooperatives, their increasing officialization and politicization culminating in virtually depriving the cooperatives of their vitality as well as their democratic and autonomous character.

 

4. Dormant membership, lack of active participation of the members in the management, lack of professionalism (and absence of corporate governance), undue political and bureaucratic intervention, have made majority of the cooperatives at the primary level almost moribund. Understandably, this has resulted in weakening of the cooperative edifice. The upwardly transmission of the weaknesses of the primary societies have affected the capabilities of the higher level cooperative federations in so far as their usefulness to the former is concerned.

 

5. With regard to agricultural cooperative credit structure, although the quantitative expansion has been somewhat satisfactory, the movement continues to suffer from structural defects and operational deficiencies. The acknowledged operational deficiencies of the cooperative credit structure have been (I) weak recycling of credit, (ii) poor resource mobilization, (iii) ineffective lending and (iv) poor recovery.

 

6. The agricultural credit cooperative system in general has become rather over dependent on external support in terms of participation in share capital by Government and refinance from Government owned Financial Institutions.


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