Governance & Social Justice GS Paper II (Important Aspects of Governance,Transparency and Accountability) by Abhishiekh Saxena Sir 

Approach:

• In the introduction, give a brief definition of Cooperative societies (25 Words)
• Mention the Constitutional provisions, significance, and challenges of cooperatives in India (50 Words)
• Enumerate the potential positive impacts of the Ministry. Discuss whether the step affects federalism in India. (50 Words)
• Way Forward and Conclusion (25 Words)

Hints:

A cooperative society is a voluntary association of individuals having common needs who join hands for the achievement of common economic interests. The 97th Constitutional Amendment was a major step towards infusing autonomy, democratic functioning, and professional management in cooperative societies.  It is being hoped that the newly created Ministry of Cooperation will give a necessary push to the system and will act as a force multiplier.

Cooperative societies in India:

• There are many types of cooperatives such as Consumer Cooperative Society, Producer Cooperative Society, Credit Cooperative Society, Housing Cooperative Society and Marketing Cooperative Society.
• Article 19(1) (c) under Part III of the Constitution enables all the citizens to form cooperatives by giving it the status of the fundamental rights of citizens.
• Article 43B was added in the Directive Principles of State Policy (Part IV) regarding the “promotion of cooperative societies”
• The Constitution (97th Amendment) Act, 2011 added a new Part IXB right after Part IXA (Municipals) regarding the cooperatives working in India.
• In India, a Co-operative based economic development model is very relevant where each member works with a spirit of responsibility. Its significance can be seen as:
  • It protects vulnerable farmers from market distortion
  • It leads to decentralized development
  • Successful cooperative business Models like Dairy and Fertilizers are good examples of the potential of cooperatives
• However, the cooperative movement in India suffers from challenges like:
  • Mismanagement and Manipulation,
  • Lack of Awareness,
  • Restricted Coverage,
  • Inadequacy of trained personnel, etc.

Potential positive impacts of Ministry of cooperation:

• This ministry will provide a separate administrative, legal, and policy framework for strengthening the cooperative movement in the country. It will help deepen Co-operatives as a true people-based movement reaching up to the grassroots and to realize the vision of "Sahakar se Samriddhi" (prosperity through cooperation).
• The Ministry will work to streamline processes for ‘Ease of doing business’ for co-operatives and enable the development of Multi-State Co-operatives (MSCS).
• Various studies conducted by institutions like Vaikunth Mehta Institute of Cooperative Management have shown the cooperative structure has managed to flourish and leave its mark only in a handful of states like Maharashtra, Gujarat, Karnataka etc. Under the new Ministry, the cooperative movement would get the required financial and legal power needed to penetrate into other states also
• Ministry of Cooperation may ensure lower political interference at local level in the operation of cooperatives 

Effect of the step on federal polity of India:

• Encroachment upon stare list: Critics argue that the creation of a new cooperation ministry is an infringement upon the federal rights of the state governments. This amounts to challenging the federal system of our country.
• It is being seen as yet another instance by the Centre attempting to gain control over grassroots institutions, especially in Opposition-ruled states, and undermining the principles of federalism.
• Recently, the Supreme Court struck down parts of the 97th Constitutional Amendment which shrank the exclusive authority of States over their cooperative societies. The court held that cooperative societies come under the “exclusive legislative power” of State legislatures.
• One Size Fits All approach: Cooperatives are envisaged as autonomous organizations with minimal state intervention. The creation of a central ministry for a top-down intervention in the cooperative sector is an antithesis to the fundamentals of cooperatives.

Conclusion

All stakeholders including the government, institutions for cooperative development, and the entire cooperative movement will need to collaborate to achieve the aim of community- and people-centric development involving modern business practices at the local and national level. The new Ministry of Cooperation can work towards bringing in professionalism in cooperatives and make them more competitive.