Wednesday, February 19, 2025

Sahkar Se Samruddhi: The Journey of Cooperative Success in India

Introduction

The phrase “Sahkar Se Samruddhi”, translating to “Prosperity through Cooperation,” aptly describes the role of cooperatives in shaping India’s socio-economic landscape. From modest beginnings during the colonial era, the cooperative movement in India has grown into a formidable force, empowering communities, driving rural development, and ensuring economic inclusion.

This article explores the history of cooperatives in India, their diverse types, their significant role in socio-economic progress, and heartwarming success stories of individuals who benefited from this transformative journey. The establishment of the Ministry of Cooperation further underscores the government’s commitment to amplifying this movement.

History of Cooperatives in India

The Early Roots of Cooperatives

The seeds of the cooperative movement in India were sown during British rule to address the challenges faced by Indian farmers. The Cooperative Credit Societies Act of 1904 was the first legislative framework, allowing farmers to access affordable credit. This initiative reduced dependence on moneylenders, who often exploited farmers with high interest rates.

By 1912, the law expanded to include non-credit cooperatives, setting the stage for a broader application across various sectors like housing, consumer goods, and agriculture.

Post-Independence Expansion

After India gained independence in 1947, cooperatives became a cornerstone of nation-building. Recognizing their potential, the government included them in the First Five-Year Plan (1951–56), emphasizing their role in agriculture, rural development, and industrial growth. Institutions like the National Cooperative Development Corporation (NCDC) were established to provide financial and technical support to cooperative societies.

Key Milestones

  • 1904: Cooperative Credit Societies Act passed.
  • 1912: Expansion to non-credit cooperatives.
  • 1951: Cooperatives integrated into economic planning.
  • 1982: The establishment of the National Cooperative Development Corporation (NCDC) in 1963 and the National Bank for Agriculture and Rural Development (NABARD) were key milestones in supporting rural credit and cooperative development.
  • 1984: Introduction of the Multi-State Cooperative Societies Act, enabling multi-state operations.
  • The MSCS Amendment Act 2023 and associated rules seek to enhance governance, increase transparency, and implement structural changes within Multi-State Cooperative Societies (MSCS), empowering cooperatives with greater independence.

Types of Cooperatives in India

1. Primary Agricultural Credit Societies (PACS)

PACS form the backbone of India’s cooperative network. They provide credit, storage, and procurement services to farmers, serving as crucial links in agricultural supply chains. With over 63,000 PACS being digitized under a ₹2,516 crore initiative, these cooperatives are becoming more efficient and transparent.

2. Dairy Cooperatives

India’s dairy revolution, spearheaded by Amul, showcases the transformative potential of cooperatives. These organizations empower rural households, especially women, through income generation and self-reliance.

3. Consumer Cooperatives

Consumer cooperatives like Kendriya Bhandar ensure fair trade by offering quality goods at reasonable prices. They bridge the gap between producers and consumers, eliminating middlemen and benefiting both parties.

4. Credit Cooperatives

These cooperatives enhance financial inclusion by providing low-interest loans to underserved communities. Rural credit societies and urban cooperative banks are pivotal examples.

5. Housing Cooperatives

Housing cooperatives cater to the needs of low- and middle-income groups by offering affordable and sustainable housing options, ensuring secure living environments.

Role of Cooperatives in Socio-Economic Development

Employment Generation

Cooperatives are significant employers, providing millions of direct and indirect jobs in sectors like agriculture, textiles, dairy, and banking.

Rural Development

By offering credit, infrastructure, and market access, cooperatives reduce rural-urban migration and stimulate local economies. Initiatives like the Decentralized Grain Storage Plan aim to create rural warehouses, cutting transportation costs and minimizing grain wastage.

Women Empowerment

Organizations like SEWA (Self-Employed Women’s Association) have empowered over 2 million women through microfinance, vocational training, and leadership opportunities.

Success Stories: Transforming Lives through Cooperatives

1. Amul: Revolutionizing Dairy in India

Founded in 1946, Amul played a pivotal role in India’s White Revolution, transforming the country into the largest milk producer globally.

Impact:

  • Empowered 3.6 million farmers.
  • Enhanced rural incomes and livelihoods.
  • Made India self-reliant in dairy production.

2. PACS Digitization and Direct Bank Transfers

The ongoing digitization of PACS has streamlined their operations, enabling farmers to receive subsidies and loans through direct bank transfers. Over 62,000 PACS are being upgraded to provide better financial services.

3. SEWA: Uplifting Marginalized Women

SEWA organizes women into cooperatives, providing financial independence through skill development and entrepreneurship opportunities.

Impact:

  • Over 2 million members across India.
  • Improved the socio-economic status of marginalized women.

Challenges Faced by Cooperatives

Despite their contributions, cooperatives face several hurdles:

  • Financial Constraints: Many cooperatives lack access to sufficient capital.
  • Corruption and Politicization: Mismanagement undermines their credibility.
  • Skill Gaps: A shortage of trained professionals limits operational efficiency.
  • Technology Barriers: The adoption of digital tools remains slow.

Government Policies and Initiatives

The Ministry of Cooperation

The Ministry, established in 2021, aims to modernize cooperatives and align them with contemporary needs. Its initiatives include:

  • PACS as Common Service Centers: Over 30,647 PACS now offer 300+ e-services.
  • Model Bye-Laws: Empower PACS to undertake diverse activities, from storage to retail.
  • Support for New Cooperatives: 9,000 PACS and dairy cooperatives are being established in underserved areas.

The Ministry of Cooperation (MoC) has played a pivotal role in revitalizing the cooperative movement in India. It has spearheaded various schemes and initiatives to create a robust administrative, legal, and policy framework for the sector’s advancement.

A key focus of the MoC is the promotion of Multi-State Cooperative Societies and streamlining procedures to enhance the “Ease of Doing Business” for cooperatives. The Ministry’s efforts are centred on modernizing and strengthening cooperatives, fostering transparency through computerization, and promoting competitiveness. Additionally, there is a strong emphasis on ensuring inclusive development, particularly for underserved rural communities. Through its initiatives, the MoC aims to connect every village to cooperatives, driving economic prosperity under the banner of ‘Sahakar se Samriddhi,’ contributing to the nation’s overall growth.

Key Government Achievements

  • ₹2,516 crore allocated for PACS digitization.
  • Over 1,700 micro-ATMs distributed for doorstep financial services.
  • 35,293 PACS transformed into Pradhan Mantri Kisan Samriddhi Kendras.
  • A plan to create warehouses and agri-infrastructure at PACS level, reducing food grain waste and transportation costs, with 2,000 PACS identified for the pilot project.
  • An MoU with MeitY and NABARD enables 30,647 PACS to offer 300+ e-services to rural citizens.
  • 1,100 additional FPOs will be formed by PACS to improve market linkages for farmers.
  • 240 PACS have applied for retail petrol/diesel outlets, with 39 selected so far.
  • PACS can now apply for LPG distributorships, with 9 applications received from 3 States/UTs.
  • 2,475 PACS have been approved to operate as Janaushadhi Kendras, improving access to generic medicines.
  • Farmers associated with PACS can adopt solar water pumps for irrigation.
  • 1,630 PACS are selected to carry out O&M of rural piped water supply schemes in 14 States/UTs.
  • 1,23,685 RuPay KCCs have been distributed to dairy cooperative members in Gujarat.
  • NCDC has registered 69 FFPOs and is converting 1,000 fisheries cooperatives into FFPOs with an outlay of ₹225.50 Crore.

The Ministry envisions an inclusive, cooperative-driven economic model that reaches every village, strengthening socio-economic bonds across regions.

The Role of Technology in Cooperatives

Digitization Efforts

Technology is reshaping cooperatives, enhancing transparency and efficiency. However, while blockchain is celebrated globally for ensuring secure transactions, its usage among Indian cooperatives is still in nascent stages.

E-Commerce and Fintech

E-commerce platforms and fintech solutions are enabling cooperatives to access broader markets and streamline financial operations.

Future of Cooperatives in India

The future of cooperatives is anchored in diversification, innovation, and inclusivity:

  • Youth Engagement: Encouraging young entrepreneurs to join cooperative ventures.
  • Sustainability: Promoting green and circular economy practices.
  • Global Leadership: Showcasing India’s cooperative model at international forums like the ICA Global Conference.

Conclusion

India’s cooperative movement stands as a testament to the power of collective effort. From addressing rural poverty to fostering socio-economic equity, cooperatives have reshaped countless lives under the guiding principle of “Sahkar Se Samruddhi.” With robust government support, increasing digitization, and active community participation, cooperatives are set to play an even more transformative role in building an inclusive and self-reliant India.

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