Cooperative Movement in India: Meaning, Objectives, Characteristics and Causes

Introduction

The cooperative movement in India refers to the voluntary association of individuals who come together to meet their common economic, social, and cultural needs through a jointly owned and democratically controlled enterprise. Cooperative societies play a crucial role in India’s development, particularly in agriculture, banking, and housing sectors.

These societies mainly help poor, illiterate, and unskilled people by providing financial and social support. The cooperative movement has strengthened rural communities and increased participation in economic activities. It has also contributed to improving living standards and promoting democratic values in society.

Objectives of Cooperative Societies

The main objectives of cooperative societies are:

1. To sell products and services efficiently.

2. To eliminate the unnecessary profits of middlemen in trade and commerce.

3. To prevent exploitation of weaker sections of society.

4. To protect the rights of both producers and consumers.

5. To promote mutual respect, cooperation, and education among members and the wider public.

Characteristics of Cooperative Societies

Cooperative societies have several important features:

1. Voluntary Formation and Participation

Membership in a cooperative society is voluntary. Individuals are free to join or leave without restrictions. The process of joining is simple and generally cost-effective.

2. Professional Management

Cooperatives are expected to function honestly and efficiently. Regular audits are conducted, and they are regulated by a central registrar to ensure transparency and accountability.

3. Reduced Financial Risk

Most cooperatives operate on a cash and direct transaction basis, which minimizes financial risk. Except for banking cooperatives, credit facilities are limited, protecting members from heavy losses.

4. Community Support Objective

The primary goal of cooperative societies is to assist individuals in difficult financial situations and strengthen community ties through mutual support.

5. Independent Legal Body

A registered cooperative society is recognized as a separate legal entity. It has the authority to make decisions in the best interests of its members.

6. Distribution of Profits

Profits or surplus earnings are fairly distributed among members according to their shares.

7. Democratic Control (One Member, One Vote)

Cooperatives operate on democratic principles. Each member has equal voting rights, and management committees are elected by the members.

8. Mutual Benefit

Cooperatives benefit people with middle and low incomes by promoting mutual trust and cooperation, helping them achieve better economic outcomes.

Significance of Cooperatives in India

Cooperative societies are important in India because:

1. They support poor, illiterate, and unskilled people.

2. They promote mutual help and resource sharing.

3. They reduce class conflicts and social inequalities.

4. They help control bureaucratic and political problems.

5. They support agricultural development.

6. They create a favorable environment for small and cottage industries.

Causes of the Cooperative Movement in India

The cooperative movement in India developed due to several social and economic pressures during the late nineteenth century:

1. Impact of the Industrial Revolution

 Many people turned to agriculture for livelihood, increasing pressure on the agricultural sector.

2. Subdivision of Land Holdings

Fragmentation of land made farming less profitable and inefficient.

3. Economic Hardships

Rigid land revenue systems and uncertain rainfall forced farmers to depend on moneylenders for financial support.

4. Exploitation by Moneylenders

Moneylenders exploited farmers and caused their economic humiliation. They advanced small amounts of money either by purchasing crops at throwaway prices or by charging very high rates of interest.

5. Need for an Alternative Agency

These difficult situations created the need for an alternative agency to protect farmers and provide fair and reliable financial support.

Issues Faced By Cooperatives 

Some of the major challenges faced by cooperative societies in India are listed below: 

● Cooperatives are under State subject in the indian constitution. State Cooperatives law and its implementation widely differ. 

● The role of the board in Cooperatives need strictness in authority and responsibility. Ultimately inconvenience is faced by the public.

● Policymakers and the public at large lack the recognition of Cooperatives as economic institutes. It results in inability of retaining professionals.

● Lack of awareness among people is also considered one of the issues faced by Cooperatives. People are not aware if it's functions, rules, regulations.

Successful Cooperative Societies In India 

1. Banking Sector : Punjab and Maharashtra Cooperative Bank (PMC), Saraswat Cooperative Bank, Bharat Cooperative Bank.

2. Agriculture Sector : AMUL, National Inc Cooperative Development Cooperation (NCDC), Cooperative Rural Development Trust (CORDET), National Agriculture Cooperative Marketing Federation of India (NAFED), Indian Farmers Fertilizers Cooperatives Limited (IFFCO).

Conclusion

The cooperative movement in India has played a significant role in strengthening rural and urban communities. By promoting mutual cooperation, economic equality, and democratic participation, cooperative societies continue to contribute to national development. They remain an essential tool for empowering weaker sections of society and ensuring sustainable growth.