IAS Gyan

Daily News Analysis


5th July, 2023 Economy

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Context:  The Prime Minister of India inaugurated the 17th Indian Cooperative Congress in New Delhi. The PM lauded the role of cooperatives in various sectors of the economy and society, such as agriculture, dairy, banking, housing, and health.


  • The PM also highlighted the achievements of his government in promoting cooperatives and empowering farmers. He mentioned the initiatives such as Pradhan Mantri Fasal Bima Yojana, Pradhan Mantri Krishi Sinchai Yojana, Soil Health Card Scheme, e-NAM, and PM-KISAN. He said that these schemes have increased the productivity, profitability, and sustainability of agriculture in India.
  • He urged the cooperatives to adopt modern technology and innovation to enhance their efficiency and competitiveness. He also appealed to them to work for the welfare of the poor and marginalized sections of society. He said that cooperatives can play a vital role in achieving the goals of Atmanirbhar Bharat.
  • The theme of the 17th Indian Cooperative Congress was ‘Amrit Kaal: Prosperity through Cooperation for a Vibrant India’.

Some of the key topics covered

  • Foster inclusive and equitable growth by providing access to finance, markets, skills, and resources to their members, especially the marginalized and vulnerable sections of society.
  • Enhance food security and nutrition by promoting sustainable agricultural practices, reducing food wastage, and supporting smallholder farmers.
  • Improve the quality of life and well-being of their members by offering affordable and quality services in health care, education, housing, sanitation, and social protection.
  • Protect the environment and combat climate change by adopting green technologies, reducing carbon emissions, and promoting renewable energy sources.
  • Strengthen democracy and social cohesion by fostering participatory decision-making, accountability, transparency, and solidarity among their members and communities.

Indian Cooperative Congress

  • The Indian Cooperative Congress event brings together representatives of various cooperative sectors, such as agriculture, banking, housing, dairy, and handicrafts, to discuss the challenges and opportunities facing the cooperative movement in India.
  • It aims to promote the values and principles of cooperation, such as self-help, democracy, equality, and solidarity, among its members and stakeholders.
  • It serves as a platform for sharing best practices, innovations, and success stories of cooperatives across the country.

Cooperative in India


  • A cooperative is a type of organization that is owned and controlled by its members, who share a common goal or interest. It can operate in various sectors, such as agriculture, banking, housing, education, health, etc.
  • It aims to provide goods and services to its members at fair prices, while also promoting social and economic development in their communities.

Background of Cooperatives in India

  • The cooperative movement in India has a long and rich history, dating back to the 19th century. The first cooperative society in India was established in 1904 by Sir Frederick Nicholson, who was inspired by the success of the Rochdale Pioneers in England. The society was called the ‘Cooperative Credit Society’ and it provided loans to farmers at low-interest rates.
  • The cooperative movement gained momentum after the independence of India in 1947, as the government recognized the potential of cooperatives to address the problems of poverty, unemployment, inequality and rural development.

Cooperative under Indian Constitution

  • The Indian Constitution recognizes the importance of cooperatives and provides for their promotion and regulation.
  • Article 19(1)(c) of the Constitution guarantees the right to form cooperatives as a fundamental right.
  • Article 43 of the Constitution directs the State to promote cottage industries and cooperatives in rural areas.
  • Article 243ZH of the Constitution empowers the Parliament and the State Legislatures to enact laws for the incorporation, regulation and winding up of cooperative societies.
  • The government enacted various laws and policies to support and regulate the cooperatives, such as the Multi-State Cooperative Societies Act of 1984, the National Policy on Cooperatives of 2002, and the Constitution (97th Amendment) Act of 2011.


  • They are voluntary associations of persons with equal rights and responsibilities.
  • They are based on the principles of self-help, mutual aid and democratic management.
  • They are autonomous and independent entities that are accountable to their members and the public.
  • They are guided by the values of honesty, transparency, social responsibility and caring for others.


  • The cooperatives in India have made significant contributions to various sectors of the economy and society.


  • Cooperatives have played a vital role in enhancing the productivity, income and welfare of farmers. They have provided inputs, credit, marketing, processing and storage facilities to millions of farmers. Some examples of successful agricultural cooperatives are Amul, IFFCO, etc.


  • Cooperatives have provided banking services to millions of people who are excluded from the formal banking system. They have offered savings, deposits, loans, insurance and remittance facilities to their members at affordable rates. Some examples of successful banking cooperatives are Saraswat Bank, Karnataka State Cooperative Apex Bank, etc.


  • Cooperatives have helped millions of people to access affordable and quality housing. They have constructed, maintained and managed housing complexes for their members. Some examples of successful housing cooperatives are Delhi Cooperative Housing Finance Corporation, Maharashtra State Cooperative Housing Federation, etc.


  • Cooperatives have promoted education and skill development among their members and communities. They have established and run schools, colleges, universities, vocational training centres, etc. Some examples of successful education cooperatives are the Indian Farmers Fertiliser Cooperative Limited (IFFCO) Foundation, the National Cooperative Union of India (NCUI), etc.


  • Cooperatives have provided health care services to their members and communities. They have set up and run hospitals, clinics, pharmacies, diagnostic centres, etc. Some examples of successful health cooperatives are Kerala State Cooperative Hospital Complex and Centre for Advanced Medical Services (KCHCAMS), Seva Bharati Health Cooperative Society, etc.

Challenges faced by Cooperatives

Lack of awareness

  • Many people are not aware of the benefits and opportunities offered by cooperatives. They also lack the knowledge and skills to form and manage cooperatives effectively.

Lack of capital

  • Many cooperatives face difficulties in raising adequate funds for their operations and expansion. They also face high-interest rates and repayment burdens from external sources.

Lack of governance

  • Many cooperatives suffer from poor governance practices that affect their efficiency and accountability. They also face interference and domination from political parties, bureaucrats and vested interests.

Lack of innovation

  • Many cooperatives fail to adapt to the changing needs and preferences of their members and customers. They also lag in adopting new technologies and business models that can enhance their competitiveness and sustainability.

Way forward for cooperatives:

Creating awareness

  • The cooperatives need to create awareness among the public about the concept, principles and benefits of cooperatives. They also need to educate and train their members and staff on the best practices of cooperative management and development.

Mobilizing capital

  • The cooperatives need to mobilize capital from various sources, such as their members, the government, banks, financial institutions, etc. They also need to improve their financial management and audit systems to ensure transparency and accountability.

Strengthening governance

  • The cooperatives need to strengthen their governance structures and processes to ensure democracy, autonomy and participation. They also need to resist and prevent any external interference or influence that may compromise their integrity and independence.

Fostering innovation

  • The cooperatives need to foster innovation and creativity among their members and staff. They also need to adopt and use new technologies and business models that can improve their quality, efficiency and sustainability.


  • Cooperatives in India have a long and glorious history of serving the economic and social needs of millions of people. They have also contributed to the national development goals of poverty alleviation, rural development, employment generation, etc. However, they face many challenges that limit their growth and performance. Therefore, they need to take some measures to overcome these challenges and enhance their competitiveness and sustainability. Cooperatives in India have a bright future ahead of them if they can leverage their strengths and opportunities while addressing their weaknesses and threats.

Must-Read Articles:

COOPERATIVES IN INDIA: https://www.iasgyan.in/daily-current-affairs/cooperatives-in-india


Q. What are the main features and constitutional status of the cooperative sector in India? How does it contribute to the socio-economic development of the country? What are the major challenges faced by the cooperatives and what are some possible ways to overcome them?