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The concept of Co-Operative Societies in India is rooted in the principles of collective welfare, democratic participation, and economic empowerment of the marginalized. Recognized as an important element of Indian socio-economic planning, Co-Operative Societies play a significant role in rural development, agriculture, and small-scale finance.
Co-Operative Societies in Indian Polity
Co-Operative Societies are voluntary associations of individuals with similar economic interests who come together to promote common goals, especially in the agricultural and rural sectors. Constitutionally recognized and legally regulated, Co-Operative Societies have evolved from the Co-operative Movement of pre-independence times to being part of Part IX-B of the Constitution after the 97th Constitutional Amendment.
Co-Operative Societies Overview
The importance of Co-Operative Societies has increased over the years due to their role in empowering farmers, self-help groups, and small producers. With the introduction of the 97th Constitutional Amendment, their status became constitutionally recognized, laying down principles of democratic management and autonomy.
Overview of Co-Operative Societies | |
| Feature | Details |
| Constitutional Recognition | 97th Constitutional Amendment Act, 2011 |
| Constitutional Part | Part IX-B (Articles 243ZH to 243ZT) |
| Subject in Constitution | State List (Entry 32, List II, Seventh Schedule) |
| Objective | Democratic, autonomous, and voluntary associations |
| Recent Update | SC struck down Part IX-B’s application to states (2021) |
Co-Operative Societies – Constitutional Provisions in Detail
The Co-Operative Societies gained constitutional backing through the 97th Amendment, which added Part IX-B to the Constitution, laying out a framework for their democratic functioning, composition, elections, and audits.
Co-Operative Societies – Constitutional Provisions in Detail | |
| Article | Provision Regarding Co-Operative Societies |
| Article 243ZH | Definitions related to Co-Operative Societies |
| Article 243ZI | Right of states to legislate on Co-Operative Societies |
| Article 243ZK | Direct election to the board of Co-Operative Societies |
| Article 243ZL | Supersession and suspension of board – limited duration |
| Article 243ZN | Audit of accounts by certified auditors |
| Article 243ZT | Transition provisions for existing laws |
Co-Operative Societies – 97th Constitutional Amendment Act, 2011
The 97th Constitutional Amendment was a significant step in uplifting the status of Co-Operative Societies by providing constitutional recognition and clearly defining their rights and responsibilities. However, the amendment’s application was partially struck down in 2021.
Co-Operative Societies – 97th Constitutional Amendment Act, 2011 | |
| Aspect | Detail |
| Objective | Promote voluntary formation, autonomous functioning, and democratic control |
| Added Article | Article 19(1)(c) – Right to form Co-Operative Societies |
| New Part in Constitution | Part IX-B (Articles 243ZH to 243ZT) |
| Verdict by SC (2021) | Struck down application to states (violation of federalism) |
| Status Now | Only applicable to Multi-State Co-Operative Societies |
Co-Operative Societies – Role in Indian Economy and Governance
The Co-Operative Societies are vital for inclusive economic growth and decentralization of planning. From agricultural marketing to dairy farming, from housing to small credit, Co-Operative Societies have filled gaps left by traditional institutions.
Co-Operative Societies – Role in Indian Economy and Governance | |
| Sector | Role of Co-Operative Societies |
| Agriculture | Input supply, irrigation, credit support |
| Rural Credit | Rural cooperative banks and societies |
| Dairy and Fisheries | Amul model and other co-operatives empower producers |
| Housing | Affordable housing initiatives in urban and rural areas |
| Weaker Sections | SHGs and women’s cooperatives promote empowerment |
Co-Operative Societies – Comparison Between State and Multi-State Societies
Understanding the distinction between state and multi-state Co-Operative Societies is essential for UPSC as the legal and administrative structure varies significantly.
Co-Operative Societies – Comparison Between State and Multi-State Societies | ||
| Feature | State Co-Operative Society | Multi-State Co-Operative Society |
| Law Applicable | State Co-operative Societies Act | Multi-State Co-operative Societies Act, 2002 |
| Jurisdiction | Within a single state | Across two or more states |
| Registrar | State Registrar | Central Registrar |
| Constitutional Validity | Part IX-B applicability struck down (2021) | Still valid under Centre’s control |
Co-Operative Societies – Challenges and Reforms Needed
Despite their importance, Co-Operative Societies face multiple challenges, including political interference, lack of autonomy, poor professional management, and audit irregularities. Reforms are required to enhance their efficiency and democratic nature.
Co-Operative Societies – Challenges and Reforms Needed | |
| Challenge | Suggested Reform |
| Political Interference | Free and fair board elections |
| Lack of Professionalism | Training and capacity building |
| Corruption and Mismanagement | Transparent audit and digital tracking systems |
| Fragmented Legal Framework | Uniform central legislation (model law) |
| Financial Irregularities | Strengthen NABARD oversight |
Co-Operative Societies – FAQs
What are Co-Operative Societies in the Indian Constitution?
Co-Operative Societies are voluntary, democratic economic associations governed under Part IX-B of the Constitution (added by the 97th Amendment).
Which articles deal with Co-Operative Societies?
Articles 243ZH to 243ZT under Part IX-B deal with Co-Operative Societies.
Why was the 97th Amendment partially struck down?
The Supreme Court ruled in 2021 that the amendment needed ratification by half the states since Co-Operative Societies fall under the State List.
What is the difference between State and Multi-State Co-Operative Societies?
State societies operate under state law and jurisdiction; multi-state societies operate under central law and across state boundaries.
Are Co-Operative Societies important for UPSC?
Yes, Co-Operative Societies are important for Polity (Constitutional Amendments), Governance, and Economy sections of UPSC Prelims and Mains.
Which amendment added Co-Operative Societies to the Constitution?
The 97th Constitutional Amendment Act, 2011.
Can Co-Operative Societies be formed under Fundamental Rights?
Yes, Article 19(1)(c) includes the right to form Co-Operative Societies after the 97th Amendment.
