Explain the different stages of development of cooperative societies in India.

Explain the different stages of development of cooperative societies in India.


The cooperative societies may be thought of as an independent group of individuals who have freely joined forces in order to fulfil their shared goals and objectives in the economic, social, and cultural spheres through a jointly owned and democratically run company.

It generally affects those who are poor, illiterate and and unskilled. In the the banking sector, housing, and agricultural industries, it was critical. Particularly in fields, collaboration organisations have aided in raising engagement with politics.


The development of cooperative societies in India can be broadly classified into four stages:
1. Early Stage (1904-1919):
– The Cooperative Movement in India began in the early 20th century, primarily as a response to the agrarian crisis and the exploitative practices faced by farmers.
– The first cooperative credit society was formed in 1904 in the state of Maharashtra, known as the Cooperative Credit Societies Act, 1904.
– During this stage, the focus was mainly on providing financial assistance to farmers and rural communities through cooperative credit societies.
– The success of the cooperative movement led to the enactment of cooperative legislations in various states, providing a legal framework for their functioning.

2. Expansion and Diversification (1920-1947):
– In this stage, the cooperative movement witnessed significant growth and diversification across various sectors.
– Cooperative societies expanded beyond credit and began to cover other areas such as agriculture, dairy, fisheries, housing, consumer goods, and small-scale industries.
– The All India Rural Credit Survey Committee (known as the Famine Inquiry Committee) in 1929 recognized the importance of cooperatives in rural development and recommended their expansion.
– Cooperative marketing societies, agricultural processing units, and agricultural service cooperatives were established during this period.

3. Institutionalization and Government Support (1947-1991):
– After India’s independence in 1947, the cooperative movement received significant attention from the government.
– The Constitution of India recognized cooperatives as autonomous institutions and provided for their promotion and protection.
– The cooperative sector expanded rapidly with the establishment of national-level cooperative bodies such as the National Cooperative Union of India (NCUI) and the National Cooperative Development Corporation (NCDC).
– The government introduced cooperative-friendly policies, provided financial assistance, and initiated various schemes to promote cooperative development in sectors like agriculture, dairy, and rural credit.
– State Cooperative Acts were enacted to regulate and promote the functioning of cooperative societies at the state level.

4. Challenges and Reforms (1991 onwards):
– In this stage, the cooperative movement faced various challenges due to factors like politicization, corruption, mismanagement, and lack of transparency.
– The government recognized the need for reforms and initiated measures to strengthen and revitalize the cooperative sector.
– The 97th Constitutional Amendment Act, 2011, brought cooperative societies within the purview of the Constitution, aiming to ensure democratic functioning, autonomy, and professional management.
– Cooperative reforms focused on promoting transparency, accountability, democratic functioning, capacity building, computerization, and financial viability of cooperative societies.
– The use of technology, digital platforms, and e-governance systems have been encouraged to streamline operations and enhance efficiency.
– Efforts have been made to promote cooperative education and training, facilitate access to capital, and integrate cooperatives into the mainstream financial system.

These stages represent the evolution and progress of cooperative societies in India. While challenges persist, cooperative societies continue to play a vital role in empowering rural communities, promoting inclusive development, and fostering economic growth in various sectors of the Indian economy.





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