Why there is Need for Discussion:
The United Nations General Assembly on 24th June 2024 declared 2025 as the International Year of Cooperatives (IYC2025), which will be celebrated under the theme “Cooperatives build a better world”. This theme highlights the enduring global impact of cooperatives and emphasizes that the cooperative model is an important solution to tackle various global challenges. Additionally, it underlines the critical role of cooperatives in advancing the implementation of the Sustainable Development Goals (SDGs) by 2030. In its resolution, the UN General Assembly recommended ways to celebrate this year and encouraged all UN member states, the UN system and relevant stakeholders to take advantage of this event to promote the contribution of cooperatives to social and economic development. calls for consideration of the establishment of national committees for preparation. “The decision taken by the General Assembly could not have been premature. The innovative contribution of cooperatives to sustainable development will be critical to accelerate progress in achieving the Sustainable Development Goals as we approach 2030,” said Li Junhua, Under-Secretary-General of the United Nations Department of Economic and Social Affairs. “The second International Year of Cooperatives will be an opportunity for all stakeholders to mobilize to support and expand cooperatives everywhere, thereby strengthening their contribution to a better world.” The soft launch of IYC2025 will take place on 9 July 2024 during the UN High-Level Political Forum at UN Headquarters in New York. This hybrid event will be organized by the Committee for the Promotion and Advancement of Cooperatives (COPAC) in collaboration with the Permanent Mission of Mongolia to the United Nations. Organizers will unveil IYC2025. The event, which will include the theme, program roadmap and communication materials, will also mark International Cooperative Day, which is celebrated globally on the first Saturday of July every year. This year it will be celebrated on 05th July 2025. 2025 has been declared the International Year of Cooperatives by the United Nations. In addition, 2025 has also been declared the International Year of Quantum Science and Technology and the International Year of Peace and Trust.
The main objectives of IYC25 include:
1) Governments should create a conducive environment for cooperatives
2) Cooperatives should promote public awareness, develop new leaders and leverage cooperation
3) Institutions and development agencies should promote cooperatives through education, capacity building and facilitating international cooperation
4) The public should understand the cooperative identity and support cooperative initiatives
The United Nations General Assembly declared the first International Year of Cooperatives in 2012 and called for highlighting the contribution of cooperatives to socio-economic development, in particular their impact on poverty reduction, job creation and social integration. Cooperative organizations around the world celebrated the opening ceremony under the theme Cooperative Enterprises Build a Better World to encourage the growth and establishment of cooperatives around the world.
Cooperative Builds a better world :
The aim of the cooperative movement is to free farmers, laborers, craftsmen, small businessmen and the general public engaged in productive activities at various levels from the exploitation of middlemen, encourage their collective economic activities based on mutual cooperation, and ensure their economic, social and cultural development. To provide them a fair price for their labor and produce. Along with this, quality products are to be made available to consumers at reasonable prices and through this, exploitation free, self-reliant and strong economic and social system is to be created so that all-round progress of the state can be ensured.
Since long development has been proved meaningless until it reaches to the bottom of the society and cooperative is one such medium which can reduce and eliminate economic and social inequalities. Without welfare of citizens of a nation at large development of few is considered undesirable situation of the society by politicians, reformers and dynamic economists as well. Being torch bearers of the Indian economy we as an accountants must dream and appreciate the world with economic and social equality. Industries and Businesses in the form of Cooperatives have always provided solutions to the most typical problems faced by governments in particular and societies in general.
The Seven Cooperative Principles:
These principles, recognized internationally, guide the operations and governance of cooperative organizations worldwide. They include:
Voluntary and Open Membership:
Cooperatives are open to all individuals who can utilize their services and are willing to accept the responsibilities of membership, without gender, social, racial, political, or religious discrimination.
Democratic Member Control:
Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. Each member typically has one vote, regardless of their economic contribution.
Members’ Economic Participation:
Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative.
Autonomy and Independence:
Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.
Education, Training, and Information:
Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their cooperatives. They also inform the general public – particularly young people and opinion leaders – about the nature and benefits of cooperation.
Cooperation among Cooperatives:
Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional, and international structures.
Concern for Community:
Cooperatives work for the sustainable development of their communities through policies approved by their members.
Cooperatives are built on a foundation of values that include:
Self-help and self-responsibility: Members take initiative to improve their own situations and are accountable for their actions.
Equality and equity: All members are treated fairly and have equal opportunities.
Solidarity: Members support each other and work together for the common good.
Honesty, openness, social responsibility, and caring for others: These ethical values guide the cooperative’s interactions with its members and the wider community.
Corporate Governance pillars for Cooperative:
Teaming:
Effective collaboration and teamwork among all stakeholders (members, board, management, and staff).
Accountable Empowerment:
Empowering individuals while holding them accountable for their actions and decisions.
Democracy:
Ensuring democratic principles and practices are followed in all aspects of the cooperative’s operations.
Strategic Leadership:
Providing clear direction, purpose, and vision for the cooperative’s future.
Cooperative Movement in India (History and Later Developments):
Even before formal cooperative structures came into being through the passing of a law, the practice of the concept of cooperation and cooperative activities were prevalent in several parts of India. Village communities collectively creating permanent assets like village tanks or village forests called Devarai or Vanarai was fairly common. Similarly, instances of pooling of resources by groups, like foodgrains after harvest to lend to needy members of the group before the next harvest, or collecting small contributions in cash at regular intervals to lend to members of the group viz., Chit Funds, impounded water by putting up bunds and agreed to ensure equitable distribution of water, as well as harvesting were yearly partnerships of peasants to cultivate jointly, and distribute the harvested produce in proportion to the labour and bullock power contributed by their partners, were similar instances of cooperation.
Taking cognizance of these developments and to provide a legal basis for cooperative societies, the Edward Law Committee with Mr. Nicholson as one of the members was appointed by the Government to examine and recommend a course of action. The Cooperative Societies Bill, based on the recommendations of this Committee, was enacted on 25th March, 1904. As its name suggests, the Cooperative Credit Societies Act was restricted to credit cooperatives. By 1911, there were 5,300 societies in existence with a membership of over 3 lakhs. The first few cooperative societies registered in India under the 1904 Act in the first 5-6 years are as follows: Rajahauli Village Bank, Jorhat, Jorhat Cooperative Town Bank and Charigaon Village Bank, Jorhat, Assam (1904)etc.
With the developments in terms of growth in the number of cooperatives, far exceeding anticipation, the Cooperative Societies Act of 1912 became a necessity and cooperatives could be organized under this Act for providing non-credit services to their members. The Act also provided for Federations of cooperatives. With this enactment, in the credit sector, urban cooperative banks converted themselves into Central Cooperative Banks with primary cooperatives and individuals as their members. Similarly, non-credit activities were also cooperatively organized such as purchase and sales unions, marketing societies, and in the non-agricultural sector, cooperatives of handloom weavers and other artisans. Maclagen Committee on Cooperation (1914) The Banking Crisis and the First World War both affected the growth of cooperatives. Although member deposits in cooperatives increased sharply, the war affected the export and prices of cash crops adversely, resulting in increased over-dues of loans of primary agricultural societies. To take stock of the situation, in October, 1914 a Committee on Cooperation under Sir Edward Maclagen was appointed by the Government, in October 1914, to study the state. It recommended building up a strong three-tier structure in every province with primaries at the base, the Central Cooperative Banks at the middle tier and the Provincial Cooperative Bank at the apex, basically to provide short-term and medium-term finance. Considerable emphasis was laid on ensuring the cooperative character of these institutions and training and member education, including training of the Registrar and his staff. In 1919, with the passing of the Reforms Act, Cooperation as a subject was transferred to the provinces. The Bombay Cooperative Societies Act of 1925, the first provincial Act to be passed, among others, introduced the principle of one-man one-vote.
Pre Independence Development : In 1946, inspired by Sardar Vallabh Bhai Patel and led by Shri Morarji Desai and Shri Tribhuvan Das Patel, the milk producers of Khera District of Gujarat went on a fifteen day strike. Their refusal to supply milk forced the Bombay Government to withdraw its order granting monopoly procurement rights to Polson, a private dairy. History was made when two Primary Village Milk Producer Societies were registered in October 1946. Soon after on 14th December 1946, the Khera District Cooperative Milk Producers Milk Union known as Amul was registered.
Post Independence Developments: After India attained Independence in 1947, cooperative development received a boost, with cooperatives being given a vital role in the various plans formulated by the Planning Commission. The First Five Year Plan (1951-56), outlined in detail the vision of the cooperative movement in India and the rationale for emphasizing cooperatives and panchayats as preferred organizations for economic and political development. The Plan emphasized the adoption of the cooperative method of organization to cover all aspects of community development. It provided for setting up of urban cooperative banks, industrial cooperatives of workers, consumer cooperatives, housing cooperatives, diffusion of knowledge through cooperative training and education and recommended that every government department follow the policy of building up cooperatives. The Second Five-Year Plan (1956) aimed at enabling cooperatives to increasingly become the principal basis for organization of economic activity. The Plan drew up programmes of cooperative development based on the recommendations of the All India Rural Credit Survey Committee (AIRCS). The Third Five Year Plan (1961)- the principal basis of organization in branches of economic life, notably agriculture, minor irrigation, small industries and processing, marketing, distribution, rural electrification, housing and construction and provision of essential amenities for local communities. Even the medium and large industrie can be established in cooperative format. The Fourth Five Year Plan (1969-1974) gave high priority to the re-organization of cooperatives to make cooperative short-term and medium-term structure viable. It also made necessary provisions to provide cooperatives with management subsidy and share capital contribution, as well as for the rehabilitation of Central Cooperative Banks. It also emphasized the need to orient policies in favour of small cultivators. The Fifth Five Year Plan (1974-1979) took note of the high level of over-dues. In its recommended strategy for cooperative development, the correction of regional imbalances and reorienting the cooperatives towards the under-privileged was to receive special attention. The Sixth Five Year Plan (1979-1985) also emphasized the importance of cooperative efforts being more systematically directed towards ameliorating the economic conditions of the rural poor. The Plan recommended steps for re-organizing Primary Agricultural Credit Societies into strong and viable multi-purpose units.
The Seventh Five Year Plan (1985-1990) pointed out that while there had been all round progress in credit, poor recovery of loans and high level of overdue were matters of concern. The Plan recommended amongst others development of Primary Agricultural Credit Societies as multiple viable units; realignment of policies and procedures to expand flow of credit and ensure inputs and services particularly to weaker sections; special programmes for the North Eastern Region; strengthening of consumer cooperative movement in urban as well as rural areas and promoting professional management.
Model Cooperatives Act, 1990: In 1990, an Expert Committee, under the chairmanship of Choudhary Brahm Perkash, was appointed by the Planning Commission to make a rapid review of the broad status of the cooperative movement, suggest future directions and finalize a Model Cooperatives Act. The Committee submitted its report in 1991. Since cooperation is a State subject and each State has its own cooperative legislation covering cooperatives whose membership is confined to the State, the report of the Committee, along with a draft Model Cooperative Law, was circulated to all State Governments for their consideration and adoption at State level.
Parallel Cooperative Legislation From the Ninth Plan (1997-2002) onwards, there has been no specific mention about cooperatives as a part of the Plan. Since Cooperation is a State subject and recognizing the difficulties in having the existing State Cooperative Acts amended on the lines of the Model Cooperatives Act, a section of cooperators and civil society initiated action to put in place Parallel Cooperative Legislation for self-reliant cooperatives. Multi-State Cooperative Societies Act, 2002 The Multi-State Cooperative Societies (MSCS) Act, enacted in 1984, was modified in 2002, in keeping with the spirit of the Model Cooperatives Act. Unlike the State Laws, which remained as a parallel legislation to co-exist with the earlier laws, the MSCS Act, 2002 replaced the earlier Act of 1984.
National Cooperative Policy (2002) In 2002, the Government of India enunciated a National Cooperative Policy. The objective of the Policy is to facilitate an all-round development of cooperatives in the country. The policy promises to provide cooperatives with the necessary support, encouragement and assistance, to ensure their functioning as autonomous, self-reliant and democratically managed institutions, accountable to their members, and making a significant contribution to the national economy.
Task Force on Revival of Cooperative Credit Institutions : To nurse the rural cooperative credit system back to health, to ensure that the rural credit doubled over three years and that the coverage of small and marginal farmers by institutional lending was expanded substantially, the Government of India in August 2004 set up a Task Force to suggest an action plan for reviving rural cooperative credit institutions and legal measures necessary for facilitating this process. The Task Force, chaired by Prof. A. Vaidyanathan, recommended that any financial restructuring which did not address the root causes of the weaknesses of the system would not result in its sustained revival and would require legal measures.
Objectives of Viksit Bharat 2047 for which Cooperative Movement is the only assurance : As we all know the primary goal of Developed India is to transform India into a developed nation by 2047. But to achieve this status of developed nation government has charted a roadmap in which cooperative movement has a key role to play. On strategy front Cooperatives can contribute substantially like expanding social welfare schemes, promoting economic growth, promoting sustainable development and increasing both ease of living.
Following mile stones of Viksit Bharart needs cooperative movement backing for their achievement:
Zero Poverty
The goal of zero poverty can be achieved in a developed India 2047 through a multi-pronged approach towards empowering the underprivileged and promoting inclusive growth.
Farmer Welfare
The government can lay emphasis on development of Agriculture Societies or Farmer Societies for this end.
Housing for All : Cooperative movement can contribute to some extent here also.
Affordability of quality care and medicines.
Always Cooperative Medicines made available at Government Hospitals was a great value addition to society by cooperatives. Government should think to explore all possible alternatives.
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