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India’s new Ministry of Cooperation: What it delivers matters more than its birth


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The move puts the spotlight on the cooperatives and with a powerful leader like Amit Shah, denotes the weightage it is to receive. (File image/PTI photo)

There are over 8 lakh cooperatives of all shapes and sizes across sectors in India. In an absolute sense, it may appear a big number, but seen in the context of India and its size, it is still very small and the country should be having many more cooperatives operating. Yet, when it was announced that a new Ministry of Cooperation focused on the cooperatives has been formed and is to be headed by veteran politician Amit Shah there were both expectations and misgivings, depending on who one was talking to. At one end was a completely cynical view that the speaker himself felt but asked nonetheless: “Could this be a move that has political undertones to it, after all, there are many cooperatives that are backed by rival political parties and therefore, will it really end up supporting them?” At the other end, were views that expressed relief that finally, there is realization that wealth creation in India cannot be really equitable if the cooperative movement is not given its due importance and which is what the latest move of creating a separate ministry seems to signal.

Question of survival

Either view notwithstanding, there is the question of why this is being done now. At a time when the cooperatives in India are fighting a survival battle or as some experts describe it as a COVID-war equivalent in a sense with some either on ventilator support or banking on oxygen supply and with only a few fit and stable, the formation of a separate ministry for cooperatives augurs well. It puts the spotlight on the cooperatives and with a powerful leader like Amit Shah, denotes the weightage it is to receive. But then, those who have studied the cooperatives in India over the years, feel the next steps now will matter more than this much-celebrated first step.

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Vaidyanathan committee & beyond

“With this move, the cooperatives come under focus, which is really welcome. However, the health and revitalization of the cooperatives depends on how the various elements that are crucial for this are dealt with,” says YSP Thorat, the former chairman of the National Bank of Agriculture and Rural Development (NABARD).

Thorat is an expert in this space. He played an important role as a member secretary to the Task Force on Revival of Rural Cooperative Credit Institutions or the celebrated Vaidyanathan committee of 2004, named after the committee chairman Professor A Vaidyanathan, a veteran economist and one remembered as a staunch advocate of data quality and empirical analysis.

“What will be watched now,” he says, “is what happens to the key components. For instance, what will be the future of cooperatives in credit, sugar, and milk? It is without doubt a loaded political question, but my hope is that what the minister will try to do is resuscitate them in a politically neutral, level-playing manner.”

And, even if this is attempted, the key issues in dealing with cooperatives and making a success of any measure in this space is crucially linked to bringing about a meeting of minds of state governments and especially the state chief ministers. After all, it has to be implemented in a decentralised manner. How the ministry brings about genuine cooperation between the states and the centre is critical and may therefore be the other thing that will be closely watched by those wanting to see all the cooperatives in India bounce back to good health. The third element that is equally critical now will be what is done to come up with a roadmap on this. For this, the minister could bring about a gathering of knowledgeable people, who could not just aid and advice but also help put together a clear and implementable roadmap for revitalising the Indian cooperatives.” It will be, in many ways, taking forward the steps which were suggested and initiated by the Vaidyanathan committee.

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Not just about agriculture, milk & credit

Those who have worked closely with the cooperatives are hinging a lot of hope on the new ministry. They hope it can help take the agenda beyond agriculture, milk, credit and housing cooperatives. “Cooperatives can be formed anywhere. Even restaurants can form a cooperative and take up home delivery of food, for instance, and get the margin instead of leaving it to a food delivery agency,” says R S Sodhi, the managing director of Gujarat Cooperative Milk Marketing Federation Ltd (or known to most as Amul, the brand of food products it markets).

Describing the move to set up a new ministry as a good beginning in a long journey, he says, the cooperative model is most suited for India given that small farmers, workers and traders it caters to and ensures equitable distribution of wealth and profits. Amul, he says, deals with 16 million milk producers, 1,85,903 dairy cooperatives; 222 district cooperative milk unions; marketed by 28 state marketing federations.

“Amul is an example of how these small people can create a big business. We reach out to 3.6 million families. If we take other cooperatives nationally then we are talking of over 12 million families,” he says.

Sodhi hopes the “the new ministry will identify the areas where cooperatives-based business enterprises can be made, provide the capital, technology and providing the ease of doing business.”

Women cooperatives

Quoting estimates from the National Cooperative Union of India, which put the total number of cooperatives in the country at over 8 lakh, Mirai Chatterjee, chairperson, SEWA Cooperative Federation, based out of Ahmedabad, says, “while we are awaiting the details, when we heard there is going to be a Ministry of Cooperation, we felt hopeful because we felt there will be a focus now on cooperatives and cooperation and we are particularly keen that there should be a focus on women cooperatives because they are less than three per cent of the 8 lakh cooperatives in the country.”

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Also, she says, SEWA (Self Employed Women’s Association) and SEWA Cooperative Federation has been advocating more enabling policy and regulations for all cooperatives and we are now hopeful that with a ministry of cooperation, the issue of creating an enabling environment and removal of any barriers will be taken up.”

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