New Ministry of Cooperation

The Union Government, in July 2021, created a new Ministry of Cooperation to strengthen the cooperative movement in the country.

The proposal to set up a separate administrative structure for cooperatives was proposed by Finance Minister Nirmala Sitharaman while delivering the union budget speech in 2021.

Ministry of Cooperation: Key Points

  • Before the massive reshuffle of the Cabinet Ministers in India, Prime Minister Narendra Modi announced the creation of a new Ministry of Cooperation.
  • Amit Shah will handle the newly-set up Ministry of Cooperation portfolio along with his current Home Affairs portfolio.
  • A cooperative-based economic development model is crucial for our country’s growth, where each member works with a spirit of responsibility.
  • The new ministry has been created to realize the vision of ‘Sahkar se Samriddhi’ (Prosperity through cooperatives).
  • With the formation of the Ministry of cooperation, the Government has signaled its deep commitment to community-based developmental partnership.

Significance of Ministry of Cooperation

  • The Ministry will provide a separate legal, administrative, and policy framework to strengthen cooperative movement in India.
  • The Ministry will streamline all processes for ‘Ease of doing business’ for cooperatives and boost the development of Multi-State Cooperatives (MSCS).
  • It will help deepen Co-operatives as a true people-based movement reaching up to the grassroots.

What are Co-operatives?

  • According to the International Labour Organisation, a cooperative is an autonomous association of persons united voluntarily to meet their common cultural, economic, and social needs and aspirations through a jointly-owned and democratically-controlled enterprise.
  • India is an agricultural country and has laid the foundation of the World’s biggest cooperative movement in the world.
  • The United Nations General Assembly (UNGA) had declared the year 2012 as the International Year of Cooperatives.
  • There have been several success stories of Cooperatives in India, Green Revolution and White Revolution are the two most important of them. 
  • Examples of cooperatives in India are Lijjat Papad and Amul India. 

Cooperatives Movement in India

Pre- Independent India

  1. The term cooperative societies first came into existence when the farmers of Pune and Ahmednagar spearheaded an agitation against the moneylenders who were charging exorbitant rates of interest.
  2. The Cooperatives first started in Europe, and the British Government replicated it in India to mollify the miseries of the farmers, particularly harassment by moneylenders.
  3. This was when the British Government proffered and passed three acts, namely the Land Improvement Loan Act (1883), the Deccan Agriculture Relief Act (1879), and the Agriculturists Loan Act (1884).
  • In 1903, the first credit cooperative society was formed in Banking with the support of the Government of Bengal. 
  • It was registered under the Friendly Societies Act of the British Government.

Post – Independent India

  • Cooperative Societies became an integral part of the Five-Year Plan post-independence.
  • In 1958, the NDC had recommended a National Policy on Cooperatives to train personnel and set up Co-operative Marketing Societies.
  • To remove the myriads of laws governing similar types of societies, the Multi-State Cooperative Societies Act was enacted in 1984.
  • The important success stories lie behind the success of the White Revolution, which made India the world’s largest producer of milk, and the conversion of villages into model villages has assumed great importance on account of the Green Revolution.

What is the Importance of Cooperatives?

  • It provides funds and agricultural credits where state and private sectors are not able to do very much.
  • It is an organization for the poor people who wish to solve their problems collectively.
  • It provides strategic inputs for the agricultural sector; consumer societies meet their consumption requirements at concessional rates.
  • It overcomes the constraints of agricultural development;
  • It softens class conflicts and reduces social cleavages.
  • It reduces the bureaucratic evils of political factions;
  • It creates a conducive environment for cottage and small industries.

Way Forward with Cooperatives Movement in India

  • Cooperative societies play a huge role in making people familiar with emerging technologies.
  • Strict rules should be implemented to check the irregularities in cooperatives.
  • The cooperative movement can solve the problem of people as its principle focuses on uniting everyone, even while remaining anonymous.
  • There is a need to reinforce the cooperatives by providing market linkages for cooperative societies and agricultural farmers. 
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