Current Affairs

Centre sets up separate Ministry of Co-operation

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  • Categories
    Science & Technology
  • Published
    9th Jul, 2021
  • Context

    In a historic move, a separate ‘Ministry of Co-operation’ has been created to realize the government's vision of ‘Sahkar se Samriddhi’.

  • Background

    • The cooperative movement has its roots in 19th century Europe.
    • It developed in pre-Independence India in response to agricultural distress and indebtedness.
    • Their growth was fostered, first by India's erstwhile British rulers and, post Independence, several steps have been taken to put assist in their growth and functioning.
  • Analysis

    What is a Cooperative?

    • By definition, a cooperative is a company that is owned and managed by the people who work in it.
    • It can also be made up of several similar companies or organizations working together to meet common economic, social, and cultural needs and aspirations.

    History of Co-operatives in India

    • British India first enacted the Cooperative Credit Societies Act, 1904.
    • In 1919, cooperation became a provincial subject and provinces were authorized to make their own cooperative laws under the Montague-Chelmsford Reforms. 
    • In 1942, the British government enacted the Multi-Unit Cooperative Societies Act, intended to cover such societies whose operations extended to more than one province.
    • Co-operative societies were also championed by India’s first Prime Minister Jawaharlal Nehru
    • Post Independence in 1958, the National Development Council (NDC) recommended a national policy on cooperatives with the setting up of co-operative marketing societies.
    • In 1984, Parliament enacted the Multi-State Cooperative Societies Act to declutter different laws governing the same types of societies.
    • In 2002, the then NDA government under Atal Bihari Vajpayee announced a National Policy on Cooperatives to support the promotion and development of cooperatives. 
  • How is this society formed?

    • In India, a cooperative society can be formedunder provisions of the Co-operative Societies Act, 1912.
    • The provisions state that at least 10 people above 18 years, having the capacity to enter into a contract with common economic objectives, such as farming and weaving among others, can form a cooperative society

    Why cooperatives assume significance?

    • In India, the cooperative movement plays a crucial role in the agricultural, banking and housing sectors.
    • Cooperatives are geared towards benefiting the chunk of Indian people — about 65 percentof the country's population.
    • Contribution to rural credit: In the banking sector, their contribution to rural credit increased from 3.1 per cent in 1951 to an impressive 27.3 per cent in 2002, as per the RBI
      • The data shows that the combined balance sheet of all state cooperative banks, as of 31 March 2015, stood at Rs 1.98 lakh crore and that of district central cooperative banks stood at Rs 4.06 lakh crore, with their net profits being Rs 1,005 crore and Rs 793 crore respectively.

    Case Study

    • India has a history of successful cooperative movements. A case in point being Amul that was founded in 1946.
      • Amul for example is an Indian dairy cooperative society that is managed by the Gujarat Co-operative Milk Marketing Federation Ltd and jointly owned by around 36 million milk producers in the western state.
    • The exploitative trade practices followed by the local trade cartel triggered off the cooperative movement.
    • Angered by unfair and manipulative practices followed by the trade, the farmers of the district approached the great Indian patriot Sardar Vallabhbhai Patel for a solution.
    • He advised them to get rid of the middlemen and form their own co-operative, which would have procurement, processing and marketing under their control.
  • What are the different forms of cooperative societies?

    • Cooperatives have also evolved into different forms such as the-
      • Consumers’ cooperative societies like-
        • Kendriya Bhandar, a welfare society for central government employees set up in 1963
        • Apna Bazar, one of the largest and oldest multi-state cooperatives
        • Sahakari Bhandar, a cooperative chain of retail stores
      • Producers’ cooperatives such as-
        • APCO or the Andhra Pradesh State Handloom Weavers Cooperative Society
        • Boyanika, which represents the weavers cooperative societies of Odisha, and Haryana Handloom.

    Items for box

    • There were 1.48 lakh credit societies in India in 2009-10, up from 1.43 lakh in 2000-01, with a total membership of 18.12 crore.
    • The number of non-credit societies went up from 4.08 lakh in 2000-01 to 4.58 lakh in 2009-10 with 6.82 crore members.
  • How is the sector governed?

    • The National Cooperative Union of India (NCUI) and the National Cooperative Development Corporation (NCDC) work for promotion of cooperative movement in India. 

    National Cooperative Union of India, (NCUI)

    • The National Cooperative Union of India, (NCUI) is the apex organisation representing the entire cooperative movement in the country.
    • It was established in 1929 as All India Cooperative Institutes Association and was re-organised as Indian Cooperative Union through the merger of Indian Provincial Cooperative Banks’ Association with All India Cooperative Institutes Association and later in 1961 as National Cooperative Union of India.

    National Cooperative Development Corporation (NCDC)

    • The National Cooperative Development Corporation (NCDC) was established by an Act of Parliament in 1963 as a statutory Corporation under the Ministry of Agriculture & Farmers Welfare.
  • What will the new Ministry do?

    • Framework: This ministry will provide a separate administrative, legal and policy framework for strengthening the cooperative movement in the country.
    • Simplified process: In simpler terms, this Ministry will work to simplify processes.
    • Making business easy for cooperatives: Furthermore, it will work towards ensuring ease of doing business for cooperatives.
    • Multi-state engagements: It will also aid the development of multi-state cooperatives.
  • How is the new Ministry significant?

    • The Ministry will help deepen co-operatives as a true people based movement reaching up to the grassroots.
    • Furthermore, it will work to streamline processes for ‘Ease of doing business’ for co-operatives and enable development of Multi-State Co-operatives (MSCS). 

    Who creates ministries?

    • A ministry in the Government of India essentially overlooks one subject and comprises employed officials such as civil servants who oversee its functioning.
      • Most major ministries are headed by a Cabinet Minister.
      • Cumulatively, all cabinet ministers, ministers of state and the ministers of state who have an independent charge are called the ‘Council of Ministers‘ that aids the Prime Minister in governance.
      • Some ministries also have subdivisions that are called departments.
    • Ministries or departments are created by the President on advice of the Prime Minister under the Government of India (Allocation of Business Rules) 1961, which is part of Article 77 of the Constitution.
    • Under these rules, each ministry is assigned a minister by the President on the advice of the Prime Minister.
    • Each department in the ministry is generally under the charge of a civil servant or official who assists the minister on policy matters and general administration.
    • With this new ministry, there are 41 ministries at present in the Government of India.
    • The Cabinet Secretariat is responsible for coordination, smooth transaction of business and decision-making among ministries and departments and is under the direct charge of the PM.
  • Conclusion

    In a country like India, a cooperative based economic development model is very relevant where each member works efficiently with a spirit of responsibility.