Co-operative Societies and Constitution

Cooperative Societies and Constitution

BLOG/ NEWS Constitution of India LAW EXPLAINED
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The idea of cooperative isn’t unique to human beings. It dates back to the man himself and is now a common method of Organisation found in virtually all countries.

What is a group, then? Because we know the term ‘cooperation’ implies working together, likewise a ‘co-operative’ is when people who are alone and helpless join together to pool their energies to accomplish shared economic to social goals. The core theory behind a cooperative is self-help by mutual assistance which also fosters a sense of fraternity among its members and instills in them universal values for a better life.

In simple words, cooperatives are an voluntary group of individuals that collectively come together in a mutually operated and publicly regulated organization to fulfill their shared material, social and cultural needs and aspirations. For instance, AMUL (Anand Milk Union Limited) is the trademark of Gujarat Milk Commodity Co-operatives and is considered one of India’s biggest cooperatives today.

Anand Union dairy farmers gather their milk which is then used to produce pouch milk and other goods, and the proceeds from the selling of those items are divided among the farmers. — dairy farmer is a cooperative member, and earns on the basis of their milk investment

The cooperatives play an important role in our country’s growth, as India is made up of both urban and established parts, and rural and underdeveloped sections. The majority of the population belongs to the rural areas and engages in agricultural activities and India can never really progress without their growth.

The cooperatives have often worked to reduce poverty and support the needy by supplying them with agricultural credits and money, and by fulfilling their demands for consumption at concessional rates. The rural credit cooperatives developed under NABARD (National Bank for Agriculture and Rural Development) constitute one of India’s major sources of rural financingCo-operatives are often compared to private banks, because a co-operative’s primary aim is not to gain money but to support its people.

But, for unknown purposes, the co-operatives that were originally created to help citizens solve their financial difficulties became compromised. There were instances in which the elections were postponed for an indefinite period and the incumbent remained in charge, and people who were / are in control of the cooperatives were / are the people who joined the cooperatives for personal gain.

This creates a clash of personal interests with the needs of the cooperatives and thus adversely influences the cooperatives’ output. Previously, insufficient training on the part of the cooperatives was generally found, culminating in low efficiency and weak facilities. There was also a shortage of successful participation in the administration of cooperatives. Members are the main members of every organization, as the Organization’s success relies entirely on its patronage.

Unfortunately, however, no participants are conscious of their position; nor are other actors such as the executive team, staff, government, etc. able to consider and appreciate the function. Leaders must understand that their everlasting watchfulness alone will guarantee their cooperative ‘s sovereignty, freedom and development, as they always desired.

“A cooperative with diligent members with a low financial base would be preferable to a cooperative with relaxed members with a strong financial base,” says Luzzati, a prominent Italian cooperator. At the beginning, the government may be criticized for providing so many incentives to cooperatives, such as reserving products, certain additional benefits such as lending services, with little oversight that contributed to such cooperatives being even more lethargic.

We was over-dependent on government aid that contributed to outside intervention, which in effect destroyed the co-operatives’ efficiency and nature. Hence, there was a need for uniformity in cooperative law, particularly with regard to aspects critical to the cooperatives’ autonomous and democratic functioning. This is when the 2011 Constitution Act (97th Amendment) comes into force.


The 2011 Constitution Act (97th Amendment) applies to cooperative societies that operate in India. This helps to solve all of the challenges these cultures face and have an optimal means to handle them. It aims to encourage cooperative economic activities which will in turn help rural India to progress.

The amendment also introduced a host of significant improvements to the Indian Constitution. Right after Section IXA (Municipals) a new Part IXB was added in honor of the cooperatives operating in India. This section includes regulations pertaining to the establishment, board composition, appointment of members and board executives, implementation of this portion to others, etc. in order to bring about uniformity in the mechanism of nominating the representatives and board of directors and thereby address the difficulties they pose in relation to these matters.

Pursuant to Part III of the Constitution, the term “cooperatives” was inserted following “community and partnership” in Stat. 19(1)(c). This enables all residents to establish cooperatives by granting it the importance of the residents’ fundamental right. In addition, the Directive Principles of State Policy (Part IV) on the “promotion of cooperative societies” introduced a new Article 43B which states that the State shall strive to encourage voluntary development, autonomous functioning and competent management of cooperative societies.

On 3 April 2018, the Manipur State Co-operative Union (MSCU) organized a District Level Seminar in Kangpokpi, which centered on “Empowering women and weaker sections by digitization,” taking into account the Union’s objective of propagating the spirit of cooperation to introduce mass production by cooperative movement in the area, while concentrating on empowering women and the weaker group. National Cooperative Union of India, New Delhi sponsored the event.

The Act further tackles the problems of equality and therefore guarantees one position reserved for the SC / ST and two for Women on the board of each cooperative society. Mr. Gurunath Jantikar, Vice President of the Karnataka State Souhrada Federal Cooperative, thought this was a progressive step and the change would improve cooperatives and enable them to meet threats such as foreign direct investment in sectors such as retail trade.

The Act also requires the cooperatives to create departments to monitor the election cycle. The Haryana government recently declared that a specific electoral structure will soon be formed in the state to oversee the cooperative election cycle.

Haryana Governor, Mr Kaptan Singh Solanki said the government believes in strengthening the cooperative sector in order to allow citizens to build on their common potential and the establishment of the electoral authority would contribute to superintendence, direction and regulation of the electoral mechanism in the State’s cooperative organizations.

There was an overwhelming need for such a statutory amendment, because the woes of the cooperative sector became much too many, long-lasting and deep-rooted to be resolved within the present legal system.

This blog is written by Arvind Bhati, Lloyd Law College.

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