India is home to a unique movement called ‘cooperatives’ which involves citizens and their democratic involvement at a grassroot level. A cooperative society is an organization owned and run by the people and for the people using its goods and services. As the name suggests, the people or members of the organization work in cooperation to pool resources for their common benefit and progress. Cooperative societies in India were first formed in late 1890s when farmers in western Maharashtra rebelled against money lenders’ tyranny for agricultural loans. In 1904, the British government in India enforced the Cooperative Society Act, to safeguard interests of poor farmers in Maharashtra.
After Independence, this ‘cooperative movement’ in India gained momentum. The government realised that the cooperative sector plays a significant role in boosting the rural economy. It provisioned for plans for this sector in its Five Year Action Plans. Every village was encouraged to have at least one cooperative society. It also helped setting up cooperative farms. From agricultural markets, these Cooperative societies in India expanded to credit sector, and later to other large-scale sectors, housing and development, fishing markets, banking, etc. This led to formation of different types of co-operative societies.
Economic growth and the increase in disposable incomes have played an important role in the growth of cooperatives in India. However, there are reasons on the micro level such as certain decisions, good execution, policies and procedures, among others, which are the key reasons behind the success of cooperatives.
