Co-operative society in India

Before starting off on Co-operative society in India, at first one should know what is a Co-operative Society i.e. the definition of it, how it came into existence, its features, types and benefits.

Definition of Co-operative society in India

A Co-operative society in India can be described as the association of persons coming together voluntarily for a specific purpose of the same territory. Therefore, voluntarily some like-minded persons form a society to fulfil their economic, social and cultural needs. It is an autonomous body and self-help organization controlled by their members who actively participate in setting their principles and making decisions solely for the interest of the members of the society. To form a co-operative society there must be the consent of at least 10 members with equal voting rights or power.

How Co-operative society in India came into existence

The sole purpose of introducing the concept of co-operative society in India was to establish economic and social regeneration and welfare among the weaker and poorer section of the community across India including women empowerment. At times, there was a very adverse situation when rich were becoming richer and poor were becoming poorer. To eradicate exploitation of the weaker sections of the society especially farmers by the then hungry businessmen, The Government of India came up with The Indian Co-operative societies Act, 1912. After independence, different State Govt. adopted the original act and further reconstructed various acts and rules in conformity with the original Co-operative societies act according to the needs of their people.
Self Help Group(SHG) of women is not a scheme. It is rather a medium of development. With the help of this group, women in India have been able to find out the ladder of success and enlightening every corner of the society with extreme happiness. Women in India, in the current day, are not going to stay in distress any more as the Co-operative society in India give them access to form a self-sufficient group which is popularly known as SHG or Self Help Group. Therefore, Co-operative society takes an active part in women empowerment, women development and reduction in women exploitation.
7th July is celebrated as the “International Co-operative Day” across the world. In India 14th to 20th November is celebrated as the “National Co-operative Week” every year.

Features of Co-operative society in India

• A Co-operative society must be voluntary in nature;
• A Co-operative society shall be accessible to all irrespective of all caste, creed, and religion of the members. This means it should not be formed only for the welfare of a particular caste or religion;
• A Co-operative society must necessarily be democratic in nature and be controlled by their members only;
• The essential part of a Co-operative society is that its state of affairs shall be managed and administered by elected or appointed persons as consented by all the members;
• Every member of a Co-operative society shall enjoy equal voting rights in conformity with their basic principle;
• The members of a Co-operative society enjoy limited liability facility along with limited right to receive limited compensation. Means cannot be held liable personally for any debts of the society;
• Every member of a Co-operative society shall enjoy equal profit sharing facility. This results in fewer chances of grievances among its members;
• It must be registered under Co-operative societies act;
• A Co-operative society must act in the interest of its members and must co-operate with other Co-operative societies as far as practicable;
• Last but not the least A Co-operative society must provide priority to the welfare and sustainable development of its members;
• The main feature of Co-operative society in India is that members produce articles or goods by themselves and directly sell those things to customers resulting avoidance intermediaries.
• Being a non-profit seeking entity, Co-operative society delivers various social services to the community. It not only takes from the society but returns back to the community by engaging in different social activities like blood donation, Swach Bharat Abhiyan, arranging education among the poorest and many more.

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Types of Co-operative society in India

The Co-operative society in India is basically categorized into main two types namely:-

1. Credit Co-operative society
2. Non-Credit Co-operative society.

Further, these two can be sub-categorized into two types namely:-
A. Agricultural Co-operative society
B. Non-agricultural Co-operative society

1. Credit Co-operative society:-

A. Agricultural Credit Co-operative society

• Central Co-operative Banks/units of State Co-operative Banks
• Land Development Bank
• Primary Agricultural Credit Co-operative Society
• Grain Bank

B. Non Agricultural Credit Co-operative society

• Employees’ Credit Co-operative Society
• Urban Credit Co-operative Society
• Women Credit Co-operative Society
• Urban Bank
• SHG Sangha Credit Co-operative Society

2. Non Credit Co-operative society

A. Agricultural Credit Co-operative society

• Primary Agricultural Marketing Society
• Horticulture Co-operative Society
• Cold storage
• Processing Co-operative Society including rice mill, Dairy
• Other types

B. Non Agricultural Credit Co-operative society

• Wholesale consumers’ Co-operative Society
• Primary consumers’ Co-operative Society
• Engineers Co-operative Society
• Labour Co-operative Society
• Service Co-operative Society
• Housing Co-operative Society
• Transport Co-operative Society
• Other types

Benefits of Co-operative society in India

• Voluntary membership: – Generally, a Co-operative Society requires minimum 10 members for registration. There is no pressure on the members regarding their entry and exit from the society. One can join at any time and can exit any time as per his or her wish. Therefore, the participation in the society is completely voluntary in nature and is not subjected to any obligation;
• Not restricted to any specific caste, creed, and religion:- The primary objective of a Co-operative Society is to fulfil their economic, social and cultural needs and therefore it is not restricted to any particular caste, community or religion;
• Ease of formation:- A Co-operative Society can easily be formed or registered unlike Companies with having only minimum 10 members;
• Limited Liability:- The members of the Co-operative Society are liable to their capital contribution only. This means in the event of any debts repayment on behalf of the society members are liable up to their capital contribution and no further amount can be recovered from them personally;
• Minimum contribution:- With a very minimum capital contribution by members, A Co-operative society can be formed very easily. The contribution is kept low intentionally so that everyone can be a member of the society;
• Employment generation:- The most important part of Co-operative Society is that it can generate employment to a great extent, which helps them enormously for the upliftment of the weaker and lower section of the society. With increased population and unemployment this has really come handy in employment generation;
• Equal profit/surplus distribution:- One of the main benefits of Co-operative society is that the members are entitled to equal profit or surplus distribution. They believe in equality in all respect. No self-development or well being, development for all equally is the primary ambition of this initiative;
• Government Contribution:- Government contributes in Co-operative society in many ways. Like, they buy shares of Co-operative societies, they provide subsidy in many schemes and also extends grants, loans to Co-operative society in India. Which indirectly helps societies in sustainable growth;
• Tax benefits:- To promote the Co-operative society and also the standard of living of its members, Govt. provide different tax exemptions so that tax does not become a hindrance in their growth story;
• Avoidance of intermediaries:- We must not be oblivious that the Co-operative society in India came into existence as a result of rigorous co-operative movements to free the weaker sections of the society from hungry profit making businessmen in India. Thus, Co-operative society in India took an active part to do away with these polluted hungry middlemen or intermediaries. This has resulted in a sustainable growth of Co-operative society. There are so many Co-operative societies in India, where members themselves produce articles and sell among themselves. This means the main market of the society itself is the members of that society.

Limitations of Co-operative society in India

Like every entity Co-operative society too goes through some limitations. They are depicted below.

• Weak management;
• Limited resources;
• Infrastructural hindrances due to insufficient capital infusion;
• Inadequately skilled workforce;
• Lack of managerial skill;
• Excessive Govt. interference;
• Excessive Govt. regulation implementation;
• Limited scope availability;
• Lack of accountability;
• Misuse of Funds;
• Conflicts of interest among members.

Final word on Co-operative society in India

I hope I have done enough justice in writing this blog post on Co-operative society in India along with its definition, features, types and benefits. There are some limitations of Co-operative society as well but that does not mean that it is not useful. Its benefits are manifold as compared to its demerits. You can also comment below in the comment section if you have any queries regarding this blog post. Share as much as you can if you like my work to promote this awareness among all.