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of cooperatives


Building on earlier indigenous traditions, the beginnings of a modern cooperative movement in India date from the end of the 19th century. An organized system of cooperation, based on a Western model, was introduced in 1904 with the passage of the Cooperative Societies Act, focusing on the encouragement and establishment of credit cooperatives. By 1906-07, 843 such cooperatives had been formed. The law was amended in 1912 with passage of the All-India Cooperative Societies Law, broadening the focus to include all types of cooperatives in all parts of the country. The response, voluntary as well as officially encouraged, was dramatic, with the number of cooperatives increasing by 50% in 1912 alone—from 8.177 to 12.324. A pattern of rapid growth of cooperatives in most sectors of the economy continued, accompanied in 1919 with an act transferring primary responsibility for cooperative development and supervision to the then provincial (now state) governments. Provincial legislation proliferated, as did accompanying bureaucracies. By 1922—23 there were 56.136 cooperatives with 2.102.446 members. Growth and expansion of activities continued during the next 25 years, including the establishment of the National Cooperative Union of India in 1929. By independence and the partition of India and Pakistan in 1947, the local cooperative society had become a component part of village life in rural India, with cooperation expanding in urban areas as well. A national movement had emerged, reflected in the establishment of the National Cooperative Union of India in 1956. The newly independent government of India committed itself to being a planned welfare state with cooperatives as an integral institution, and by the time of the second five-year plan (1956 – 61) it had adopted a goal for the country of becoming a Socialist Cooperative Commonwealth. Implementation of these goals involved the government and government officials closely and deeply in the day-to-day affairs of cooperatives at time, most now agree, when the emphasis should have been on expanding the independent character of the cooperatives as private, non-governmental economic and social endeavors. Between the dual forces of an increasingly sophisticated cadre of cooperative leaders, who wanted their movement to be theirs and to grow in scope and influence, and the (state and national) governments’ determination to have cooperatives play vital and controlled roles in national development, conflict was assured. The cooperatives continued to grow and develop and to assert independent tendencies, while still bound by financial support and legislation that literally required the government to stay intimately involved in their operations. Clear plans and action to resolve this predicament await decisive moves on the part of both parties, but particularly on the part of the Cooperative movement, which needs to risk giving up a preferential position as it asserts independence. The decision of the ICA to hold its Central Committee meeting in India in 1989, the first such in a developing country, attested to the importance and influence of Indian cooperatives in the international cooperative community. India’s movement is now the largest national movement in the world, both in numbers of cooperatives and in numbers of members. In 1991 the movement reported 401,139 cooperatives with 166,336,000 members (19.2% of the population). Its economic importance is reflected in the following facts: there are 19 national federations active in different sectors of the economy, with 124 counterparts in the different states of India; over 50% of the sugar produced in the country comes from cooperative sugar factories; two cooperative fertilizer companies supply some 70% of the fertilizer market; and there have been major cooperative achievements in dairy development. The above, as well as other measures to make cooperatives particularly relevant to the poor (still the vast majority of the Indian populace), all attest to the importance of cooperatives in Indian society. By 1995, membership had grown to 182,921,000 in 446,784 societies in the following sectors: agricultural—102,935 societies with 20,244,000 members; consumer— 23,903/11,234,000; fisheries—10,763/1,122,000; housing—71,040/ 5,933,000; savings and credit (banking)—41,500/43,716,000; worker productive—56,852/4,064,000; and others—139,191/96,608,000 Co operatives at that time included 19.7% of the population.
Jack Shaffer, Historical Dictionary of the Cooperative Movement, The Scarecrow Press, Inc. Lanham, Md., & London 1999

Banishree Das, Nirod Kumar Palai, Kumar Das, Problems and prospects of the cooperative movement in India under the globalization regime, XIV International Economic History Congress, Helsinki Finland, 21-25 August 2006.   File 
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