The Beginning of Cooperative movement in India (The Formation of Co-operative Societies Act in India)

The cooperative movement in India played a pivotal role in uniting people from different walks of life during the British colonial period, contributing significantly to the nation’s socio-economic fabric. It sought to address the pressing needs of the marginalised sections of society, primarily farmers, artisans, and workers. It was built on the principles of self-help, cooperation, and collective responsibility. The roots of the cooperative movement in India can be traced back to the late 19th century when the British government and colonial economic policies left large sections of the Indian population impoverished and vulnerable. The Indian peasantry faced harsh exploitation by moneylenders, landlords, and traders, which led to cycles of debt and poverty. Against this backdrop, the idea of cooperative societies emerged as a potential solution to alleviate economic hardships. The concept was influenced by the global cooperative movement, particularly from Europe, where cooperatives were already established to provide mutual aid and support for various groups of people in the country.?

The formal recognition of cooperative Society in India began in the early 20th century with the establishment of the first cooperative societies. In 1904, the British colonial government enacted the Indian Co-operative Societies Act, which laid the foundation for the establishment of cooperative societies in India. This act provided legal recognition to cooperatives and allowed them to function within a framework that promoted mutual assistance and self-reliance. The cooperative movement in India not only provided economic relief but also became a symbol of unity and collective resistance against colonial rule.

The British, through their policies, had reinforced a hierarchical and exploitative economic system. The cooperative society model, in contrast, promoted equality, shared responsibility, and collective benefit, which resonated with the broader Indian struggle for independence. By working together under one roof, whether for securing better prices for agricultural produce, gaining access to credit, or managing resources, Indian farmers and workers began to assert their economic autonomy. These efforts played a significant role in organizing rural India, which had been fragmented by social, economic, and caste divisions.

Furthermore, cooperative society also created a platform for political and social unity.? The father of the cooperative movement in Maharashtra is “Raobahadhur Vithaldas Thackersey” he is widely known for his significant contribution to the cooperative movement in the state of Maharashtra. Thackersey played an essential role in establishing and promoting cooperative societies in Maharashtra, particularly in the fields of agriculture and credit society. His hard work and dedication laid the foundation stone for the cooperative society movement's growth and development in the state of Maharashtra. The movement helped build awareness about the exploitation by colonial powers and encouraged collective action, which was a powerful tool in the broader fight for independence. The cooperative societies became spaces where people could come together across caste and religious lines, building a sense of solidarity and empowerment. This unity not only addressed economic challenges but also fostered social cohesion.

In that period the cooperative model was also aligned with the ideals of Mahatma Gandhi, who believed in self-reliance (swadeshi) and rural upliftment. Gandhi’s promotion of rural cooperatives was integral to his vision of India’s economic independence and social progress. His emphasis on empowering the rural economy, especially through the establishment of cooperative societies, had a lasting impact on the growth of the movement. In short, the cooperative movement in India, particularly during the colonial period, played a crucial role in bringing together people from diverse backgrounds to work towards common goals.

?After India gained independence in 1947, the cooperative movement played an even more significant role in shaping the country’s socio-economic landscape. The newly formed government, recognizing the potential of cooperatives to address the challenges of poverty, unemployment, and underdevelopment, placed great emphasis on promoting them across various sectors. Cooperatives became essential instruments for rural development, economic empowerment, and social justice. They provided a structured way to tackle the systemic problems faced by farmers, artisans, and small industries, which were crucial for India's post-independence economic growth.

?Therefore, In the year 1960, the Maharashtra Cooperative Societies Act was enacted and played a significant milestone in this journey of the agriculture sector in Maharashtra, providing the legal framework for cooperative societies to flourish and contribute to the socio-economic development of a people of Maharashtra. By promoting principles of mutual aid, collective responsibility, and self-sufficiency, cooperative society became both a tool for economic empowerment and a means of uniting people against British colonial oppression.

?One of the most notable achievements of the cooperative movement in post-independence India was the Operation Flood program, which revolutionized the country's milk production industry. Launched in 1970 by the National Dairy Development Board (NDDB), Operation Flood is considered the world's largest dairy development program. By establishing a nationwide network of dairy cooperatives, the program enabled millions of small farmers to directly sell their milk, bypassing middlemen and ensuring fair prices. This not only boosted milk production but also improved the livelihoods of rural farmers, contributing to the country’s self-sufficiency in milk. The cooperative model transformed the dairy sector, which was once dominated by large private players, into a vibrant and equitable industry, lifting millions out of poverty and providing employment to a vast segment of India's rural population.

Simultaneously, the Green Revolution in the 1960s, which introduced high-yielding varieties of seeds, fertilizers, and modern farming techniques, was complemented by cooperatives that helped small farmers adopt these technologies. The government and cooperative societies played a crucial role in providing access to better agricultural inputs, technical assistance, and support services. Agricultural cooperatives facilitated the distribution of seeds, fertilizers, pesticides, and machinery, enabling farmers to increase productivity. This collaboration helped make India self-sufficient in food grains, especially wheat and rice, reducing the country’s dependency on food imports and boosting national food security. The Green Revolution also created employment opportunities in rural areas, further enhancing the role of cooperatives in rural development.

In addition to agriculture and dairy, cooperative society were instrumental in providing access to credit for small industries and entrepreneurs. The establishment of credit societies (pathpedis) and cooperative banks helped address the issue of financial inclusion in India. Many small-scale industries and rural entrepreneurs lacked access to traditional banking services due to high collateral requirements and interest rates. Cooperative credit societies provided affordable loans, which enabled small businesses to expand and thrive their potential beyond the limit. These credit society institutions played a critical role in supporting rural industries, such as handlooms, handicrafts, and cottage industries, and created significant employment opportunities in these sectors. Moreover, cooperative society in India helped to integrate marginalized communities into the mainstream economy. Scheduled Castes, Scheduled Tribes, and women, who were often excluded from formal financial systems, were able to gain access to resources and opportunities through cooperative banks and credit society.

Moreover, women found empowerment through cooperative society programs that focused on women’s self-help groups, e.g. our favourite Indian. Culinary “Lijjat Papad” comes under “Mahila Gruh Udyog”, where women come together and pool their resources, access credit, and start small businesses. This not only improved their economic condition but also contributed to their social upliftment.

The cooperative movement’s contribution to the Indian economy pre- and post-independence extended beyond the agricultural and industrial sectors. Cooperative societies became key players in the urban housing sector as well, with cooperative housing societies providing affordable homes to millions of families, especially in rapidly growing cities. These societies helped address the housing shortage and played a role in shaping urban development across the country.

In summary, the cooperative movement in India, especially after independence, added tremendous value to the economy by creating inclusive, self-reliant, and sustainable systems in agriculture, dairy, credit finance, and small industries. Programs like Operation Flood and the Green Revolution, supported by cooperative societies, transformed sectors that were once vulnerable and inefficient into engines of growth and self-sufficiency. Furthermore, credit cooperative societies helped boost small industries and provided financial inclusion to millions. Through these initiatives, cooperatives not only contributed to economic growth but also promoted social justice, empowerment, and employment opportunities, making them central to India's development journey.

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