Chapter II.

Review of Literature on Cooperative Movement

Contents

2.1 Introduction
2.2 Genesis & Evolution of Cooperation.
2.3 Definition of Cooperation
2.4 Characteristics of Cooperative Enterprise
2.5 Principles of Cooperation
2.6 Principles of Cooperation for the 21"^ century
2.7 Economic Development Through Cooperation
2.8 History of The Cooperative Movement
2.8.1 The Cooperative Movement inthe World
2.8.2 The Cooperative Movement in India
2.8.2.1 The First Stage ofthe Movement
2.5.2.2 The Second Stage (1912-1918); Period of Hurried Expansion.
2.8.2.3 The Third Stage (1919-1929): Period of Unplanned Expansion
2.5.2.4 The Period ofRecovery (1939-1946)
2.8.2.5 Cooperation During the Planning Era
2.9 The Cooperative Movement in Maharashtra
2.9.1 The Pre-Cooperative Stage (1870-1903)
2.9.2 The InitialStage (1904-1911)
2.9.3 The Evolution Stage (1912-1924)
2.9.4 The Stagnation Stage (1925-1947)
2.9.5 The Grov\th Stage (1948-1961)
2.9.6 The Diversification Stage (1962 onwards)
2.10 The Progress of The Cooperative Movement in Maharashtra
2.10.1 Number ofCooperative Societies inMaharashtra
2.10.2 District-wise Distribution of Cooperati\e Societies
2.10.3 Number of Members
2.10.4 Working Capital
2.10.5 Advances
2.10.6 Outstanding Loans
2.10.7 Turnover ofProduced Goods Sold

23
 2.10.8 Important Characteristics of Cooperative Societies
2.11 Progress of The Cooperative Movement in Maharashtra & Nashik District.
2.11.1 Progress ofCooperative Societies inNashik District
2.11.2 Recent Status of Cooperative Societies inNashik District
2.11.3 Types & Important Characteristics of Productive Enterprises & Social
Services Cooperative Societies
2.12 Organisation of the Department of Cooperation in Maharashtra.
2.13 Law of the Cooperatives

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 Chapter II.
Review of Literature on The Cooperative Movement

2.1 Introduction
Cooperalion is a joint or collective action of people directed towards some
specified goal in which there is common interest or hope of getting some reward.
Such cooperation may be volunlarv^ or involuntary', direct or indirect, fonnal and
infonnal but there always is a combination of efforts towards a specific end in which
all the participants have a stake, real or imagined.’
Cooperation is one of the “economic miracles of the last century. Cooperation
touches everyone’s life directly or indirectly^ the house we may be staying in, or the
shop we conduct our business from may be a cooperative society. The tea that we
drink has sugar and milk in it. In all possibilities the sugar has come from a
cooperative sugar factor}^ and the milk from a dairy cooperative. The clothes that w'e
wear may be from a cooperative textile mill.
Cooperation means working together in cooperation with each other.. The
principle of cooperation isas old as the human society itself Aristotle, a philosopher
of ancient Greece, recognised the social nature of man when he said, “Man is a social
animal.”^. Man carmot leave a happy and contented life in isolation. Community
living isa basic need ofhuman life.
Man’s evolution has not been competitive in term of aggression as has been
supposed by Darwin and his followers. It has been competitive in terais of
cooperation Man is now considered to be essentially cooperative rather than
aggressive in character.
The activity of cooperation is as old as humanity'. From the most primitive to
the most sophisticated community' throughout the world w'e come across some or the
other from of cooperation among the people living in a particular area or region be it
for some agricultural operations or for social, economic or political activity.
Cooperation has righth been regarded as one of the least noticed economic miracles
of the last centur)
In the Bhagwat Puran individual ownership is pemiitted only to the
requirement of food. The cooperati\e element in the communit\ life in India was

25
represented by the joint family system. I’he ancient India scripture-the Rigveda
states.^
“May you all have common purpose.
May your hearts be in unison.
May you all be of the same mind.
So that you can do work efficiently well."

The object of cooperating in this way is for the economic and social betterment of
persons who so cooperate; “Cooperation helps w^eaker persons to escape from such
exploitation by enabling them be become their own lenders or merchants or
employers or traders. Ithelps them to gain the advantage of large scale cooperation,
while maintaining their independence.”^
2.2 Genesis & Evolution of Cooperation.
“Cooperation” is derived from the Latin word ‘Cooperari/ where “co” means
with and “operari” means to work. In other words, cooperation "means working
together with each other for a common purpose.”
The origin of cooperation is shrouded in mystery. But it is surmised that it has
been the child of necessity that has developed in different countries along different
lines. The most accepted view isthat ithas been the result ofIndustrial Revolution in
the west, particularly in Great Britain, which brought about conditions of perpetual
class conflict, labour unrest and pauperism - a class of proletariats, property less,
money less and home less as would be evidenced by the extracts reproduced below-
E.G. Nourse has observed, “the cooperative movement grew out of the
circumstance of the Industrial Revolution, capitalism and the attendant irrational
equality and was a reaction against early abuses or at least rigours of the capitalistic
industrial system”^ The Kautilya’s Arthashastra states “Whoever slays away from any
kind of cooperative undertaking shall send his servants to carry the work, shall have a
share in the expenditure but none in the profits.”
Cooperation as a new philosophy, therefore, developed in opposition to
capitalism and irrational inequality - the base of capitalism. Cooperation was
conceived as the answer to the injustices of capitalism and was developed as its
antidote, poorer men saw in it a price advantage, economists a new incentive to
efficiency, and the utopian socialists as a method of developing a completel}' new
society”.Renowned economist G. D. H. Cole observed that cooperation and human

26
fellowship “showing a common front were a match for the economic carnivals.”'^New
moral world based on principles of cooperation and human fellowship which
according to him was to supersede the old immoral world of ruthless competition and
merciless exploitation and usher in a millennium of universal benevolence and
content".'” This philosophy of its own contributed a great deal to the advancement of
cooperation, “itis ideals are centred round these objectives, equalit\', social ownership
mutual aid, just price the need for abolition of the profit motive and education in
cooperation as a means of improving character’."
In the Miler sense of the term, cooperation isviewed more as a specialized and
differentiated type of organisation, it’s application in the economic field can be traced
to after the industrial revolution which took place in England during 1750 to 1850.
Cooperation, as is understood today is an economic system, bom as a peaceful
reaction against the mercantilist economy. The Industrial Revolution gave rise to
corrupting figures of capitalism were spoiling everything a ground them, civilisation
had been ravished, all social institution from commerce to marriage, were
vulgarised,'^ “Exploitation of workers, low wages, supply of adulterated food stuffs
of high cost and insecurity in employment contributed to the growing distress of the
working class during the industrial revolution period. It not only led to strikes and
disorders but also gave rise to new thinking and concern among certain intellectuals.
Cooperation emerged as a new philosophy, as an answer to the problems created by
capitalism and irrational inequality.
Although the idea of coop>eration isbasically the same all over the world, itsform and
content varies from country' to country. Cooperation emerged in different countries
among people with different economic interests and for perfonning different
economic functions. Ever\’where, however it originated as a defensive bulwark
against exploitation of the weak by those in a stronger economic position.
Cooperation has rightly been regarded as one of the least noticed economic miracles
of the last centur}'.’'

2.3 Definition of Cooperation

The term cooperation as generally understood today is a temi, which like
philosophy and religion defies exact definition and description. We therefore, come
across different definitions and no single definition has so far succeeded in including
within a single unassailable formula, allthe ingredients of cooperation ideologv'.

27
 The concept and meaning of cooperation has been given by utopian socialists
religious thinkers, sociologists, economists and reformists in their own way, in the
context ofthe circumstances prevalent in their respective countries.
Mr. H. Calvert defined cooperation “as a form of organisation, wherein persons
voluntarily associate together as human beings, in a basis of equality for the
promotion ofthe economic interests and themselves.”'"’
Dr. R. Philips gives this definition “The cooperative association isan association
of firms or households for business purposes and economic institution tiuough which
economic activity isconduced in the pursuit of economic objectives.'^
Mr. C. R. Fay has defined cooperation, as “A cooperative society is an
association for the purpose of joint trading, originating among the weak and
conducted always in an unselfish w'ay, sharing itsrewards, in proportion to the degree
in which they make use oftheir association.”'*"
According to Herrick, “Cooperation is the act of poor persons voluntarily united
for utilising reciprocally their own forces, resources or both under their mutual
management to their common profit.”''
Prof Paul Lambert, in his renowned book, ‘’Studies in the Social Philosophy
of Cooperation’ has given the following definition of cooperation, “A cooperative
society is an enterprise formed and directed by an association of users, applying
within itself the rules of democracy and directly intended to serve both its own
member and the community as a whole.’
Mr. W. P. Watkins, a former director ofthe International cooperative alliance,
defined cooperation as a “system of social organisation based on the principles of
unity, economy, democracy, equality and liberty”'^
The Mac-Lagon committee in India (1950) has defined cooperation as “the
theory which maintains that an isolated and powerless man by association with others
and by moral development and mutual support, obtains to that extent the material
advantage available to the wealthy and powerful persons and thereby develops
himselfto the fullest extent of his natural ability."'"
The international labour organisation points out that all cooperative society is
an association of persons, varv'ing in number who are grappling with the same
economic difficulties and who voluntarily associate on a basis of equal right
and obligations, endeavour to solve those difficulties mainly by conducting at their
own risk an undertaking to which they have transferred one or more of such of their

28
economic functions as correspondent to the common needs and by utilising this
undertaking injoint cooperation for their common material and moral benefits.^’
The secretary general of the U N transmitted a series of reports to the assembly
and council monitoring the contribution of cooperative to the goals of the United
Nations. In these reports, transmitted to the assembly at its forty ninth session,
(document 4/49/213 of July 1994) he concluded that “cooperation enterprises provide
the organisational means whereby a significant proportion of humanity is able to take
into its own hands the tasks of creating productive employment overcoming property
and achieving social integration”
The assembly acknowledged the timeliness of this conclusion and in its
resolution number 49/155 of 23 December 1994, recognised the “important
contribution and potential of all forms of cooperatives to the preparation and follow
up of the world summit” and initiated it“in formulating strategies and actions, to give
due consideration to the role and contribution of cooperative”.Thus cooperative are
both economic and social in character are business enterprises \\ath a deep sense of
social and environmental responsibility. They are testimony of the truth of the deep
conviction expressed in the draft declaration that social and economic developments
are mutually reinforcing.^^
The country’s economic structure is far undergoing fimdamental changes as a
result of the policy of liberalisation and de-regulation. The objectives of the new
economic policy are to impart a new element of dynamism to agriculture, trade and
industries; to encourage foreign investment and technologies for making Indian
products competitive in the international market to improve the performance ofpublic
undertakings and to introduce reforms in the financial sector. These changes are
bound to affect cooperatives since cooperative work as an integral part of the
country ’s economic framework. It is hoped that the cooperative movement will
respond to the changes and develop strict self-discipline.

2.4 Characteristics of A Cooperative Enterprise:

A careful study of the many definitions quoted above reveals the following chief
characterises of a cooperative enterprise
1. An association of persons - The chieffeature of a cooperative society isthat
itis an association of persons and not an impersonal grouping of capital like a
joint stock company. There isno denying that a cooperative societ>- is also in

29
 need of capital, but the emphasis is on man and not on capital he contributes"’.
In economic cooperation, itismen that count not money.
2. Itis a democratic organisation -A cooperative organisation is governed on the
basis of democratic principles. Eve^ member of the society has only one vote
and no more irrespective of the number of shares held by him.
3. The basis isequality - Another feature of a cooperative enterprise is that with
in membership relations betw'een man and man are governed by a rule of
equality' irrespective of possible difference of race, creed, political opinion,
social status or subscription of capital, all the persons possess equal rights and
duties. There can be no cooperation unless itisbetween equals.^^
4. Itis an undertaking - A cooperative undertaking isnot only an association itis
also an undertaking. Itisnot a charitable or philanthropic association. Itsown
members, at their own expenses and at their own risk, run a Cooperative
Enterprise.
5. It is a voluntary organisation - A cooperative enterprise is based upon a
voluntary form of organisation. No one is coerced tojoin a societ}' against his
will Coercion in any form isconsidered to be incompatible with the concept o
of cooperation.
6. The Keynote is service and not profit - The keynote of a cooperative
enterprise is service and not profit. A cooperative enterprises is motivated by
a spirit of service its whole business mechanism is graded towards the
provision ofmost economical services.
7. It is a socio-economic movement - The cooperative movement is a socio­
economic movement. It aims at bringing about revolutionary changes in the
social and economic structure by peaceful means. Itis based on self-help and
stands for moral uplift and honesty.
8. At the service of the both of the members and of the community - The basis
objective of a cooperative undertaking is not only to sen-e itsmember but also
to ser\e the community as a whole.
Shri. V. L. Metha has stated “It is the claim of the cooperative movement that it
can be the principal means ofbringing about in a peaceful manner a social change ofa
fundamental nature, ushering a social order non-exploitati\e equalitarian, tolerant that
harmonizes the dignity ofthe individual with the well being ofthe community.

30
2.5 Principles of Cooperation:
For a clear understanding of the cooperative ideology and to differentiate itfrom
other business enterprises the founding father ofthe cooperative movement laid down
some definite principles, which were expected to serve as guideposts for the future
development ofthe cooperative movement.
According to W. P. Watkins, “Cooperative principles are the ideas inherent in
the cooperation which detemiine that itis as a mode of action they are ideas which it
isthe purpose of cooperative activity to realise.^'
Mr. George Davidovic, a leading Canadian authority on cooperative defines
the principles as “a set of rules which govern the life and activity of a cooperative
organisation.”^'^
In the opinion of Prof D. G. Karve, “Cooperative principle is a way of
organising and conducting a cooperative activit)^ which is an inherent and
indispensable corollary of the ideal or the objective of the cooperative movement.”'^
The principles of cooperation have changed from time to time to suit the changing
environment and situation so that cooperative movement may become more
meaningful and purposeful. The modem formal cooperative movement dates from
1844 when 28 poor weavers of Rochdale, came together and opened a small
cooperative retail shop. The adopted a setof rules which even today effectively guide
the philosophy and conduct of cooperative societies all over the world.
1. Voluntary membership - The chief characteristics of a cooperative
organisation is that it is a voluntary form of association. Membership of a
cooperative society should be voluntary and available wdth out artificial
restriction or any social or religious discrimination to any person possessing
requisite qualification of being a member.
2. Democratic control - Cooperative factories are democratic organisation. The
affairs and management of cooperative factories are administered by majority
vote. The supreme authority' in a cooperative societ>- is rested in its general
body. Each member present at a general meeting is given only one vote
irrespective of the number of shares held by him. The managing committee
carries on day-to-day administration under the powers derived by itfrom the
general meeting
3. Limited interest on share capital - Share capital should receive only a limited
rate of interest. Hence, dividend on share capital is restricted under the

31
 Cooperative factories act professor D. G. Karv'e has observed ‘"Whenever a
Cooperative borrows capital in any form from members or non-members, it
stands to reason and that itsacrifices no cooperative values, to remunerate the
capital by fair rate of interest with grownng demand for capital such a nornial
method of financing their operations wall have to be adopted by cooperative in
increasing measure.”’**
4. Patronage dividend - Surplus or saving out of the operations of a societ\
belongs to its members and is distributed in a manner to avoid one member
getting extra at the expense of another, therefore, the surplus of the society
should be distributed among its members in proportion to the transaction of
the members with the society.^^
The Mirdha Committee on Cooperation (1965) has called this as
principle of “Patronage Refund”.This principle underlines the important fact
that a cooperative society is voluntary union of its members and it exists to
serve its members. The loyalty of the societ}' must be to its members and
loyalty ofmembers also must be to the society”.^
5. Promotion of Education - cooperative societies should make a provision for
imparting education to their member employees and cooperative workers on
the principle of cooperation. Mirdha committee has also regarded promotion
of education as a basic principle of cooperative movement and has
recommended that every society must contribute to promotion of education
not only financially but also by undertaking an active programme such as
dissemination of ideas of cooperation as well as general literacy in the
countryside.
6. Mutuality - all cooperative societies should actively cooperate with other
cooperative at local. District, state and national level.
The commission on cooperative principles appointed by the international
cooperative alliance in 1964 in its report published in 1966 considered the following
principles as essential to genuine and effective cooperative practice.'^‘
1. Voluntary and open membership
2. Democratic management
3. Limited interest on capital
4. Patronage dividend in proportion of members transaction
5. Education and training

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 6. Cooperation among cooperation
There have been also other principles like the principles ofpolitical neutrality,
correct weight and measures, purity of goods and thrift, which were also taken into
consideration. These principles have been reformulated recently by the Manchester
congress in^^95 and now the principles ofcooperation are as follows -
1. Voluntary and open membership
2. Democratic member control
3. Member economic participation
4. Autonomy and independence
5. Education, training and information
6. Cooperation among cooperative
7. Concern for community
The seventh principle was added atthe Manchester congress ofJ_955.

2.6 Principles of Cooperatioii for the 21*‘Century -

Need for injunctive values -
The late Prime Minister Smt. Indira Gandhi once said, “I know no other
instrument so potentially powerful and fiill of social purpose as the cooperative
movement” no other statement can explain the utilityof cooperative movement better.
It was the latest of such attempts at the I.C.A. conference at Manchester in the year
1995 in which one addition was made to these principles. The addition is “concern
for the societ.”^^ This addition might have been necessitated by universal realisation
of the commitment of any type of enterprise to the social realities resulting in the
concept of social responsibility of business, emerging during the last decade of this
centur>^ An example of such concern has been provided by the Japanese cooperative
in making their homes for attending to the needs of the old and aged.
The impending doom of the 2r* century assumes greater significance in every
field of activit\' than the previous ones. At the present juncture, there is crisis
everywhere making one to realise that the 20*^ century has been a century of crises.
There is crisis in credibility, crisis in management and crises of ideologies. All the
more serious is the crisis in morals and culture, warning of the impending doom of
mankind. Something should be done to a\’ert the fall of mankind. The only solution
lies in salvation and reviving \alues system in economic activities.

33
 As a corollary', cooperation being an economic activity needs new blood in the
form of value. Against this backdrop, the principles of cooperation refonnulated at
l.C.A. congress at Manchester based on cooperative values, assume, a lot of
significance. The I. C. A. has referred to the value of self-help, democracy, equality'
and solidarity. Prof Jha asserts that “Mutuality” is the value, which encompasses all
other values, self-help and mutual help is the basic tenet of cooperation distinguishing
its identity from other forms of business.
The foregoing discussion on morality might have become redundant had the
cooperative lived upto the true spirit of cooperation as envisaged by the early
cooperators and cooperative thinkers. As times have brought the movement to such a
statp, the present situation warrants a complete turnabout so as to rejuvenate the
movement to enable it to march ahead v^th its head high. A lot depend, on the
determination and strong will of the men behind the movement rather than on the
reformulation ofthe principle.

2.7 Economic Development Through Cooperation.

Through the cooperation was bom to alleviate the distress of the people, it is
no longer a mere tool in the hands of individuals for the attainment of some specific
ends, but is also a weapon of national development and international peace. That is
why the cooperative movement has rapidly spread over different parts of the world.
Even in centrally planned economics, we have cooperatives working under state
control.
The cooperative movement in India had its origin elsewhere and was
introduced to this region by foreign rulers. But even after independence, the
cooperative movement continued in our planned economy. In India cooperation has
become a part of national policy, and hence Indian cooperative movement is
sometimes ironically described not as a movement but only a product of government
policy.
India is a developing country facing a number of problems such as the
population explosion, unemployment, povert\'. paucit>’ of capital, low
productivit}', inequalities, low living standards, inflation and so on. Taking
into consideration the problems on one hand and over 50 years of
independence on the other. The growth of Indian economy israther slow. For
the solution of the abo\ e problems and for a rapid economic development, it

34
 was necessary' to accept a mixed economy as an economic system for the
balanced growth of public and private sectors together with a major role for
cooperative societies to contribute their mite in the process of economic
development.
In developing countries, cooperatives can play an important role in promoting
economic development, which benefits the nation as well as individuals in a number
of ways.
1. Cooperative societies discourage strikes, bandhs and such other activities,
which are inimical to the interest of the nation. For these are symptoms of
labour unrest. Cooperatives by minimising these socially undesirable ills,
create a favourable atmosphere in which productive work is sought to be
encouraged.
2. The cooperative movement works for the attainment of social welfare because
itsprimaiy concern isto raise the collective standards ofliving of itsmembers.
There is no inequality of members in the functioning of the cooperative as a
result discontentment, disillusionment and hatred, which might have
developed among the individuals had they not been members of the
cooperative, are no where in evidence. In other words, cooperative
discourages the growth of the basic defect of individualistic philosophy of life
and encourages social progress.
3. The term economic development of a country does not merely refer to an
increase in National Income but also refers to how best the increased national
income may be distributed among larger section of the population. In any
economy, distributive aspect is as important as production. Poverty alleviation
of a large number of the people is possible not only by enlarging the size of
income, but also through equitable distribution ofthe national product.
Cooperatives promote a just distribution of the national income, for
they believe in equality' of opportunity among members, and division ofprofits
is not on the basis of capital contribution of a member. Had itbeen otherwise
it would have been instrumental in the creation of inequalities of income and
wealth.
4. The emergence of private monopolistic forces in the economy, widen the
scope forthe exploitation of consumers. In this context consumer cooperative
societies came to the rescue of consumers by establishing an alternative source

35
 of supply through which goods are supplied in desired quantities at reasonable
prices. Cooperatives therefore, are serious threat to the development of
monopolistic interests and relieve economic pressure on the weaker sections of
society'.
5. A cooperative institution as an enterprise effectively mobilise the capital and
other resources of its members such as land, labour etc. all of which result in
greater production. This revises the level of output and benefits the members
as well as the entire economy.
6. Agricultural cooperative of different types set up in the economy for the
consolidation of fragmented holdings, soil conservation, management of water
resource, etc. make available diversified services to the farmers which help to
promote and accelerate growth.
7. Cooperative societies encourage members to work together for the common
benefit, so that they as well as the nation may profit form it. Itmotivates its
members to take an active part in the various activities of the organisation.
The cooperative also canalises the savings of its members effectively and
invests them in productive activities.
8. The process of modernisation in agriculture is better initiated through
cooperative action, for it assists in changing the agrarian structure of the
society. Itmakes itpossible for an individual farmer to enjoy the advantage of
the use of modem technology and increased agricultural production for his
own benefit as well as benefits ofthe nation.
9. Individuals as fragmental units ofan economy, fail to raise the nation income
of the country’at a rapid pace. But cooperative endeavour helps the nation to
achieve quick results at less cost.
10. Cooperative societies are viewed as useful instruments of bringing about the
f economic development of the country, for the stimulation of different
productive activities in different fields of operation. They make itpossible for
an individual to make use of technological advances, which would otherwise
have been difficult.
11. Agricultural credit cooperatives meet the credit requirement of farmers by
/ supplying them credit at reasonable rates of interest and suitable terms of
repayment. As a result rural development through use of modem technolog}'
and mechanisation of agricultural and allied actu ities is encouraged.

36
 12. “W e the consumers will be assured that production will be for consumption
rather than for profit. The satisfaction of the actual needs of the members will
become the motivating force of the economy instead of caring for dividend on
the part of the few.”^"* Ser\'ice to humanity’or production for consumption is
the main purpose of the cooperative movement, which assists in the economic
betterment of large section ofthe population inthe country.
13. Cooperative farming, dairying and poultry help to raise rural income by
expanding productive activities. As a consequence their economic prosperity
ispromoted.
14. Cooperative societies assist in the expansion of employment opportunities to
the people. This happens in two ways. First, because of cooperative action
large-scale production is possible and this creates employment opportunities.
Secondly, increased employment leads to increased demand for goods and
services that call for additional investments and stimulates the creation of
additional employment opportunities.

2.8 History of The Cooperative Movement

Cooperation is a worldwide phenomenon; experiments in cooperation have been
carried on for over a century. Today cooperative are the most important type of
voluntary organisation throughout the world. A brief review of the cooperative
movement is given below:

2.S.7 Cooperative Movement in the World:

The cooperative movement, which saw the light of the day in Europe, has
spread through out the world. “Cooperation” Dr. Fauquent writes “is perhaps more
widely distributed geographically than any other modem form of organisation". In
1937 there were 810000 cooperative societies of various types in 103 countries of the
world. These societies had a membership of more than 143 million. If this
membership represented a like number of families, itwould correspond to something
like 30 percent of all the families in the world.Since 1937, the cooperative
movement has grown b\' leaps and bounds, throughout the world.
The earliest cooperative were set up among weavers. In other words, workers
in cottage industries, who w'ere the fnst and hardest hit by the development of the
mercantile economy and the industrial revolution. So the weavers, in order to gam
access to the market for the tools of their trade or for the foodstuffs set up the first

37
cooperative in Scotland (Fenwick 1761, Govan 1777, Darval 1840) in France
(Lyonsl835) in England (Rochdale1944) and in Germany (Chemnitz 1845)
Though cooperation and mutual enterprise has been the essence of human
societ}’ever since it evolved the real cooperative movement can be credited to the
Rochdale pioneers who established a cooperative consumer store in north England.
This store can be called as the first in the cooperative consumer movement. The
‘‘Rochdale pioneers” made their first aim to establish cooperative where the members
would not only be their own merchants but also their own producers and their own
employers.
In France Charles Fourier (1722-1837) a commercial clerk published his main
work, A treatise on Domestic Agricultural Association in 1822. The cooperatives
play a useful role in collection of wheat and course grains, handling of firuits and
vegetables and production of w’ool. This publication could be one of the first works
on cooperation. In France, Saint Simon (1760-1865) worked on various theories of
“association.”
In Germany, the share of cooperatives in cereals marketing and processing is
significant. Cooperatives also play a vital role in the supply of milk, wine production,
vegetables marketing, supply of seeds and fertilizers and also in the distribution of
pesticides and animal feeding stuffs.
In Israel, if we take into account the economic enterprises run by the ^
cooperatives, it is estimated that nearly 28 percent of national economy is organised
cooperatively. In certain fields this percentage ismuch higher. For instance, nearly Va
of the agricultural produce in the country' is raised within the cooperative sector.
Almost the same proportion of the produce is marketed through cooperative.
The cooperative movement has also made significant progress in some of the
Asian countries. In Japan, for instance, virtually every farmer is member of a local
multipurpose cooperation. At least half of all the agricultural production is marketed
thi’ough the cooperative network and 30 percent of total saving deposits from
agriculture are placed in cooperative institutions.
Though all the above-mentioned visionaries had articulated the philosophy of
cooperation it was not until the World War II that an Authoritative commission was
appointed by the International cooperative alliance.

38
 The Coinmission on Cooperative Principles appointed in 1914 by the
International Cooperative Alliance in its report published in 1966 considered the
principle as essential to genuine and effective cooperative practice.
There have been also other principles like the principle of political neutrality,
correct weight and measures, purity of goods and thrift, which were also taken into
consideration. These principles have been reformulated recently by the Manchester
congress in 1995.
Thus, cooperation now occupies a position of cardinal importance as a form of
business organisation in almost all the countries of the world, whether they are small
or big, whether they are capitalist or socialist, whether they follow one religion or the
other. The caste, colour, religion, isms etc, have not been any bar for the development
of the cooperative movement. The working of cooperative movement all the world
over clearly demonstrates that there is hardly any economic need that cannot be met
by organising cooperative societies and hardly any form of social or political
organisation with which the movement cannot be reconciled or integrated.
As an institution for technical, economic and social progress, voluntary
cooperatives have shown their possibilities and practical benefits in a wide variety of
circumstances and these have been increasingly recognised by many government.
They have promoted education, both general and vocational; they have provided
effective training in democracy and self-government. They have neither been class
bound not state bound. They have maintained and increased that sense of inter­
dependence so important for social progress.^^

2.8.2: The Cooperative Movement in India,

Cooperation occupies an important place in the Indian economy, perhaps in no
other country inthe world is,the cooperative movement as large and as diverse as itis
in India. There is almost no sector left untouched by the cooperative movement. The
essential feature of this system is that power remains in the hands of men who are
directly interested in the work to be done. On account of this, late Prime Minister
Shri Jawaharlal Nehru firmly belie\’ed in the cooperati\e ideologv' and considered
cooperatives as one of the three pillars of democracy, the other two being the
Panchayat and the school.
The planners of the country consider cooperation as an instrument of
economic development of the disadvantaged, particularly in the rural areas. The

39
features of cooperatives like non-exploitation, the voluntary’membership principle of
one person one vote, decentralised decision making and selfimposed curbs on profit
have eminently qualified it as an importance instrument of development. The
continuous, strategic and planned efforts for the healthy growth of this movement in
the country have resulted in spectacular progress of cooperatives in the recent years.
However, for becoming a vital force in shaping the future of the country.. It has to
become a movement of the masses motivated and animated by the true spirit of
cooperation.' It is observed that no area of India's development offers greater
potential in contributing to rural development than cooperation.^'^
The cooperative movement in India started towards the beginrung of the
present century. At that time the major aim in establishing cooperative societies was
to supply cheap credit to farmers and to protect them from exploitation by
moneylenders. Under the Cooperative Credit Societies Act 1904, only credit societies
could be set up. Within a short period of the working of the Act of 1904, many
weaknesses were noticed and a more comprehensive Act in 1912, called the
Cooperative Societies Act was passed. Under the new act, a provision was made for
the formation of societies for purposes other than the supply of credit. Further, under
the Act of 1919; cooperation became a subject transferred to provinces. The
government has, from time to time, taken important steps to reorganise and develop
the cooperative movement in terms of the recommendation ofvarious committees. In
various five years plans, ithas been considered as the basis of the planned growth and
social development.
2.8.2.I. The First Stage of the Movement.
The introduction of the Cooperative Credit Societies Act in 1904 marked the
beginning of the cooperative movement in India. The laudable measure was hailed as
a “turning point in economic and social history” by Henry W. Wolft, the great
cooperator and in a notable work, "The Way from Poverty to Plenty" by Sir Daniel
Hamilton.***^

40
 Table 2.1 indicates the growth of the cooperative credit societies in India
during the period under review.

Table 2.1

Year Number of Societies Number of members Workiug Capital j

(in thousands) (in lakhs)
1906-07 849 90.84 23.72 1
I1907-08 1357 149.16 44.14
(160.97) (164.20) (186.08)
1908-09 1963 180.34 82.32
(144.65) (120.90) (186.50)
1909- 10 3428 224.40 124.68
(174.63) (124.43) (151.46)
1910-11 5321 305.40 203.05
(155.22) (136.09) (162.86)
Source: Report ofthecommittee on cooperationinIndia(1912)p - 4
N.B. Figuresinbracketsindicatepercentageincreaseoverpreviousyear
It may be seen from the above figures that the credit societies made significant
progress during the initial stages. There was hardly any province where the new
doctrine did not strike root. The Maclagon committee stated “the movement did not
take long to outgrow the dreams of itsfounders.”^'

2.S.2.2 Second Stage: (1912 -1918) The Period of Hurried Expansion.

The defects ofthe 1904 act were remedied in 1912 when another Cooperative
Societies Act was enacted. With the passing of this Act, the movement entered on the
second stage of its progress. By the end of 1917-18, there were 23741 agricultural
societies and 1451 non-agricultural societies. The membership of these societies was
8.5 lakhs and 2.04 lakhs respectively.

Z8.2J.The Third Stage (1919 -1929): Period of Unplanned Expansion.

During this period the movement continued to make rapid progress. The
number of memberships of agricultural credit societies increased three times, while
their working capital moved up four fold. The progress in the non-credit sector was
even more.

41
 2.8.2.4. Period of Recovery (1939 - 46)

The Second World War had a marked impact on the trends in the cooperative
movement in the country, and with this the movement entered into the next phase.
The war came as a boon to the agricultural classes as it led to a boom in prices. The
repaying capacity of the farmers increased and they were able to clear off their old
debts.
The progress of the movement could be judged from the fact that in 1945-46
there was one society for ever>>- 3.8 villages and about 10.6 percent of the population
had been covered by the movement as against one society for every 5.4 villages and
6.2 percent population in 1938-39.'*^

2.8.2.5. Cooperation During the Planning Era

Since the attainment of independence, the movement has been making rapid
progress in various directions. Alongside this, the government has from time to time,
taken of the recommendations of various committees like the Cooperative Planning
committee (1946). The All India Rural Credit Survey Committee (1954), the
Vaikunthlal Metha Committee (1960) etc., have assigned an important role to
cooperative societies inthe coimtry’s plans.
The Cooperative Plaiming Committee has stated “The cooperative society has
an important role to play as the most suitable medium for the democratisation of
economic planning. It provides the local unit which can fulfil the dual fiinction of
educating public opinion in favour of plan and of executing.”'*^ The main operations
ofcooperatives in India are as under.
1. Agricultural credit
2. Agricultural Supplies
3. Agricultural Marketing
4. Agricultural Processing
5. Functional Cooperatives in the fields like dairy, poultry, fisheries, fruits,
vegetables etc.
6. Industrial cooperative
7. Public distribution of essential commodities through consumer cooperatives
8. Urban credit cooperative
9. Housing cooperative

42
 The Cooperative Movement in India is the result of a deliberate policy of the
state and is vigorously pursued through formation of an elaborated governing
infrastructure. The successive Five Year plans looked upon the cooperation
movement as the balancing sector between public sector and the private sector. And
the success is evident. Almost 50 percent of the total sugar production in India is
contributed by sugar cooperatives and over 60 percent of the total fertilizer
distribution in the country is handled by cooperative. The consumer cooperatives are
slowly becoming the backbone of the public distribution system and the marketing
cooperatives are handling agricultural produce with an astounding growth rate. The
National Cooperative Development Corporation (NCDC) a statutory body was set up
in 1963 by the union ministry of civil supplies and cooperation to promote the
cooperative movement in India. They have unilateral and multinational federations
and their numerical growth over the years covering vast membership has been
spectacular. The growth of the cooperative movement over three decades can be seen
from Table 2.2

Table; 2.2

Sr. Year Number of Societies Membership

No. (In Thousands) (In millions)
1 1960-61 332.5 35.2
2 1965-66 342.2 51.9
3 1973-74 333.6 77.1
4 1977-78 300.4 93.1
5 1984-85 315.7 ' 142.1
1
i 6 1991 -92 318.7 i 148.0
1
1
7 1992-93 339.7 172.5

1993-94 395.3 189.6

1 i
9 1994-95 411.1 1 197.8

i 10 ' 1995-96 452.7 204.5

1 ;
Source: “IndianCooperative Movement: A Profile." National CooperativeUnion ofIndia.
The figures in table 2.2 suggest that the growth of the cooperative movement
is not only impressixe but has contributed in no small measure to the development of
the economy of the country'. Cooperatives were developed and were drav.Ti up by
diflerent stales for expansion of agricultural credit and marketing ser\'ices to the
fanners.
Table 2.3 indicate the over all progress of the cooperative movement in the
different states.
Table 2.3 (A)
State -wise Number and Position of Cooperative Societies. (All Types)
I- Credit Societies (Data as on 31** Marchl995)

State % union Number of Membership Paid up Working

territory Societies (000) Capital Capital
Andhra Pradesh 10454 10141 28873 694133
Bihar 7745 7518 17446 220279
Goa 362 310 2075 63357
Gujrat 11519 7271 53959 1142979
Haryana 3079 2644 25731 414948
Himachal Pradesh 2469 969 3356 118690
Karnataka 6398 8344 39311 485656
Kerala 2632 13811 28334 676631
Madhya Pradesh 5981 7721 29592 504453
Maharashtra 36540 23666 187705 2956424
Manipur 322 161 2429 7349
Meghalaya 241 121 949 13381
Nagaland 376 341 227 5494
Orissa 3586 4529 11325 177362
Punjab 4094 2721 20251 512146
Rajasthan 6183 6302 27813 344609
Sikkim 35 14 11 161
Tamilnadu 7056 15878 56676 703951
Tripura 400 314 764 12276
Uttar Pradesh 10350 19044 15688 721873
West Bengal 12063 6349 15688 259873
A & N Islands 63 9 42 -------------4628 i
\
— Arunachal
-- - ■ --Pradesh
■ ■ ---- 35 29 ^ 181 ; 9194
jDadra & Mgr Haveli 23 15 81 188
1Daman & Diu 19 14 68 201
1 Pond cherry 124 96 866 12402
132149 138332 569435 10062638 i

NABARD.

44
 Table 2.3 (B)
State-wise Number and position of Cooperative Societies in India.
II- Non-Credit Societies (Data as on 31*' Marchl995)
(Rs. In Lakhs)

State/ Union Number Membership !Paid-up !Working

Territory' of (000) Capital Capital
Societies 1
1
Andhra Pradesh 16690 2142 4414 31827
Bihar 22454 1445 6393 26848
Goa 351 86 1562 4585
Guirat 21122 3509 12502 272614
Haryana 10996 1087 14934 128122
Himachal Pradesh 1363 104 2896 7529
Karnataka 16282 5567 31868 131061
Kerala 6931 7433 2770 13882
Madhya Pradesh 12644 3523 59629 523301
Maharashtra 97798 11212 117422 1065708
Manipur 3859 225 420 1061
Meghalaya 550 49 2048 3216
Nagaland 1793 49 186 528,
Orissa 1803 1 512 6885 26877
Punjab 17026 1286 27920 270111
Rajasthan 14135 1387 13230 70487
Sikkim 224 15 34 110
Tamilnadu 4588 5720 13028 381075
Tripura 858 54 754 362
Uttar Pradesh 10156 2471 7041 58016
West Bengal 5209 586 3736 9571
A & N Islands 364 28 152 2779
Anmachal Pradesh 172 34 141 1737
Dadra & Ngr Haveli 54 0 0 0
Daman & Diu 38 10292 17 149
Pond cherrv' 323 266 2419 10187
i 267783 59082 i 332401 1 3041743
Source; “ImportantItems ofData on Creditand Non -creditcooperative societies 1994-95’'
NABARD.

2.9. The Cooperative Movement in Maharashtra.

Maharashtra is one of the major states of India. It is also the most urbanized
and industrialized state. The Cooperative Movement is widespread and has a long
histor>’in Maharashtra and e\'en today it plays an important role in the economy of
Maharashtra. The genesis of the Cooperative movement in Maharashtra can be
divided into six stages.

45
 2.9.1 The Pre Cooperative Stage: (1870-1903)

The need for agricultural credit seems to have been taken note of first in the
Nicolson Report, which was followed by the passing of The Deccan Agricultural
Relief Act, The Land Improvement Loan Act, 1883 and the Agricultural Loan Act,
1883. In this stage, awareness about the need for institutional finance and regulated
interest rates for the farmers was created.

2.9.2 The Initial Stage: (1904-1911)

This stage ismeasured from the passing ofthe Agricultural Credit Cooperative
Societies Act, 1904 to the opening of the Mumbai Central Cooperative Bank. Tlie
Cooperative Society was a new democratic form of organisation, gaining support
from the downtrodden masses, especially from the rural public.

2.9.3 The Evolution Stage: (1912-1924)

After the passing of the amended Cooperative Act of 1912, the movement
passed through a new phase of reorganisation. The organisation of cooperative
financing agencies, organisation of non-credit societies and training schemes for
cooperative education received a momentum in this phase.
2.9.4 The Stagnation Stage: (1925-1947)
The enactment in 1925 of The Bombay Cooperative Societies Act widened the
scope of the movement in the Bombay Province, both horizontally as well as
vertically. The Bombay Cooperative Insurance Society was established in the year
1930. In the same year. The Cooperative Land Mortgage Bank was also formed for
long-term financing, for redemption of debts, land improvement and purchase of land.

2.9.5 The Growth Stage: (1948 - 1961)

There was an all round progress during these two decades after India attained
independence from the British Rule. The movement diversified, especially in the
rural area where sugarcane was growTi. The agriculturists pursued this concept of
self-help and made the best use of the credit facilities given to them for augmenting
production. Examples like the Pravaranager Sugar Cooperative inspired man>- to
organise cooperatives in the sugar sector with long-term goals in mind. Significant
attitudinal changes had occurred at the grass root level. This \\as also the period of
emergence of rural leadership through the cooperative movement. The Apex Bank
also started to strengthen its organisation and the working of the secondarx level

46
central financing agencies. This was also the period where the institutional
foundation was strengthened.

2.9.6 The Diversification Stage: (1962 on wards)

Expansion, accompanied by extensive vertical and horizontal diversification
embraced all fields of socio-economic activity with gains varying from 2 to 6 times.
The state government initiated policies and programs to strengthen the cooperative
effort. Some of the noteworthy features of the movement during this period w^ere the
increased mobilisation of resources, strengthening the cooperative effort in the sphere
of agricultural production and the building up ofrural leadership.
The State Cooperative Bank also built up the necessary strength to provide
support to the government programs of intensive production and procurement of food
grains, financing of sugar factories and other new industries in the cooperative sector.
The cooperatives have helped the rural economy of Maharashtra tremendously. Ithas
been able to groom grass root level leadership, bring about peaceful socio-economic
changes and help institutionalised the rural economy to a considerable extent. This
table 2.5 gives an idea about the progress of the cooperative movement in
Maharashtra over the years.

2.10. The Progress of the Cooperative Movement in Maharashtra.

The cooperative movement in Maharashtra has played a vital and dominant
role in the social and economic development of the state, particularly in the rural
areas. Initially, this movement was confined mainly to the field of agricultural credit.
Later on, it rapidly spread to other fields like agro processing, social services etc.
This has resulted in a considerable beneficial impact in raising the standard of living
of the rural people.'^Vlhe Cooperative Movement has been recognised as an effective
instrument for the economic development of the rural masses and for improvement in
the socio economic condition of the underprivileged. Since the majority of the
population of Maharashtra lives in these areas and is involved in agricultural activity,
the cooperative movement here assumes greater significance.
Toda\\ we find that cooperatives are found in almost all the pockets of
Maharashtra and have been vastly successful in the over all improvement of the
equalit}’ of life in the rural areas. This is a success not only of the people of
Maharashtra but also of the cooperative movement itself The cooperative movement
in Maharashtra has not only improved the lives of the people here but has made

47
significant conlribution to the economy of the slate itself. Maharashtra is considered
as the land of opportunities as it is one of the most developed states not only
economically but also in terms of infrastructure. Without doubt, major credit for this
achievement goes to the cooperative sector, which can certainly be termed as the
leadership of the masses but also has been involved in promoting the development of
infrastructure in the state.

2.10.1 Number of Cooperative Societies in Maharashtra-.

Maharashtra is one of the leading states in the country' so far as development
of cooperative societies is concerned. Cooperative Agricultural credit and Sugar
Cooperatives were initiated in the state of Maharashtra. The progress of the
cooperative movement became faster aftercreation ofthe state in 1962.

Table 2.5

Sr. Type ofCooperative 1961 1981 1991 1999 2000 2001 2002
No.
1 Apex «&;Centra] 39 31 31 32 34 34 34
AgriculturalInstitutions
2 PrimaryAgriculturalCredit 21400 18577 19565 20354 20529 20551 20674
Societies
3 Non AgriculturalCredit 1630 5474 11294 19864 21055 22014 23555
Societies
4 Marketing Societies 344 423 931 1055 1059 1115 1140
5 Productiveenterprises 4306 14327 28954 37872 38513 39070 39521
(sugarfectories,ricemills,
dedrysocietiesetc.)
6 Socialservicesand other 3846 21915 43845 67464 1 71555 75233 1 80865
i
cooperative societies i 1 1
i ( 1
(consumer stores,housing 1 i
1

1 1
etc) 1
1
Total 31565 60747 104620 146641 i152745 158017 165789
i 1 I
Source: Maharashtra StateSahakari Sangh Limited, Pune,165
During the span of the last fort>’ years 1961 - 2001) the number of
cooperative societies in the state increased more than four times. This was mainly
due to substantial growth in the number of cooperative societies in social services,
non-agricultural credit societies and productive societies.

48
 Graph 2.1; Number of Cooperatives in Maharashtra

180000

160000

140000

120000

> 100000
2
0
>
a
o
o
o

o. 80000
2

60000

40000

20000

1961 19S1 19S1 1999 2000 2001 2002

Year

49
 The progress of various types of cooperative societies in Maharashtra since
1961 is given in table 2.5.

2.10.2. District-wise Distribution of Cooperative Societies:

Table 2.6 depicts the number of Cooperative Societies in each of the districts
of Maharashtra State. Recent data of last three years shows that the societies seem to
have been concentrated in Mumbai, Thane, Pune, Kolhapur, Nashik and Ahmednagar
districts. On the other hand, the population of cooperative societies is rather thin in
Sindhudurg, Hingoli, Vashim, Gondiya and Gadchiroli districts.
Ifwe consider region-wise distribution of cooperative societies in the state, we
find that the maximum number of cooperative societies is concentrated in western and
southern Maharashtra. Vidarbha, Marathwada and Konkan region have relatively
smaller share in cooperative societies.

50
 Table 2.6
District-wise Distribution of Cooperative Societies in M aharashtra.
Sr. District 3 1 .0 2 .2 0 0 0 3 1 .0 2 .2 0 0 1 3 1 .0 2 .2 0 0 2
No.
1 Mumbai 20754 21426 22117
2 Thane 15266 16289 17458
3 Raigad 2443 2553 2672
4 Sindhudurg 806 829 898
1 5 Ratnagiri 1430 1565 1654
6 Nashik 9107 9363 9877
7 Dhule 2945 2825 3045
8 Nandurbar 1338 1401 1498
9 Jalgaon 4560 4473 4719
10 Ahmednagar 8059 8437 8713
11 Pune 15738 16692 17834
12 Solapur 8136 8146 8932
13 Satara 5242 5484 5269
14 Sangli 4573 4546 4555
15 Kolhapur 9624 10266 10503
16 Aurangabad 4495 4772 5142
17 Jalana 1892 1990 2193
18 Parbhani 1808 1743 1865
19 Hineoli 901 862 907
4508 4429 4413
20 Beed
3484 3618 3677
21 Nanded
2629 2802 3148
22 Osmanabad
2950 3117 3470
23 Latxrr
1730 1783 1897
24 Buldhana
1477 1486 906
25 Akola
854 864 2410
26 Vashim
2409 2402 2213
27 Amaravati
2107 2096 1544
28 Yavf»+rnal 3943
1438 1478
29 Wardha 1367
3902 3921
30 KTnfTpiir 3943
1303 1309
31 Rhandara 1367
985 976
Gondiva
TO l^
^ViQnHrjiniir 1530 1551 1041
ile iu u io jju i -----
725 740 1626
34 Gadchiroli 166816
151148 156234
35 Maharashtra total
1607 1780 1965
36 Housing Societies, CIDCO &
Panvel
Total Maharashtra State 152755 158014 168781
j T M PiiTif» Annii;i I R eoort 2000. 2()01.and 2 0 0 2
>1

51
a>_
x:
w
ra
h>
ra
£
ra
S
c
m
a>

<0
a
a.
9
uo CM
ID

n
is
m
«
CO

u
•c
•*
«
Q
«
£
Q.
2
o

SiliSIOOS dOON
 2.10.3 Number ofMembers

There was substantial increase in the membership ofthe cooperative societies

in Maharashtra during the period from 1961 to 2001. The progress in membership is
showTi in the following table.

Table 2.7
Number of Members of Cooperative Societies in Maharashtra

Sr. No. Type of Cooperative 1961 1981 1991 2000 2001

1 Apex & Central Agricultural, 76 1014 1485 1307 1308
Non agricultural Institutions
2 Primary Agricultural Credit 2170 5416 7942 9915 10205
Societies
3 Non Agricultural Credit 1087 3759 9302 17632 18558
Societies
4 Marketing Societies 141 471 745 824 832
5 Productive enterprises (Sugar 323 2124 3974 5906 5963
factories, rice mills, dairy
societies etc.)
6 Social service and other 394 1999 3455 5717 5806
cooperative societies
(consumer stores, housing
etc.)
Total 4191 14783 26903 41301 42672
i
'
Source: Economic surveyofMaharashtra2001-2002.

The membership of these societies in the state in the year 1960-61 was 41.9
lakh, whereas the membership of these societies as on ST* March 2001 was 427 lakh.
Growth in number of members is also depicted on the graph that shows upwards
trend.

2.10.4. Working Capital

The total working capital of cooperative societies of allt>pes taken together in
the state increased from Rs.290.95 crore in 1961 to Rs. 97932.15 crore as on SI"'
March 2001. The increase in working capital during the period was enormous, 335

53
Graph 2.3; Total Members of Cooperative Societies in
Maharashtra

1961 1981 1991 2Q01

Year

54
 limes the initial amount. This was mainly due to substantial gro\\lh in the
number of cooperative societies in Apex and central agricultural/ non-agricultural
institutions, non-agricultural credit societies and productive societies.

Table: 2.8
Working Capital of Cooperative Societies in Maharashtra

Sr. Type of cooperatiA es 1961 1 1971 1981 ! 1991 1 2001

i
No 1 1
1 Apex & Central Agricultural 11907 183052 880554 i3423162 13617913
/Non agricultural Institutions
2 Primary Agricultural Credit 5812 57746 185100 575303 650881
Societies
3 Non Agricultural Credit 4593 120881 750784 3600686 3803962
Societies
4 Marketing Societies 592 18822 33960 309481 148908
5 Productive enterprises (Sugar 4132 102945 458810 984411 991255
Factories, Rice mills, dair>'
society etc)
6 Social service and other 2060 42591 119137 571581 577296
Cooperative societies
(consumer stores, housing
etc)
Total 29096 526037 2428345 9464624 9790215
Source: Economic Survey ofMaharashtra.
2.10.5 Advances
The total advances of cooperative societies of all types taken together in the
state increased from Rs. 269.99 crore in 1961 to Rs. 58,229.49 crore in 3T‘March
2001. Considerable increase in advances noted during the period under reviev^' is
almost 216 times of the initial year 1961. Table 2.9 shows the position of
disbursement of advances by types of cooperative societies during the period 1961 to
2001.

55
Graph 2.4;Working Caprta! of Co-op Societies in Mafianashtra.

YEAR

56
 Table 2.9
Advances of Cooperative Societies
(In Rs. lakhs)
Sr. No. Type of 1961 1981 1991 2000 2001 1
1
cooperative
1 Apex & Central 17538 152751 908475 3177250 2722765
Agricultural, Non
Agricultural 1
Institutions i ___ _
1
2. Primary ~ 4256' 24999 ' 79% “ 302653“ 317786
Agricultural Credit
Societies
3 Non Agricultural 4703 112948 517816 2423424 2752156
Credit Societies
4 Marketing Societies 347 349 845 1353 1419
5 Productive 71 1208 1678 7748 7826
enterprises (Sugar
factories. Rice
mills. Dairy
societies etc)
6 Social service & 84 1218 6029 20789 20997
other cooperative
societies
(consumer stores
housing etc)
Total 26999 293473 1514809 5933217 5822949
Source: Economic Survey ofMaharashtra2001-02
Graph No. 2.4 shows the continuously rising trend in advances ofthe societies
in the state

2.10.6 Outstanding Loans

Total outstanding loans of cooperative societies of all t>pe taken together in
the state increased from Rs. 170.42 crore in 1961 to Rs. 52,059.35 crore as on 3T‘
March 2001. The increase in advances during the period is 305 times. The rise in
outstanding advances is rather sharp during the decade 1991-2001.

57
 Graph 2.5; Advances of Cooperative Societies of Maharasiitra

7000000

6000000

5000000 j

4000000
J(/
Z)
SSl
Q
O)
a
3
q:
3000000

2000000

1000000

Year
 Table 2.10
Outstanding Loans of Cooperative Societies in Maharaslitra
(In Rs. lakhs)
Sr. Type of Cooperative 1961 1981 1991 2000 2001
No.
1 Apex & central 8714 113677 588901 1905524 2820567
Agricultural /Non
Agricultural
Institutions
Primary Agricultural 4788 38367 131021 418090 475670
Credit Societies
Non Agricultural 3185 73089 459440 2082901 2103730
Credit Societies
4 Marketing Societies 80 387 935 2460 2485
Productive enterprise 57 3033 6884 39138 30439
(sugar factories, rice
mills, dairy societies
etc) ________
Social services and 218 2523 19101 270341 273044
other cooperative
societies (consumer
stores, housing etc)
Total 17042 231076 1206282 4718454 5705935
Source:Economic Survey ofMaharashtra2001-02

2.10.7. Turnover of The Produced Goods Sold:

The total value of produced goods sold by the cooperative societies of all
types taken together in the state increased from Rs. 107.31 crore in 1961 to Rs.
15713.25 crore as on 31^* march 2001. The increase in advance during the period is
146 times. Here again, the turnover ofgoods sold during the decade

59
 Graph 2.6; Shown the Rising Trend of Outstanding Loans of
the Societies in the State

60000

50000

40000

w
£
S
o
5 30000
0)
a
S.

20000

10000

Year

60
 Table 2.11
Turnover Value of The Produced Goods Sold
(In Rs. lakhs)
Sr. Type of Cooperative 1961 1981 1991 2000 2001
No.
1 Apex & central 0 0 0 0 0
Agricultural /Non
Agricultural
Institutions
2 Primary Agricultural 1005
" 14673“ “'23948" ” 83'592’“'"'8^28
Credit Societies
3 Non Agricultural 247 977 0 3922 3961
Credit Societies
4 Marketing Societies 4761 97923 260247 522210 517081
5 Productive enterprise 3601 103134 346703 818203 826385
(sugar factories, rice
mills, dairy societies
etc)
6 Social services and 1117 18684 33008 137409 139470
other cooperative
societies (consumer
stores, housing etc)
Total 10731 235341 663906 1565336 1571325
Source: Economic Survey ofMaharashtra2001-2002.
0^ c>^'/.

61
 Graph 2.7; Turnover Value of Produced Goods Sold of
Cooperative Societies in Maharashtra

18000.00 ,

16000.00

uooo.oo

12000.00

lU 10000.00
a:
O
DC
O
z
CO
^ 8000.00

6000.00

4000.00

2000.0C

0.00

YEAR

62
 2.1 ft8. Important Characteristics of Cooperative Societies
Maharashtra plays a dominant role in the overall development of cooperatives
in the country. Some important characteristics of cooperative societies of all types
taken together in the state for 1991-2000 and 2001-02 are given in the table 2.12.

Table 2.12
Present Status of Cooperative Societies in Maharashtra

Sr. Ending March Percentage

Item
No 2000 2001 Change
1 Number of Societies (Number) 152745 158016 3.5
2 Number of Members (in lakhs) 413 427 3.4
3 Paid up share capital 5967 6064 1.6
4 Contribution of state government 992 1000 0.8
5 Working Capital 92646 97932 5.7
6 Advances (gross) 59332 58229 (-) 1.9
7 Deposits 63757 65178 2.2
8 Advances (net) 27602 31044 12.5
9 Societies in profit
1. Number of Societies 50849 52383 3.0
2. Profit in Rs. Crore 1119 1026 (-) 8.3
10 Societies in Loss
1. Number of Societies 40626 41627 2.5
2. Loss in Rs. Crore 1375 1458 6.0
11 Number of societies with no profit no loss 8850 9348 5.6
12 No of societies for whom position of profit 52421 54658 4.3
or loss isnot available
Source: Economic surveyofMaharashtra 2001-02
Table 2.12 indicates a much faster growth in numerical strength ofboth credit
and non-credit cooperatives in the state of Maharashtra. The number of cooperative
societies of all types taken together in the state as on 3T' march 2001 was 1,58.016,
which was higher by 3.5 percent than the previous year. The paid up share capital of
these societies as on ST* March 2001 increased by 1.6 percent to Rs.6064 crore trom

63
Rs.5.967 crore as on 3T' March 2000. The contribution ofthe state government in the
total paid up share capital was Rs.lOOO crore (16.51%). The deposit and working
capital of all these societies were Rs.49468 crore and Rs.97932 crore respectively and
were higher by 6.7% and 5.7% respectively than that of the previous year. The
amount of net loans advanced by these credit cooperative societies was Rs.31044
crore and was higher by 12.5% than that of the previous year."*^

2.11. Progress of Cooperative Movement in Maharashtra & Nashik District.

Cooperative Societies grew in Maharashtra and in Nashik District by leaps and
bounds, particularly after creation of Maharashtra State in 1961. Indicators of these
developments are narrated in the following paragraphs.

2.11.1. Progress of Cooperative Societies in Nashik District

The progress of cooperative societies in Nashik District is commendable. It
has taken strong root in the District. The cooperative movement in Poona District has
played a significant role in the urban areas. In the beginning, the movement was
confined to agricultural credit. To keep pace with the changing economic situation, in
addition to providing credit to agricultural sector, non-agricultural sector was also
encouraged. The main reason for the rising trend of the cooperative societies in
respect of number, membership, working capital, share capital, net profit etc,, it has
been observed that the economic progress and rural development of an area is based
on various cooperative enterprises. Cooperative sector is a major part of such
enterprises. There are several cooperative societies in the various fields, i.e.
cooperative spinning mills, cooperative sugar factories, cooperative lift irrigation,
cooperative oil seed project, cooperative credit societies, cooperative dairy societies,
agricultural credit societies etc. Thus, the list of cooperative enterprises can be
extended but these examples are sufficient to mark the success of the cooperative
enterprises. The progress of various types of cooperative societies in Nashik District
since 1981 is given in the table 2.13
During the span of last tvvent>’years (1981-2001) the number of cooperative
societies in the District increased more than three times. This was mainly due to
substantial growth in the number of cooperative societies in social services, Non-
agricultural credit societies and productive enterprises.

64
 Table 2.13
Number of Cooperative Societies in Nashik District
Sr. No. Type of cooperative 1981 1991 2001
1 Primary Agricultural Credit Societies 757 771 804
Other Primary credit 50 216 215
Non Agricultural Credit Societies 188 580 1021
Marketing societies 72 88 88
Productive enterprises (Sugar Factories spinning 116 1242 1978
mills, Rice mills, dair>' societ>' etc)
Social service and other Cooperative societies 252 3006 5257
(consumer stores, housing etc)
Total 2435 5903 9363
Source:Dataobtained from The Sub Registrar,Cooperative Societies,Nashik

2.11.2 Recent Status of Cooperative Societies in Nashik District

Nashik District plays a dominant role in the over all development of cooperative in
Maharashtra. Some important characteristics of cooperative societies of all types
taken together inthe District for 2000 and 2001 are given in the table 2.14

Table 2.14
Status of Cooperative Societies in Nashik District
Sr. Ending March % Change
Items
No. 2000 2001 over 2000
1. Number ofSocieties 9104 9363 2.8
2 Number ofMembers (000) 1884 1938 2.8
3. Contribution of state government (Rs.OOO) 69352 69745 0.6
4 Paid up ofshare capital (Rs.OOO) 1882142 1882203 0.03
5. Deposits (Rs.OOO) ; 15503776 20904232 28.08
6. Working Capital (Rs.OOO) 1 27364382 51277334 46.6
7. Borrowing outstanding (Rs.OOO) 29305456 40440823 27.5
8. Purchases (Rs.OOO) 1469846 1555148 5.5
9. Sales (Rs.OOO) 1468255 1553557 5.5
10. Societies inProfit: 1. Number 3913 4105 4.7
2. Profit i 673634 655110 2.8 1
11. 1 Societies in Loss: 1. Number 3820 3848 ; 0.7;
! 2. Loss 350115 1 350640 0.15:1
12. iNumber ofsocieties with no profit no loss 1371 1410 2.8;
Source;Dataobtained from The Sub-registrar,Cooperative Societies,Nashik
The above table clearly indicates a much faster growth in numerical strength
of both credit and non-credit cooperatives in the District of Nashik. The number of
cooperation societies of all t\'pe taken together in the District as on 31^’March 2001

65
was 9363 which as higher by 2.8 % than the previous year. The paid up share capital
of theses societies as on 31"' March 2001 increased by 0.3% to Rs.1882203 thousand
from Rs.1882142 thousand as on 3r‘ March 2000. The amount of outstanding
borrowings by these credit cooperative societies was Rs.40440823 thousand and was
higher by 27.5% than that ofprevious year.

2.11.3 Types and Important Characteristics of Productive Enterprises and

Social Services Cooperative Societies.

Cooperative processing industries have proved to be an efTecti\’e instrument of
socio economic change of the areas in which they are located. Development of
cooperative processing is essential not only for increasing rural income and
facilitating credit for production but also for building up a cooperative rural economy.
Productive enterprise have increased in Nashik District and have proved invaluable as
instruments of development in several allied fields, i.e. sugar factory, dairy’societies,
fisheries societies, spinning mills, and forest labourers societies.
Social services and cooperative societies have been established on the
principles enunciated by the Rochdale pioneers. Some important characteristics of
cooperative productive enterprises and social service cooperative societies of alltypes
taken together inthe Nashik District in2001 are given in the Table 2.15.

66
 Table 2.15
Types & Important Characteristics of Productive Enterprises, Social Services
and Cooperative Societies

Sr. Type of societies No: of Member­ Share Reserves Working

iSo. Societies ship Capital & Other Capital
funds
A Productive Enterprises
1 Sugar factories 6 94510 3883 7122 22174
2. Other agricultural 12 14938 20380 26914 103786
Processing
societies
3. Primary 107 8661 11702 11342 45970
Handloom &
power loom
4. Cooperative 4 5393 33416 79399 99447
spinning mills
5. Cooperative 13 4914 14713 3294 129126
industrial estate
6. Primaiy industrial 384 42953 10732 3186 58885
societies
7. Dairy societies 530 25695 1290 1451 17372
8. Dairy union 2 772 4210 2684 20803
9. Fisheries societies 65 5355 249 54 819
10. Agricultural 10 1535 204 455 2215
societies
11 Lift irrigation 171 23517 10355 1918 518100
societies
12 Forest labourers 25 21560 502 5038 10762
societies
13 Other societies 686 28333 9314 932 21162
B Social Services and Cooperative Societies
1. Consumer 155 75494 5688 6309 1 55656
societies 1 --- 1
2. Cooperative 3836 66956 20086 13701 3993889
housing societies 1
Labour contract 1048 48449 6930 1509 110237
societies
4. Transport 13 715 263 385 5188
1 1 1 i 1
societies 1 ^------ 1
I ---------1
i
1 cooperative ! i i i
1 mandal ' ■ ' , ■
! 6 Other societies 204: 10404 1047 , 612; 1221:
Source: Data obtained from The Sub Registrar,Cooperative Societies,Nashik.
The above table clearly indicates a much faster growth in numerical strength
of both productive enterprises and social services and cooperative societies in Nashik
District.

67
2.12. Organisation of The Department of Cooperation in Maharashtra
Administration of cooperatives is done by an independent department of
cooperation in the ministry of cooperation in Maharashtra state. The Minister for
Cooperation has the overall in charge of the cooperative administration, which is
assisted by the Minister of State for Cooperation. On the executive side, the Principal
Secretarj' for Cooperation to the Government of Maharashtra heads the department at
the Mantralaya level at Mumbai. He is assisted by a number of Deputy secretaries.
The Commissioner for Cooperation as a head of the department at the field level,
having his ofBce at Pune, heads Department of Cooperatioa The Commissioner of
Sugar, Pune, looks after the sugar cooperatives, whereas the Director of Agricultural
Marketing, Pune, and the Director of Handlooms, Power looms and Cooperative
Textiles are concerned with the Agricultural Marketing and textiles.

2.13. Laws of the Cooperatives

Cooperation is an activity of the people. It is a self generated voluntary and
self-sufficient activity. Hence little government interference is desirable. However
considering the economic parameters of this movement and interests of several
persons involved there is possibility of misuse of personal power by any of the group
members. The government therefore had to pass legislation to monitor the activities
of the cooperatives mainly with the purpose of safeguarding the interest of all the
members. Great Britain for example had passed legislation as early as 1852. Similar
legislative intervention of can be seen in Germany and France (1867) and Italy (1883)
In Maharashtra, the cooperative societies are governed by the Maharashtra
Cooperative Societies Act, 1960 and supported by Maharashtra Cooperative Societies
Rules, 1961. The legal system in the cooperatives registered in Maharashtra state is
elaborate; moreover each cooperative should have its own byelaws, which are the
guiding pnncig^of the cooperative. These byelaws have to be approved through a
resolution of the society’. These byelaws can be amended in the general body meeting
of the cooperative. The only condition of the byelaws is that they should not be
contrary to the Maharashtra cooperative societies Act and have to be appro\ ed b>' the
Registrar."*^

68
References
1. International Encyclopaedia ofSocial Sciences Vol-3, 1972 P-384
2. Smith, Louis P. F. The Evolution of Agricultural Cooperation, Oxford; Basil
Blackwell, 1961, P. XI.
3. Dr. B. S. Mathur- C’ o-operation in India, “Published B Y Sahit>'a Bhawan,
Agra 1990, Page 1.
4. Smith Louis P. F. The Evolution ofAgricultural Cooperation, 1961 P 151
5. Ibid P 9
6. Nourse Edwin G "The Economic Principles of Cooperation in Agricultural
Cooperation, edited by Martin Abraham and Claude Scruggs P-161

7. Panday R Shashtri: Arthashastra of Kautilya, Pub: Pundit Pustakalaya, Kashi,

1964
8. Louis P. F. Smith - Ibid. P 75
9. Cole G. D. H. A Century of Cooperation, 1944 London P19
10. Boner, Arnold, British Cooperation, 1961 Manchester pp. 23-24
11. Dr. Ashok Mehta; Democratic Socialism P-9
12. Dr. Smith: - Quoted by Dr. B. B. Mathur, Cooperatives in India, Shivalal
Agrawal and co - Agra, 1987, P-5
13. H. Calvert, The Law and Principles of Cooperation, 1921, P-11
14. Philips, Economic Nature of Cooperative Association P-74
15. C. R. Fay - Cooperation at Home and Abroad Vol. 1,1948. p.5
16. Herrick - Rural Credit, P 247
17. Lambert, The Social Philosophy of Cooperation, (1963)
18. W. P. Watkins: Quoted by Dr. B. B. Mathur, Cooperation in India, Sahitya
Bhawan 1990 P. 8
19. Kamat G. S. New Dimensions of Cooperative Management, 1978, p. 6
20.1.L. B. Cooperation, A worker’sEducation Manual, p. 20
21. The document ‘'''Dimensions of the International Cooperative Movement '
prepared by the international cooperative alliance for the 1995 world summit
on social development held in Copenhagen, Denmark in March 1995
22. Edgar Mithhuad - Quoted by Dr. B. S. Mathur, Ibid. p. 10
23. India Cooperative Review, July 1965, p. 495
24. W. P. Watkins-Ibid. p. 15

69
25. George Davidoric: Ibid, P-3
26. D. G. Karve- Cooperative Principles and Substance, 1968, p. 24
27. D. G. Karve p.7
28. Report ofthe Committee on Cooperation (1965) p-7
29. Report ofthe Committee on Cooperation (1965) p- 9
30. Report of the ICE Commission on Cooperative Principles, London,
International Cooperative Alliance 1966 p-37
31. Tamilnadu Journal of Cooperation Vol. 83, No. 11, Feb-Mar 1992 p-623
32. Dr. Chattappank- “7n Search of Cooperalive Value ” D. Jha Vikas Publishing
House 1998 p-101
33. P. H. Casselman - Cooperative Movement and Some of its Problems -1982
34. Cooperation - A worker’sEducational Manual, Ibid, p. 24
35. United Nations Rural Progress through Cooperation, United Nation P-106
36. B. S. Mathur - Nehru on Cooperation, A. J. C. C. Economic Review
December 1-1966
37. Economic Survey ofMaharashtra 2001-2002 p-176
38. Einsminger, D. Rural India in Transition, New Delhi 1972 p-55
39. Henry W Wolff, Cooperation in India, 1972, P. 129
40. Report ofthe Committee on Cooperation in India, (1912) p. 4
41. Review ofthe Cooperative Movement inIndia, 1939,46 p. 2
42. Report ofthe Cooperative Planning Committee. 1946
43. Ibidp.176
44. Ibid p. 177
45. http;/www. mah .nic in/sahakara

70