{"id":70641,"date":"2026-04-01T18:26:13","date_gmt":"2026-04-01T12:56:13","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=70641"},"modified":"2026-04-01T18:30:34","modified_gmt":"2026-04-01T13:00:34","slug":"cooperative-movement-india","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/01-04-2026\/cooperative-movement-india","title":{"rendered":"Cooperatives of India"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Centre has\u00a0 informed Lok Sabha that of the<strong> 8.48 lakh societies, 2.11 lakh are in loss, 1.41 lakh non-functional and 47,688 under liquidation.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Major Highlights<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Only 3.49 lakh cooperatives are in profit.<\/strong><\/li>\n\n\n\n<li><strong>Uttar Pradesh<\/strong> has the highest percentage of defunct societies at 41.8% , followed by Madhya Pradesh, Rajasthan, Andhra Pradesh and West Bengal.\n<ul class=\"wp-block-list\">\n<li>The condition of smaller States is even worse Nagaland (72.7%), Delhi (67.1%), Sikkim (55.3%), Manipur (52%) and Chandigarh (46.4%).<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Among the top ten States<\/strong> with the highest number of cooperatives, southern and western States Maharashtra, Gujarat, Tamil Nadu, Karnataka and Telangana have managed to keep most of their societies afloat.\n<ul class=\"wp-block-list\">\n<li>West Bengal, U.P., Madhya Pradesh, Rajasthan have at least 25% of their societies defunct.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>The five States with the largest number of cooperatives<\/strong> are Maharashtra, Gujarat, Telangana, Karnataka and Madhya Pradesh amount to <strong>93.44% of societies under liquidation.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Why are Cooperatives Performing Badly?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Dairy Cooperatives<\/strong>: Act as income stabilizers for farmers, but post-COVID price crashes hurt viability; despite a 25% production rise, rising input and procurement costs due to climatic and global factors continue to strain the sector.<\/li>\n\n\n\n<li><strong>Housing Cooperatives:<\/strong> Facing financial stress due to losses in scam-hit cooperative banks, along with internal issues like non-payment of dues, fund mismanagement, and delays in redevelopment.<\/li>\n\n\n\n<li><strong>Credit &amp; Thrift Societies: <\/strong>Weak regulation and small financial base lead to arbitrary lending practices, high interest burdens, and increased vulnerability due to scams and poor governance.<\/li>\n\n\n\n<li><strong>Women\u2019s Cooperatives:<\/strong> Growth constrained by limited financial access, social barriers, lack of networks, and high work-life stress, restricting effective participation and entrepreneurship.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What are Cooperatives?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A cooperative (or co-op) is an <strong>organization or business<\/strong> that is <strong>owned and operated by a group of individuals<\/strong> who share a common interest, goal, or need.\u00a0<\/li>\n\n\n\n<li>These <strong>individuals<\/strong>, <strong>known as members<\/strong>, participate in the cooperative&#8217;s activities and <strong>decision-making process<\/strong>, typically on a one-member, one-vote basis, regardless of the amount of capital or resources each member contributes.\u00a0<\/li>\n\n\n\n<li>The main purpose of a cooperative is <strong>to meet the economic, social, or cultural needs of its members, <\/strong>rather than to maximize profits for external shareholders.<\/li>\n\n\n\n<li>The <strong>UN SDGs recognize cooperatives as crucial drivers of sustainable development<\/strong>, particularly in reducing inequality, promoting decent work, and alleviating poverty.\u00a0<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img data-dominant-color=\"d9dfe6\" data-has-transparency=\"false\" style=\"--dominant-color: #d9dfe6;\" loading=\"lazy\" decoding=\"async\" width=\"381\" height=\"396\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2026\/04\/image-3.png\" alt=\"\" class=\"not-transparent wp-image-70642\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2026\/04\/image-3.png 381w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2026\/04\/image-3-289x300.png 289w\" sizes=\"auto, (max-width: 381px) 100vw, 381px\" \/><\/figure>\n<\/div>\n\n\n<p><\/p>\n\n\n\n<div class=\"wp-block-group has-background\" style=\"background-color:#fff2cc\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<p><strong>97th Constitutional Amendment Act 2011<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It established the right to form cooperative societies as a <strong>fundamental right (Article 19).<\/strong><\/li>\n\n\n\n<li>It included a <strong>new Directive Principle of State Policy<\/strong> on the <strong>Promotion of Cooperative Societies (Article 43-B).<\/strong><\/li>\n\n\n\n<li>It added a new <strong>Part IX-B to the Constitution<\/strong> titled <strong>\u201cThe Co-operative Societies\u201d (Articles 243-ZH to 243-ZT).\u00a0<\/strong><\/li>\n\n\n\n<li>It authorizes the <strong>Parliament to establish relevant laws<\/strong> in the case of <strong>multi-state cooperative societies (MSCS)<\/strong> and state legislatures in the case of other cooperative societies.<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Benefits of Cooperatives<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Democratic Control: <\/strong>Members have a voice in decision-making.<\/li>\n\n\n\n<li><strong>Economic Participation:<\/strong> Profits are distributed based on usage or contribution, not capital invested.<\/li>\n\n\n\n<li><strong>Community Focus: <\/strong>Co-ops often aim to benefit local communities by keeping resources and profits within the group.<\/li>\n\n\n\n<li><strong>Better Services\/Prices<\/strong>: By pooling resources, cooperatives often offer better services or prices than for-profit businesses.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Types of Cooperatives in India<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Agricultural Cooperatives:<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Dairy Cooperatives:<\/strong> Focus on the collective production, processing, and marketing of dairy products (e.g., Amul).<\/li>\n\n\n\n<li><strong>Farmers&#8217; Cooperatives: <\/strong>Provide services like access to seeds, fertilizers, and agricultural equipment, and help with marketing and processing crops.<\/li>\n\n\n\n<li><strong>Fishermen Cooperatives: <\/strong>Support fishermen in managing resources and marketing their catch collectively.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Consumer Cooperatives: <\/strong>These cooperatives are formed to provide goods and services to members at reasonable prices, reducing reliance on middlemen. Examples include consumer stores and fair-price shops.<\/li>\n\n\n\n<li><strong>Worker Cooperatives: <\/strong>In these cooperatives, workers own and manage the business, sharing profits and decision-making. Examples include small-scale manufacturing cooperatives or artisan co-ops.<\/li>\n\n\n\n<li><strong>Credit Cooperatives:<\/strong> Cooperative Banks and Credit Societies offer financial services, such as savings accounts, loans, and credit, to members, particularly in rural and underserved areas.<\/li>\n\n\n\n<li><strong>Housing Cooperatives: <\/strong>These cooperatives help members collectively build or manage housing projects, providing affordable living spaces, especially in urban areas.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Challenges Faced:<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Weak Governance:<\/strong> There are issues of poor management, corruption, and political interference, leading to inefficiency and lack of transparency.<\/li>\n\n\n\n<li><strong>Limited Access to Credit:<\/strong> Many cooperatives struggle with access to financing, which hinders their ability to expand or improve their operations.<\/li>\n\n\n\n<li><strong>Competition from Private Sector: <\/strong>Cooperatives often face stiff competition from large private enterprises and multinational corporations, especially in sectors like retail and agriculture.<\/li>\n\n\n\n<li><strong>Technological Gaps: <\/strong>Many cooperatives, especially in rural areas, lack access to modern technology or are slow to adopt new systems that could improve efficiency.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Legal Framework and Support for Cooperatives:<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In India, cooperatives are governed by the <strong>Cooperative Societies Act,<\/strong> which is implemented at both the state and national levels.\n<ul class=\"wp-block-list\">\n<li><strong>The Multi-State Cooperative Societies Act (2002): <\/strong>This law regulates cooperatives that operate in more than one state.<\/li>\n\n\n\n<li><strong>The National Cooperative Policy (2002):<\/strong> Aimed at creating an enabling environment for the cooperative movement, it focuses on improving governance, member participation, and financial sustainability.<\/li>\n\n\n\n<li><strong>The Ministry of Cooperation: <\/strong>Established in 2021, this ministry focuses on supporting the growth of cooperatives in India, including reforming their governance and providing financial support.<\/li>\n\n\n\n<li><strong>National Cooperation Policy 2025: <\/strong>It aims to build on the unique strengths of India\u2019s cooperative tradition, promote economic democratization, and uplift rural economies through collective participation.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"8fa5bf\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"578\" height=\"283\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2026\/04\/image-4.png\" alt=\"\" class=\"not-transparent wp-image-70643\" style=\"--dominant-color: #8fa5bf; width:545px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2026\/04\/image-4.png 578w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2026\/04\/image-4-300x147.png 300w\" sizes=\"auto, (max-width: 578px) 100vw, 578px\" \/><\/figure>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\"><strong>Way Ahead<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Cooperatives in India have proven to be an essential tool for economic empowerment, especially for marginalized groups, and contribute significantly to rural development.\u00a0<\/li>\n\n\n\n<li>With the rollout of the National Cooperation Policy, 2025, the Centre has shown intent to strengthen the cooperative system in India.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.thehindu.com\/news\/national\/cooperatives-of-india4705-of-indias-societies-defunct-under-liquidation-or-in-loss\/article70768667.ece\" target=\"_blank\" rel=\"noopener\"><strong>TH<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong> Context <\/strong><\/p>\n<li class=\"ms-5\"> Centre has\u00a0 informed Lok Sabha that of the8.48 lakh societies, 2.11 lakh are in loss, 1.41 lakh non-functional and 47,688 under liquidation. <\/li>\n<p><\/p>\n<p><strong> Major Highlights <\/strong><\/p>\n<li class=\"ms-5\"> Only 3.49 lakh cooperatives are in profit. <\/li>\n<li class=\"ms-5\"> Uttar Pradesh has the highest percentage of defunct societies at 41.8% , followed by Madhya Pradesh, Rajasthan, Andhra Pradesh and West Bengal. <\/li>\n<li class=\"ms-5\"> The condition of smaller States is even worse Nagaland (72.7%), Delhi (67.1%), Sikkim (55.3%), Manipur (52%) and Chandigarh (46.4%). <\/li>\n<p><a href=\" https:\/\/www.nextias.com\/ca\/current-affairs\/01-04-2026\/cooperative-movement-india \" class=\"btn btn-primary btn-sm float-end\">Read More<\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-70641","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/70641","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=70641"}],"version-history":[{"count":3,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/70641\/revisions"}],"predecessor-version":[{"id":70652,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/70641\/revisions\/70652"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=70641"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=70641"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=70641"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}