General Studies IIMinistry

Ministry of Co-operation


A new ‘Ministry of Cooperation’ has been created for strengthening the cooperative movement in the country.

About Ministry of Co-operation:

  • The Ministry of Co-operation is a ministry under the Government of India which was formed in July 2021.
  • The ministry provides a separate administrative, legal and policy framework for strengthening the cooperative movement in the country.
  • The ministry’s creation was announced on 6 July 2021 along with its vision statement of Sahkar se samriddhi.
  • Before the creation of this ministry, the objectives of this ministry were looked after by the Ministry of Agriculture.
  • The ministry works in strengthening co-operatives at the grassroot level,
  • working to streamline processes for ‘Ease of doing business’ for co-operatives and enabling the development of Multi-State Co-operatives (MSCS).
  • The same was initially announced by Finance Minister Nirmala Sitharaman while presenting the 2021 Union budget.

Roles/Functions of the new ministry:

  1. Provide a separate administrative, legal and policy framework for strengthening the cooperative movement in the country.
  2. Help deepen cooperatives as a “true people-based movement reaching up to the grassroots”.
  3. Streamline processes for ease of doing business’ for cooperatives and enable development of multi-state cooperatives (MSCS).

About ‘Co-operatives’:

  • According to the International Labour Organisation (ILO), a cooperative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.
    • There are many types of cooperatives such as Consumer Cooperative Society, Producer Cooperative Society, Credit Cooperative Society, Housing Cooperative Society and Marketing Cooperative Society.
    • The United Nations General Assembly had declared the year 2012 as the International Year of Cooperatives.
    • India is an agricultural country and laid the foundation of World’s biggest cooperative movement in the world.
    • In India, a Co-operative based economic development model is very relevant where each member works with a spirit of responsibility.

Types of Cooperative Societies

Following are some of the types of cooperative societies:

1. Consumer Cooperative Society: Consumer cooperative societies are formed with the objective of protecting the consumer interests. Individuals who wish to purchase products at reasonable rates most likely join consumer cooperative societies. In such type of societies, there are no middlemen involved, the product is purchased directly from the producer and sold to consumers.

2. Producer Cooperative Society: Producer cooperative societies are formed with the objective of protecting the interests of small producers. These cooperatives help producers in maintaining their profit and also to assist producers in procuring items that will be helpful in production of goods and services.

3. Credit Cooperative Society: These cooperative societies are set up with the objective of helping people by providing credit facilities. They provide loans at a minimal rate of interest and flexible repayment tenure to its members and protect them against high rates of interest that are charged by private money lenders.

4. Housing Cooperative Society: Housing cooperative societies are formed with the objective of providing housing facilities to the members of the society. This proves to be beneficial for the lower income groups as it allows them to avail housing benefits at a very affordable price.

5. Marketing Cooperative Society: These societies are formed with the objective of providing small producers a platform to sell their products at affordable prices and also eliminate middlemen from the chain, thus ensuring adequate profits.

Provisions of Indian Constitution related to Cooperatives:

  • The Constitution (97th Amendment) Act, 2011 added a new Part IXB right after Part IXA (Municipals) regarding the cooperatives working in India.
  • The word “cooperatives” was added after “unions and associations” in 19(1)(c) under Part III of the Constitution. This enables all the citizens to form cooperatives by giving it the status of fundamental right of citizens.
  • A new Article 43B was added in the Directive Principles of State Policy (Part IV) regarding the “promotion of cooperative societies”.

Importance of Cooperatives:

  • It provides agricultural credits and funds where state and private sectors have not been able to do very much.
    • It provides strategic inputs for the agricultural-sector; consumer societies meet their consumption requirements at concessional rates.
    • It is an organization for the poor who wish to solve their problems collectively.
    • It softens the class conflicts and reduces the social cleavages.
    • It reduces the bureaucratic evils and follies of political factions;
    • It overcomes the constraints of agricultural development;
    • It creates a conducive environment for small and cottage industries.

Source: PIB

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