Cooperation Movement

The Cooperative Movement in India started with Cooperative Credit Societies Act 10 of 1904. The agricultural cooperative credit societies were registered under this Act. As this Act did not provide organization of non-credit cooperative societies such as marketing and consumer societies, it was replaced with Cooperative Societies Act of 1912. This Act envisaged promotion of thrift and self help among the agriculturists, artisans who were the persons of limited means and organization of federal and non-credit cooperative societies. After formation of the State of Andhra Pradesh as a result of re-organization of States, the A.P. Cooperative Societies Act VII of 1964 was enacted to meet the requirements of different classes of societies which were felt necessary to promote the economic interest of persons with limited means. This Act came into force from 01-08-1964 as per G.O.Ms.No.1924, Food & Agriculture Department, dated 25-07-1964

Cooperation - Origin of the concept

Cooperation is 'Self-help 'made effective by organization .It means working together by forming an association voluntarily .The word 'Cooperation' is derived from the Latin word 'Cooperari'. The first part of the word 'Co' means 'with' and the second part 'operari' means 'to work'. Cooperation ,therefore ,means working together with others'.

Cooperative technique in our country is as old as human history. Kautilya's Arthasastra maintains that during the days of Mauryan empire ,a village functioned as a social cooperative unit. Works of Public utility such as temples, public halls ,nesting places, dams etc., were constructed by the villagers as a common obligation .Autonomous guilds of workmen and industrial units existed where work was carried on in a cooperative manner.

Historical Evolution

Cooperation as a movement started a product of industrial revolution in Europe. Robert Owen and Dr.William king of England were its partons and through the magazine "The Co-operator" in 1828-30 they emphasized that the "Cooperation is a subject entirely for the working classes and the rich have nothing to do with it" .The pioneers to start a cooperative store for the working classes were 28 flannel weavers of Rochdale in the year 1844 with a small capital of 28 pounds radiating a spirit of association in an individualist age with capitalist ideology of each for himself .Their business principles of one man –one vote ,sale at market place and division of profits among the members (Share holders) in proportion to extent of their patronage are the foundation stones for the present day Cooperative Principles.

Cooperative technique of "all for each and each for all" was adopted in the rural credit system ushered in rural Germany by Raiffeisen. A Postmaster in 1848 at Weyerbusch when he founded a society to distribute potatoes and bread to the poor at cheaper rates while Schulze Mayor of Delitzsch Town started a Loan Society in 1850. In Italy ,Signor Luzzatti started a Friendly Society in Lod ,an urban town in 1865,while the first Rural Bank was started at Lorrefia,a small village by Dr.WollemBurg .Impetus was thus given to the growth of Cooperation as a movement by pubic spirited men and unselfish workers in its cause who considered service important above self .The march of the Cooperative movement in several European Countries led to the establishment of a common forum for them namely International Cooperative Alliance in 1895 to address to its policies and problems .A French the Co-operator by name Charles Fourier designed a flag for The Cooperative Movement ,adopting all the colours of Rainbow and ICA adopted it in 1923.In 1937,ICA formulated Cooperative Principles .They were reformulated by a committee headed by prof.D.G.Karve in 1966.Again in 1995,Prof Ian Macpherson's Committee made a reappraisal and a statement of Cooperative identity with reformulated Principles of Cooperation were adopted by ICA in Manchester Congress.

ICA Statement on the Cooperative Identity :

The International Cooperative Identity Statement (ICIS) with components of definition of Cooperative Society ,Cooperatives Society .Cooperative Values and Principles of Cooperation has been recognized as significant guide post to strengthen the relevance and identity of Cooperatives in the backdrop of marked oriented economy characterized by the pressures and pulls of interdependence, competition and free trade.

Evolution of Cooperative Legislature in India:

Although Cooperation existed in India since the days of Mauryan Rulers as integral part of Indian Cultural ethos characterized by the instinct and tradition of mutual assistance ,joint action .joint possession and joint management of the assets endowed ,successive foreign invasions caused the destruction of self reliant rural economy .Because of the usurious practices of the money lenders and illiteracy of the peasants. These debts went on increasing and became a crushing burden on them .Their misery unleashed Deccan Riots in 1874.The Deccan Riots Commission of 1875 and the Famine Commission of 1880 testified to the unjust character of the debt. Justice Ranade and Sir William Wedderburn formulated a scheme in 1883 for the establishment of a bank in a pune to finance agriculturists for purandar Taluq raising a capital of Rs.10.00 Lakhs to redeem the outstanding debts of Ryots.Madras Government was the first to depute sir Fedrick Nicholson “to study the theory and practice of Agricultural and Land Banks in Europe and to suggest means by which a similar movement may be popularized in India”. His reports issued in 1895 and 1897 and Mr.Dupernex's book on “peoples Bank in Northern India” IN 1900,stimulated then the Government of India to appoint Sir Edward Law Committee to suggest special legislation for cooperative to suggest special legislation for Cooperative Societies .The result was the enactment of Cooperative Credit Societies Act,1904 on 25.03.1904 .which forms the basic structure for Cooperative Legislation in India .it was modeled on the English Friendly Societies Act. Soon Registrars were appointed in Presidencies and major Provinces to organize, register, supervise, adult ,inspect and liquidate Societies when not functioning well. In the preamble the scope of Cooperatives was stated to benefit “Agriculturists .Artisans and other persons of limited means”. This law gave mo legislative protection to Societies for purposes other than Credit or to the Central Agencies. Banks and Unions which were coming into existence. These deficiencies were remedied in the Cooperative Societies Act II of 1912 with the authority conferred by Montague-Chelmsford reforms in 1919. Provincial Governments of Bombay ,Madras, Bengal enacted their own laws to govern Cooperative Societies .These acts widened the scope of the movement substituting in their pramble “for agriculturists ,artisans and persons of limited means” as intended beneficiaries, by the words “agriculturists and other persons with common economic needs “and Better Living. Better Business and Better Methods of Production ,which opened the door to advantage being taken even by men of better means. They also conferred enormous powers on the Registrar, such as compulsory amalgamation and division of Societies .Supersession of erring committees ,surcharge of persons responsible for malfeasance and misfeasance, adjudication of disputes arising in Societies execution of awards and decisions or orders given by him. In Bombay Act of 1925,a provision for constitution of Tribunal to entertain appeals against the orders of Registrar was made.

After independence, the nation adopted the approach of planned economic development for establishment of a mixed economy consisting of three sector namely Public, Private and Cooperative Sectors. Cooperatives were visualized to play the role of a balancing factor between public and private sectors. Pandit Nehru considered Cooperatives as one of the three pillars of Democracy ,the other two being the Panchayat and the School.

When Rural Credit Survey Committee in 1954 recommended for state participation in Cooperatives at all levels. S.T. Raja Committee was appointed by the Government of India to suggest amendments to the Cooperative law the committee prepared a Model Act enabling state participation and appointment of Government nominees on the management of assisted Cooperative Societies .National Development Council in 1958 reviewed Cooperative legislation and advised State Governments to remove restrictive provisions in the Cooperative Law to liberalize it by curtailing certain powers of the Registrar.

In Andhra Pradesh, the above pioneering legislative efforts were followed by the Andhra Pradesh (Andhra Area) Cooperative Societies Act(Act VI) of 1932.The A.P.(Andhra Area) Cooperative Land Mortgage Act of 1934.The A.P.(Telangana Area) Cooperative Societies Act(XVI) of 1952,the Hyderabad Land Mortgage Act,1349 fasli Amalgamation of these acts resulted in Andhra Pradesh Cooperative Societies Act 7 of 1964.

In Response to the recommendations of the Ardhansreeswaran Committee (1987) to democratize and professionalize the Cooperatives and to make the role of the Registrar more positive as a development agent and of the Choudhary Brahm Perkash Committee(1991) to change the role of state as facilitator instead of a regulator and the Model Law set out by the latter, the role of the Government and the Registrar are curtailed in the functioning of the Cooperatives. To facilitate their autonomous and democratic functioning ,the A.P. Mutually Aided Cooperative Societies Act 1995 ( AP MACS Act) is legislated in Andhra Pradesh on the pattern o the Model Act of Choudhary Brahm Perkash.This is a pioneering step and is a trend setter to other States in the country to liberalize their Cooperative laws.

The crisis faced by the Cooperative Credit System in the country at present demanded its restricting and capital infusion. Prof. A.Vaidyanathan's Committee submitted its recommendations on revitalizing the Cooperative Credit System in December 2004.Andhra Pradesh Government was the first to accept the recommendation and to enter into a Memorandum of Understanding (MOU) with the Government of India and NABARD on 29.08.2006.APCS Act 1964 was also amended by an Amendment Act 16 of 2007 whereby the Cooperative Credit Societies identified under the Revival Package will be governed by Special Provisions incorporated under Chapter XIII B and Sections 115 C and 115 D. These provisions facilitate autonomous and democratic functioning of Credit Cooperatives to a great extent subject to the guidelines of RBI and NABARD on different aspects of their functioning .With the capital infusion of about Rs.2,000 Crores expected to be received under the Revival Package of Credit Cooperatives will be in a position to cleanse their balance sheets by wiping out losses and improve their financial position .

Present Status of Cooperatives in India

The movement now has 5.03 Lakh Cooperatives, a membership of 210 Million, a 100% rural network, 67% coverage of Rural Households, 46.31% of Agricultural Credit,23.5% of Fertilizer Production ,51% of Oil Marketed,55% of Handlooms and 62.5% of storage facility at village level. There are 21 National Level Cooperative Federations, 361 State Level Cooperative Federations and 2572 District Level Cooperative Federations in the Country now .There is no sphere of economic activity which is left untouched by Cooperation.