Cooperatives In India

Evolution of Cooperatives in India

In India, the beginning of cooperatives is linked to the Nidhi’s, the cooperative undertaking in the form of indigenous nidhis or mutual loan association grew in the Provinces of Madras, in the second half of 19th century. These were quite similar to Raiffeisen credit cooperatives which were originated in Germany. The German pioneer, F.W.Raiffeisen established a cooperative credit society in which borrowing farmers themselves were members.

Nicholson a British Officer in India suggested to introduce Raiffesen model of German agricultural credit cooperatives in India. As a follow- up of that recommendation, the first Cooperative Society Act of 1904 was enacted to enable formation of “agricultural credit cooperatives” in villages in India under Government sponsorship.

Cooperatives were formally introduced in India through the Cooperative Credit Societies Law enacted by. the British Government in 1904 with a view to provide relief to Indian peasants from the clutches of money lenders.


History of Laws on Cooperatives in India

  • 1904: The first Cooperative Credit Societies Act was enacted. It was passed on 25th March 1904.
  • 1912: A more comprehensive legislation called the Cooperative Societies Act was enacted. This Act provided for the creation of the post of registrar of cooperative societies and registration of cooperative societies for various purposes and audit. 
  • 1919: Under the Montague- Chelmsford Reforms of 1919 cooperatives became a provincial subject and provinces were authorized to make their own cooperative laws.
  • 1929: The National Cooperative Union of India (NCUl) was established as an apex promotional organisation for promoting and strengthening of cooperative sector.
  • 1935: Under the Government of India Act 1935 cooperatives were treated as a provincial subject.
  • 1942: The Multi-Unit Cooperative Societies Act was passed by the British India to cover the cooperatives that have members in more than one State.
  • 1945: The government appointed the cooperative planning committee to draw up a plan of cooperative development in the country. The committee, which was presided over by R.G. Saraiya, fixed an overall target of bringing 50% of the villages and 30% of the rural population within the scope of the movement in a period of ten years.
  • 1984: The Multi- State Cooperative Societies Act 1942 which was subsequently replaced by the Multi-State Cooperative Societies Act 1984.
  • 2002: The Multi-State Cooperative Societies Act 1984 was amended and enacted as Multi-State Cooperative Societies Act of 2002. The Law provided greater autonomy to cooperatives in their decision-making process. The Law also reduced the powers of the Central Registrar and enabled the cooperatives to operate more freely. Nomination of government representatives on the Boards was also reduced.

Cooperation is a State subject.


Structure of Cooperatives in India

There are two structures of cooperative system in India, one, the governmental cooperative system and, the other, the Cooperative Movement structure consisting of its members also known as ‘non-official’ system. The government system is the creation of cooperative law, while that of the Movement is the evolutionary process.

There are 14 national level cooperative societies in India and have a union named National cooperative union of India.

Types of Cooperatives:

The various types of cooperatives in India include:

  • Consumers’ Co-operative Societies.
  • Producers’ Co-operative Societies.
    • Sugar Cooperative
    • Horticulture Cooperative
    • Fisheries Cooperatives
  • Marketing Co-operative
  • Housing Co-operative
  • Co-operative Credit Societies.
  • Co-operative Farming Societies

The definition of a Cooperative, as adopted by the International Cooperative Congress in 1995, and now universally-accepted, reads as under: “A 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.”

Definition of Cooperative
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