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History of Cooperative Movement in India
Introduction
The co-operative movement originated in India due to the debt-ridden farmer in the village and his exploitation by moneylenders. In India, the first co-operative society was established in Barode in the then Bombay province in the year 1889.
In 1895, Sir Frederick Nicholson awarded the first co-operative credit in India. The first Co-operative Act was passed in India in 1904. The Government passed another Act, the Co-operative Act, in 1912, as a new Act was felt to remove the deficiencies of the Act of 1904.
No.1 Study notes on History of Cooperative Movement in India
Development of Co-operation in India in Pre-Independence Period
Introduction:
‘No salvation without co-operation’, ‘One for all and all for one’ is the slogan of co-operation. The year 1904 is considered as the base year of the development of the co-operative movement in India during the pre-independence period and five stages of development of the co-operative movement in India are considered as 1904 to 1911, 1912 to 1918, 1919 to 1929, 1930 to 1939 and 1939 to 1946. The stages of development of co-operative movement in India can be explained on the basis of following points.
1) 1904 to 1911 Primary Stage :
The Credit Societies Act of 1904 gave impetus to the co-operative movement in India. Due to this act, new institutions were established in the British part of India. In 1905 at Madras ‘Triplicane Urban Co. Society’ was established. Also Central Urban Bank was established in Madras itself.
Crosthwaite Central Co. in the Central Province in 1907. A bank was established. Meghwal Co-op in Mumbai in 1911. A credit society was established. During this period Thakar Krishi Sahakari Credit Society was established in Shankarpatti village of Jalanghar district. Its first stage in History of Cooperative Movement in India
2) Phase of rapid development from 1912 to 1918:
As the limitations and shortcomings of the Co-operative Credit Societies Act, 1904 became apparent, the need for a comprehensive legislation arose. The development of co-operative movement in India during the period 1912 to 1918 made the Act of 1904 seem incomplete.
Because there was no provision in this Act to register cooperative societies other than credit institutions. Emphasis was placed on limiting the scope of cooperative societies. The Act of 1904 had no provision for setting up non-credit institutions. Hence the Government of India passed the Comprehensive Central Co-operative Act in 1912.Its second stage in History of Cooperative Movement in India
3) Functions of McLagan Committee:
The work of McLagan Committee is considered to be unique in the history of Indian Co-operative movement. In 1914, the central government set up a committee under the chairmanship of Edward McLagan to study the progress and shortcomings of the co-operative movement in India. In 1915, Edward McLagan submitted his report to the government.
Some fundamental suggestions were made for the future of the cooperative movement. As a result, there was transparency in the functioning of cooperative societies.Its Third stage in History of Cooperative Movement in India
4) Phase of unplanned development from 1919 to 1929:
The British decided to implement the Montague-Chelmsford Amendment Act in India and enacted a Constitutional Amendment Act in 1919. Under this Act ‘co-operation’ became a provincial subject. As co-operation became a provincial subject, each province began to pay more attention to the co-operative movement.
As a result, the cooperative movement developed rapidly during this period. But this development was unplanned. Co-operation being a provincial subject, the Act passed in 1912 became useless. In 1925, Bombay Province passed the first Provincial Act.Its fourth stage in History of Cooperative Movement in India
5) Period of Reconstruction from 1930 to 1939:
The period 1930 to 1939 is considered to be a period of restructuring in the history of Indian Co-operative Movement. The co-operative movement in India suffered a setback due to the Great Depression of 1929-30. The Great Depression hit the Indian economy, especially the farmers.
In 1929, the number of cooperative societies was 88 thousand. It increased to 122 thousand by 1939. That means 34 thousand cooperative societies were established in this nine-year period. The important features of this period are that the Government of India passed the Reserve Bank of India Act in 1934 on the recommendation of the Central Banking Commission and the Reserve Bank of India was established in 1935. These two events gave impetus to the Indian cooperative movement.Its fifth stage in History of Cooperative Movement in India
6) Stage of Redevelopment from 1939 to 1946:
The period 1939 to 1946 is considered to be a very important period in the development of the Indian Co-operative Movement. Special efforts were made in this period with the aim of improving the backwardness and brokenness of the co-operative movement in the previous period. The recommendations suggested by the Royal Agricultural Commission and the Central Banking Inquiry Commission were implemented. As a result the co-operative movement was completely eradicated. As the economy boomed, the prices of agricultural commodities increased. Farmers’ income increased.Its sixth stage in History of Cooperative Movement in India.
No.1 Study notes on History of Cooperative Movement in India
Present Status of Co-operative Movement in India
1) Present Status of Co-operative Bank
Looking at the current status of co-operative banks in India till March 2017, the total number of co-operative credit institutions was 95946. These statistics include urban cooperative credit institutions, rural cooperative credit institutions, notified-scheduled credit institutions and short- and long-term institutions, then state cooperative banks and district cooperative banks.
2) Committees appointed to improve co-operative movement, laws and reforms
As per the changing times, many amendments were made to make the cooperative movement more powerful by reducing the defects in the cooperative movement. Apart from this, various committees were appointed and reformed to review and reorganize the cooperative movement.
3) Provision made and decisions taken for cooperative sector during the plan period
In order to develop India in a planned manner, the Government of India established the Planning Commission in 1950 and fixed a period of five years as a plan, and actually from 1951, the first five-year plan was implemented. In every five-year plan, some concrete decisions were taken to strengthen the cooperative movement and substantial financial provision was made.
No.1 Study notes on History of Cooperative Movement in India
4) 97th Constitutional Amendment to Cooperatives Act:
One of the most important developments in the field of cooperatives in recent times is the 97th Amendment to the Cooperatives Act. Laws have been enacted from time to time to determine the structure of the cooperative sector in India. Also many study committees were appointed. But cooperative sector was not given a place in the Constitution of India. The decision to amend the constitution was taken as a combined result of the Model Law (1990) suggested by the Brahaprakash Chaudhary Committee, the National Cooperative Policy (2002) and the recommendations of the Shivajirao Patil Committee (2009).
5) Present Status of Primary Co-operative Credit Societies State wise in India
As per 2014-15 data, the number of Primary Co-operative Credit Societies in India was 92,789. If we compare with all the states and Union Territories in India, it is clear that the co-operative movement is the most developed in Maharashtra. Considering the share of Maharashtra alone in India, the number of co-operative credit institutions is 22.84%, membership 11.50%, working capital 6.80%, deposits 0.22% (Rs. 1,877 million), while in the year 2013-14 Maharashtra The total loan disbursement by cooperative credit societies was 7.92% (Rs. 1,26,126 million).
No.1 Study notes on History of Cooperative Movement in India
Suggested Amendments to the Constitution
1) The word Co-operative Society was inserted after the word or Union in Part III.
2) Section 43B was newly inserted in Part IV. This section will seek to promote voluntary formation of cooperatives, autonomous functioning, democratic control and professional management.
3) Part 9A was inserted after Part 9B. The following provision was included in it.
a) Forming a cooperative society shall be a fundamental right.
b) One seat in the Board of Directors shall be reserved for Scheduled Castes or Scheduled Tribes and two seats for women.
c) Co-operative society may set up a mechanism to supervise the elections.
d) There shall be uniformity in the tenure of the Board of Directors.
e) The Board of Directors shall have a maximum of 21 members. The term of office of the members of the Board of Directors shall be five years from the date of election.
f) The Board of Directors may be suspended for a minimum period of six months.
A) An independent professional audit should be conducted.
o) Right to information shall be made available to the members of cooperative societies.
h) Rai Sarkar shall be empowered to prepare periodical reports on the activities and accounts of the Co-operative Societies.
g) Provision shall be made regarding offenses and penalties in respect of co-operative societies.
No.1 Study notes on History of Cooperative Movement in India
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