IAS Gyan

Daily News Analysis


12th January, 2023 Polity and Governance

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  • The Union Cabinet, chaired by the Prime Minister (PM) decided to set up a national-level multi-state seed cooperative society under the Multi-State Cooperative Societies (MSCS) Act, 2002.
  • PM stated that efforts need to be made to utilize the strengths of cooperatives and transform them into successful and dynamic business enterprises to recognize the vision of “Sahakar-se-Samriddhi’.
  • PM highlighted that cooperatives hold the key to rural economic transformation in agriculture and allied sectors.

Multi-state seed cooperative society:

  • Cooperatives societies including primary societies, district, state and national level federations and multi-state cooperative societies can become members.
    • Elected representatives of these cooperatives will be on the Board of the society as per laws.
  • It will act as an apex organization for;
    • Production, procurement, processing, branding, labeling, packaging, storage, marketing and distribution of quality seeds.
    • Strategic research and development.
    • Developing a system for the preservation and promotion of indigenous natural seeds.
  • It will work in close cooperation with various cooperative societies across the country.
  • The Initiative will get support from the;
    • Ministry of Agriculture and Farmers Welfare
    • Indian Council for Agricultural Research (ICAR).
    • National Seed Corporation (NSC).
  • The Society will help to;
    • Increase the seed replacement rate.
    • Strengthen the role of farmers in quality seed cultivation and seed variety trials.
    • Increase production and distribution of certified seeds with a single brand name, by utilizing the network of all levels of cooperatives.
    • Increase agricultural productivity and strengthen food security.
    • Increase the income of the farmers.
  • Quality seed production through national-level seed cooperative society will increase agriculture production in the country, and generate more employment opportunities in the agriculture and cooperative sectors.
    • It will also reduce the dependence on imported seeds.
    • It will boost the rural economy.
    • It will promote “Make in India” and lead to Atmanirbhar Bharat.

Ministry of Cooperation

  • The Union Ministry of Cooperation was formed in July 2021.
  • The ministry aims to provide a separate administrative, legal and policy framework for strengthening the cooperative movement in the country.
  • The ministry works to strengthen co-operatives at the grassroots level.
  • Before the creation of the Cooperation ministry, the subjects under this ministry were looked after by the Ministry of Agriculture.
  • The ministry was created with the Vision of:
    • "Sahkar se Samriddhi" (prosperity through cooperation)

    • Promote 'Ease of doing business’' for co-operatives and encourage the development of Multi-State Co-operatives.

Cooperative Societies in India

  • A Cooperative Society can be defined as a voluntary association of individuals united voluntarily to meet their common economic, social, and cultural Interests.
    • It aims to serve the interest of society through the principle of self-help and mutual help.
  • The roots of cooperative Societies in India were sown when the first Cooperative Societies Act was passed in 1904.
  • The Government Passed the Co-operative Societies Act of 1912.
  • In 1958, the National Development Council (NDC) recommended a national policy on cooperatives and the setting up of Cooperative Marketing Societies.
  • National Cooperative Development Corporation (NCDC) was set up under the National Cooperative Development Corporation Act, of 1962.
  • Union Government announced a National Policy on Cooperatives in 2002.
  • The 97th Constitutional Amendment Act of 2011 granted constitutional status and protection to cooperative societies. This Amendment introduced 3 changes in the constitution:
    • It made the right to form cooperative societies a fundamental right (Article 19 ).
    • It included a new Directive Principle of State Policy on the promotion of cooperative societies (Article 43B).
    • It added Part IX-B in the Constitution “The Co-operative Societies” (Articles 243-ZH to 243-ZT).
  • Provisions under the Indian Constitution
    • Indian Constitution under Part IX-B contains various provisions related to cooperative societies.
    • The state legislature may make provisions for the incorporation, election, regulation and winding-up of cooperative societies.
  • Organization Structure
    • The board shall consist of several directors as may be provided by the state legislature, but, the maximum number of directors of a cooperative society shall not exceed 21.
    • The state legislature shall provide for the reservation of one seat for the Scheduled Castes or the Scheduled Tribes and two seats for women on the board of every cooperative society having members from such a category of persons.
  • The functional directors of a cooperative society shall also be the members of the board and such members shall be excluded to count the total number of directors (21).
  • The term of office of elected members of the board and its office bearers shall be 5 years from the date of the election.

Significance of Cooperative Societies:

  • The village cooperative societies provide important inputs for the agricultural sector.
  • Consumer societies meet their consumption requirements at concessional rates.
  • Marketing societies help the farmer to get remunerative prices.
  • The Cooperative processing units help in value additions to the raw products.
  • They also help in building up storage, warehouse, cold storage, rural roads and in providing facilities like irrigation, electricity, transport, education and health.
  • They play the role of a balancing factor between the public and private sectors and also supplement the work of the government and its agencies.
  • Many Cooperative societies have Successfully promoted rural development
    • National Cooperative Development Corporation (NCDC).
    • National Agricultural Cooperative Marketing Federation of India (NAFED).
    • AMUL and Co-operative Rural Development Trust (CORDET).
  • They play an important role in poverty reduction, promoting women's empowerment, and improving literacy rate and skill development.


  • Cooperative Societies usually do not come forward to organize cooperatives of their consensus, many times it is done by the government or local administration.
  • The cooperatives have limited resources.
  • They grant loans only for agricultural operations. Farmers approach the money lenders to meet their other requirements.
  • Lack of co-operation, as the people rarely understand the importance of cooperation in their lives. The absence of willing cooperation on their part hinders the growth of the cooperative movement.
  • Political interference acts as a barrier to the growth of cooperative societies. The selection of beneficiaries is mostly done on political relations.
  • The cooperative credit structure is criticized on the ground that it is mostly managed by landlords and large farmers.
  • Poor performance, increasing debt and overdue, inefficient administration and management of Cooperative societies.

Reforms suggested for strengthening cooperatives;

  • Improve governance including Cooperative principles.
  • Democratic control of Cooperatives.
  • Increasing member participation.
  • Promote transparency
  • Conduct regular elections
  • Improve and Strengthen Policy framework.
  • Adopt International and National best practices.
  • Improve account keeping and auditing.
  • Strengthening infrastructure
  • Ensure access to capital.
  • Diversification of activities.
  • Promoting entrepreneurship, promoting branding, marketing, business plan development, innovation, technology adoption and exports.
  • Focus on Training, Education, knowledge sharing and Awareness.
  • Linking training with entrepreneurship, the inclusion of Women, Youth & Weaker Sections.

Way Forward:

  • Need to ensure transparency in the processes and independence in the functioning of Boards.
  • Good Cooperative management includes setting up clear objectives, accountability, sound planning, and establishing performance evaluation measures.
  • The objectives of the cooperative societies must be recognized in their long-term strategy.
  • Increase access to competitive and affordable external financing.
  • Better operational and financial performance through improved strategic decision-making.
  • Take a comprehensive approach including working with the government, other institutions, and the public.
  • Take a practical, ground-level approach.
  • Improve the decision-making process, and introduce specialists at the board meeting.
  • Put the right people in the right place, and don't let internal organizational structures be politically influenced.

Must Read: https://www.iasgyan.in/daily-current-affairs/cooperatives-in-india