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Economically ‘Able’ Cooperatives Will Realise Mahatma Gandhi’s Swarajya

The ministry must govern and guide; not direct, not overreach. It must be a catalyst, and not the command centre of the sector.

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Cooperative sector needs stronger scaffolding, holistic framework.

It has a new ministry. 

Cooperatives are truly grass-root people-based movement. They seem omnipresent, impacting most of India’s rural economy, and touching almost every rural life. They are a vital component to ‘ease of living’ in rural landscape, enhancing both value & viability across every transaction. 

Sector is a lost ‘opportunity’. Contributing less than its mass 

Co-ops are abandoned by the state. They need nourishing. Their caring heart and nurturing soul need an innovative mind, stronger spine, and a robust framework.

Our policymakers have largely been indifferent to the development of the sector. The registrar of cooperatives that oversees the sector has neither the capacity nor the resources to contribute effectively. They suffer from pretence of knowledge on one hand, compounded by apathy on the other. They have no skin in the game. The very nature of the administrative setup and the complex & high headed structure often governs badly and undermines implementation, ebbing the outcome.

Co-op ecosystem is politicised. One may even be forgiven for believing it to be a political entity, not socioeconomic. In several states it is a breeding ground, in others a cradle for the emerging politicians to make a mark and move to the legislative assembly. At a point of time a third of the elected MLAs in Maharashtra had sharpened their acumen in the co-op sector.

States ‘own’ the sector. Accept no accountability, take no responsibility

Partly because of the inherent inadequacy, but largely because of the torpidity, and negligence of the nourisher (state governments), co-op framework is broken. Its foundation is fragile. The architecture is obsolete. It perches on frail girder. 

However, and despite, the sector continues to contribute to the rural economy, anchoring the aspirations of the poor, serving the deprived. 

Cooperatives are often the sole service provider in many rural communities, especially in the poorest districts. They are invariably the first call for financial services, preferred choice for housing and several other basic needs.

Provide ‘real’ benefits to farm families

In the agriculture sector they add the much-needed stability, providing market access; and strengthening the farmers across the entire value (production, processing, and marketing) chain. Additionally, they train, lend, and furnish other resources, enabling higher farm returns. 

Similarly, the co-ops enable entrepreneurship by mitigating individual risk. A Crux insight across 300 practitioners and policy influencers highlights co-ops promote, even create a culture of collaborative entrepreneurship by shared productivity, decision-making and creative problem-solving. The credit co-ops lend, encourage, and enable micro ventures like farming and livestock. Focussed co-ops play an instrumental role in preserving the handicrafts and ‘taking to market’.

The co-ops ecosystem supplements the incomes of the rural households, encouraging them to live and grow, preserving the rural community culture. The Crux study articulates a ‘forced’ migration contributes to the urban stress, increases social conflicts, perpetuating urban ills. Rural-urban migration erodes rural demand, slows growth, dries up investment. The study concludes that a thriving co-op sector can drive demand & investment, catalyse a sustainable virtuous growth cycle.  

Potential to be economic multiplier 

Those who have been protesting the farm bill must take a lesson or two from the cooperative model where, by integrating the several parts of the value chain (supply & purchases, sales & investment etc.) the cooperatives reduce cost-per-unit compared to their individual farmer counterparts, allowing an entire community to enhance value to their investments and effort.

A thriving cooperative sector will check, even counterbalance job crisis where the farm sector ‘throws’ millions out into the low-productivity, low-wage informal sector. 

Their contribution is staggering. They support livelihood opportunities to over 60% of rural workforce, produce a third of sugar. The PACs (primary agriculture cooperatives) are prime lenders, covering almost every rural block, lubricating grassroots-level credit flow. 

Provide sustenance, anchor the rural economy

Policymakers must deepen the core ethos of the sector, which mirrors Mahatma Gandhi’s Swarajya, while focusing on effectiveness and impact. The cooperatives can thrive only if the business and societal goals of the members are intertwined. Changing the model to fixate one at the cost of the other will erode the character, fray the fabric. 

The ethos of the co-ops i.e., profit ‘sharing’ and social responsibility is pivotal to poverty eradication, and social mobility. Similarly, ‘integrated’ and family-centred employment model bolsters gender equality, enhances the role, and recognises the contribution of women. 

Newly set up ministry’s agenda must be to guide them to move from a politico-socio entity, and nourish their emergence as a thriving socioeconomic enterprise. It must ensure transparent, effective accounting & capital standards and strengthen their access to low-cost funds for expansion. 

The ethos of the co-ops will deliver.

The ministry must govern and guide; not direct, not overreach. It must be a catalyst, and not the command centre of the sector.

It must proliferate the true spirit, co-opt the ethos that seeks maximising benefits for each stakeholder; not profit. It must be equally vigil. Sector has become an instrument of patronage & pilferage, mismanaged & politicised. Election is won by the monied and the manipulators. Largess is ‘returned’, political interest served.

The PM appreciates that the co-ops can be a vehicle to usher in real growth across the rural landscape. It is not lost on him that indifference is subtracting value. He believes new ministry will provide direction and seeking accountability. The PM’s intention is clear, goal wider and even more defining i.e., redeem, revive, and revitalise the co-ops to generate mass employment, catalyse rural development. Additionally, empower the marginalised & deprived, enhance social mobility. 

Promote happiness & harmony 

However, the leader in the PM must ensure the party does not appropriate the significant political capital. Similarly, he will fail rural India, particularly the deprived if the ministry of cooperation is unable to capitalise on the potential of transforming poverty-ridden communities into vibrant economic entities, 

The Prime Minister must use his growing political capital to coax some, persuade most others, and significant stakeholders to realise the Mahatma’s vision of a harmonious, happy and wealthy rural India.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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economy mahatma gandhi magazine 2 Aug 2021

Dr. Vikas Singh

The author is a senior economist, columnist, author and a votary of inclusive development

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