Q.) What is the significance of cooperative insurance economic development of a country? Discuss the challenges faced by Cooperative in India and the steps taken by government to strengthen the Cooperative movement. (52 BPSC/2009)

Ans- According to International Labour Organization, a cooperatives society is the independent association of people united willfully to meet the social monetary, and social requirements through mutually claimed and fairly controlled.

Two basic principles on which the cooperative society is standing are–

1. Principle of collectiveness.
2. Principle of well-established democracy.

Features of cooperative society–

1. Common economic goal.
2. Element of self-help.
3. Elimination of intermediaries.
4. Inclusive participation.
5. All for each and each for all.
6. Element of service and profit.
7. Open for all.

The legal lacking of cooperative societies started way back in 1904 with the formation of the “Cooperation credit societies act”.

After independence with the Recommendation of the National Development Council in 1953, there was the formation of the Indian Cooperative development Council in 1965.

97th Constitutional Amendment Act, 2011 added provisions like–

1. 19(1) – “cooperative society”
2. 43(B) – DPSP – State two stripes to form voluntary Association, autonomous functioning, democratically controlled and professionally managed – cooperative societies.
3. Part IX B – 243 ZH to 243 ZT. The larger benefit of cooperative societies is–
4. The need for profitability is balanced by two individual needs and the larger benefit of the community.
5. The mutual benefit of the members.
6. cooperation and grouping increase the strength to bargain the buying and selling of services.

The role of a cooperative society in the socio-economic development of the country is–

1. It has reached The Grass root level and has helped the poor, illiterate, and unskilled to form Union on the principle of “mutual assistance”.
2. Today there are 8.5 lakh Cooperative sweet 22 crore members in it.
3. India is the largest producer of milk in the world, contributing alone 22% of the world’s milk production. Reasons behind the growth of primary milk Cooperative like Amul.
4. Growth of primary agriculture credit society (PACS).
5. Only these two cooperative societies touch the hundred percent of the village and 75% of the rural population.
6. Cooperative societies have helped in providing concessional agricultural inputs to farmers that private sectors could not reach.
7. It has also held in providing agricultural loans and funds.
8. It helps in the development of infrastructure– Grains godown, cold storage, transport, irrigation, etc.
9. Cooperative banks have held in providing cheap loans to the members.

Apart from economic benefits, the cooperative societies have significantly held social building like–

1. Promotes cohesiveness and Unity.
2. Inclusive irrespective of caste religion etc. has removed the social leakages.
3. Promotes ethical values like truthfulness, trust, collective share, and ease.

Challenges in a cooperative society are–

1. Lack of governance– the board members are responsible and lack accountability.
2. Lack of capital– the capital is only shared by the members.
3. Lack of active members– often exit of members, lack of communication among the members.
4. Cost of competitiveness– overstuffing the board and entry of MNCs has led to a cooperative society in competitive.
5. Corruption– in the board and cooperative banks.
6. All functioning of cooperative banks– the np-a of cooperative banks are more than commercial banks.

Steps were taken by the government–

1. Bringing of urban cooperative banks and Multi-State Cooperative under money laundering act 2002.
2. The cooperative banks have come under the order of RBI.
3. The formation of a separate Ministry of Cooperation aims to take Cooperative to the Grass root level and to make them in line with the ease of business.
4. The area/ region untouched by Cooperatives, their cooperative society is found formed by the ministry of cooperatives.
5. Aims to bring accountability, efficiency, and time-based election of members.

Way, forward we need to increase the Awareness of cooperative society, and also, we need to increase the education to understand the better function of the cooperative. we also need to increase the agricultural diversity to enhance the role of cooperatives. many Cooperative needs to spread in the north and northeast which is confined to western India.