Poll Body for Cooperatives in India
Polity & Governance
18th Apr, 2022
Union minister for cooperatives had mentioned to conduct elections for the cooperative societies to be conducted by the Election commission of India.
- In lieu of this a 2-day National conference has been conducted on National Cooperation Policy.
What are cooperatives?
According to ILO, a cooperative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.
Constitutional provisions for cooperatives:-
- It established the right to establish cooperative societies as a fundamental right (Article 19).
- It featured a new Directive Principle on State Policy on the Promotion of Cooperative Societies (Article 43-B2).
- It created a new Part IX-B to the Constitution called "Co-operative Societies" (Articles 243-ZH to 243-ZT)
History of cooperative movement
- Pre-independence India-The Famine Commission of 1901 strongly advocated that agriculturists be given loans to boost agriculture to prevent famine. The Co-operative Society Act was passed in 1904.
- Co-operation became a provincial subject with the Montague-Chelmsford Act of 1919, which boosted the movement's momentum.
- First co-operative land mortgage banks were established in Punjab, followed by land mortgage banks in Madras (1925) and Bomaby (1926).
- The Indian Central Banking Enquiry Committee (1931)pointed out the obvious flaws, particularly about unnecessary delays and credit shortages. Meanwhile, the Madras Co-operative Societies Act of 1932 and the Madras Co-operative Land Mortgage Banks Act of 1934 went into effect.
- Post-independence India-
- Cooperatives formed an important feature of Five-Year Plansafter the country gained independence. Cooperatives, together with the Panchayat and schools, were considered one of the three foundations of democracy by Pandit Jawaharlal Nehru.
- National Policy of Cooperatives: In 1958, the National Development Council (NDC) suggested a national cooperative policy, as well as staff training and the formation of Cooperative Marketing Societies. In 2002, the Indian government announced a National Policy on Cooperatives.
- The National Cooperative Development Corporation (NCDC) was established in 1962 as a statutory corporation under the National Cooperative Development Corporation Act.
- Co-operative societies now have constitutional status and protection thanks to the 97th Constitutional Amendment Act of 2011.
Features of Cooperatives in India
The following provisions concerning cooperative societies are found in Part IX-B of the constitution;
- The state legislature may enact measures for the incorporation, regulation, and winding-up of co-operative organizations based on the principles of voluntary formation, democratic member control, member economic involvement, and independent operation.
- Members of the Board of Directors and their terms of office: The board will be made up of the number of directors determined by the state legislature. However, a co-operative society's maximum number of directors cannot exceed twenty-one.
- Every co-operative society with members from such a category of persons shall have one seat reserved for the Scheduled Castes or Scheduled Tribes and two seats reserved for women on the board of directors, as determined by the state legislature.
- The board's elected members and office bearers will serve for five years from the date of their election.
- Election of Board Members: A board election must be held before the expiration of the board's term to ensure that the newly elected members take office immediately after the term of the outgoing board members has expired.
- The production of electoral rolls and the conduct of elections to a co-operative society shall be under the supervision, guidance, and control of such a body as the state legislature may provide.
- Accounts of Co-operative Societies: The state legislature may make provisions for co-operative societies to keep accounts and have them audited at least once a year and every co-operative society must have its finances audited (within six months of the financial year's end) by an auditor or auditing firm appointed by the co-operative society's general body.
- Returns:Every co-operative society must file returns to the body designated by the State Government within six months after the end of each financial year.
- Offences and Penalties:The state legislature has the authority to enact laws for co-operative society offenses and penalties for the acts such as willfully submitting a false return or providing false information.
- Application to Multi-state Co-operative Societies: The provisions of the chapter shall apply to multi-state co-operative societies with the modification that any reference to the "State Legislature," "State Act," or "State Government" shall be understood as a reference to "Parliament," "Central Act," or "Central Government," respectively.
- Union Territory:The rules of this section apply to Union territories. However, the President may indicate in the notification that the provisions of this paragraph do not apply to any Union territory or part thereof.
Ministry of Cooperation
- · The Central Government recently established a distinct ‘Ministry of Co-operation' to realize the aim of ‘Sahakar se Samriddhi' (Prosperity via Cooperation) and to revitalize the cooperative movement.
- · The new ministry's goal is to establish a legal, administrative, and regulatory framework that will make it easier for cooperatives to do business and aid the formation of "multi-state cooperative societies."
- · The focus is on transitioning cooperatives from small to large businesses, which is aided and sustained by allowing businesses to overcome entry and growth constraints.
Need of elections in cooperatives
- To ensure transparency- cooperatives need elections conducted in free and fair manner to ensure transparency in the system.
- It has been noted that most of the cooperatives have members nominated and political biased representation can be seen.
- Adequate representatives from the region- each community in the region living should get representation in any organisation for equal rights and everybody should be heard.
- Popular representation- the elections conducted by the election commission of India by participation of every individual in the region will help to get their popular elected representative amongst themselves for better working of cooperatives.
- Rural issues to be heard- the person elected should have local knowledge of the region and culture with agricultural needs of that region. Most of the states like Maharashtra, Orissa, Gujarat, Madhya Pradesh are major states which are benefitting from the cooperatives in rural areas.
- Financial transparency- the funds allocated from banks and to individual representatives for distribution will be in the right hands as he/she will be responsible to the people.
Issues faced by cooperatives in India
- Government Interference-The administration has taken a patronizing stance toward the cooperative movement from the start. Co-operative institutions were handled as if they were an integral component of the government's administrative structure.
- As a result, government intervention became an important part of how these organizations functioned and thus, the movement’s independence and self-reliance existed only on paper and files. It was not given the proper importance that it deserves in any plan and has not become a full-fledged people movement.
- Mismanagement and Manipulation- The co-operative movement's central idea is that it elevates farmers to the level of shareholders and provides them with agricultural, educational, and medical services. Farmers, sometimes, find it difficult to manage the institutions with large shareholder strength.
- Lack of Awareness- People are unaware of the movement's goals, the contributions it can make to society's reconstruction, and the norms and regulations that govern co-operative institutions. Regrettably, no concerted attempts have been undertaken in this direction. People regard these institutions as a means of gaining government benefits and concessions.
- Restricted Coverage-The co-operative movement has also been hampered by two major operational constraints.
- One is that these cultures have been quite modest in size.
- The other is that the majority of these societies have only a few members and operate in only one or two locations.
- As a result, their resources are limited, making it difficult for them to develop their capabilities and broaden the scope of their operations.
- Functional Weakness-Since its start, the co-operative movement has struggled with a lack of skilled workers. Two key issues have contributed to the shortage of trained employees.
- First and foremost, there had been a dearth of institutions dedicated to training workers.
- Second, due to the inadequate performance of cooperative institutions, efficient individuals were not drawn to or driven by them.
- Flaws in operation-Co-operative societies, too, have several flaws in their operation. They have been unable to progress along healthy lines due to this deficiency. As a result, there are several pitfalls.
- The limiting issues include poor infrastructure, poor administration, overdependence on government, dormant membership, non-conduct of elections, a lack of solid human resources, policy, and a lack of professionalism, among others.
- Co-operatives in India are also unable to develop effective communication and public relations strategies that promote the concept of collaboration among the general population.
- In 2013, the Gujarat High Court ruled that the amendment was likely to be struck down since it was passed without the assent of one-half of the state legislatures, as required under Article 368(2) of the Constitution.
- According to Article 368(2), ratification of one-half of state legislatures is required for an amendment that makes changes to an entry in the state list.
- The exclusive legislative power granted to states in issues covered by the Second List of the Seventh Schedule is a key constitutional concept enshrined in the Constitution's basic framework.
Cooperatives play a vital role in encouraging collectivism and sustaining the country's social capital basis. Cooperatives are the most effective means of preserving the spirit of collectivism and democracy.