Reforms Driving Employment Growth in Cooperative Sector

Sagar Kisan Wadkar

Naveen Kumar Singh

As Indian cooperative fraternity celebrates the third anniversary of the Ministry of Cooperation on July 6, 2024, it also commemorates the 102nd International Day of Cooperatives. This year's theme, "Cooperatives Build a Better Future for All," aligns perfectly with the Ministry's mission over the past three years. Established in 2021, the Ministry of Cooperation was envisioned to breathe new life into the cooperative sector, which had experienced stagnation despite its long history dating back to 1904. The Ministry's establishment marked a significant turning point, introducing a series of transformative initiatives designed to rejuvenate and empower cooperatives across the nation. This article explores the extensive reforms undertaken by the Ministry and their impact on employment opportunities and economic growth in India.

Celebrating Three Years of Progress

The Ministry of Cooperation has been instrumental in revitalising the cooperative movement through a series of 54 initiatives. These initiatives were meticulously crafted after extensive consultations with state representatives and stakeholders, focussing on legislative reforms and easing business operations for cooperatives. The Ministry's efforts over the past three years have not only strengthened the cooperative sector but also significantly contributed to the broader socio-economic development of the country.

The Ministry of Cooperation is dedicated to achieving nine specific tasks within a set timeframe. These tasks include, transforming the vision from cooperation to prosperity, strengthening the cooperative movement, extending its reach to the grassroots level, and promoting a cooperative-based economic development model. This model instills a sense of responsibility among its members for national development and is designed to help cooperatives realise their potential. Additionally, the ministry aims to create a supportive policy, legal, and institutional framework.

A Continuity in Cooperative Reforms

The stable political environment and the union-level support in the country have provided a platform for the continuous growth of Cooperative Movement 2.0. This consistency has allowed the Ministry to pursue long-term strategies, ensuring that the cooperative sector continues to thrive and expand. The government's unwavering support has been crucial in implementing reforms that are vital for the sector's rejuvenation and the vision of "from cooperation to prosperity".

International Recognition and Milestones

The United Nations has declared 2025 as the International Year of Cooperatives, highlighting the global importance of cooperatives in promoting socio-economic development and sustainability. This declaration underscores the significant role that cooperatives can play in building inclusive economies and improving livelihoods worldwide.

India's commitment to the cooperative movement will be further recognised when the International Cooperative Alliance (ICA) hosts its Global Conference in New Delhi in November 2024. This event will serve as a launchpad for the celebrations of the International Year of Cooperatives in 2025, showcasing the importance of the Indian cooperative sector and the establishment of the new Ministry, which has provided a separate identity to the Indian cooperative movement.

As reported by the World Cooperative Monitor (WCM) 2023, Indian cooperative organisations like Indian Farmers Fertiliser Cooperative Limited (IFFCO), Gujarat Cooperative Milk Marketing Federation (GCMMF), and Krishak Bharati Cooperative Limited (KRIBHCO) are leading performers in the agriculture sector. Moreover, Uralungal Labour Contract Cooperative Society (ULCCS) holds the second position in the industry and utility sector, while twelve cooperative banks, including six State Cooperative Banks (SCBs), four Urban Cooperative Banks (UCBs), and one credit society, are ranked among the top 300 cooperatives worldwide. These cooperatives not only excel in their respective fields but also significantly contribute to employment and entrepreneurship opportunities in the country.

Key Operational Reforms and their Impact

One of the pivotal reforms introduced by the Ministry is the transformation of Primary Agricultural Credit Societies (PACS) into core business entities within the cooperative structure. The introduction of Model Byelaws has enabled PACS to diversify their activities, allowing them to engage in over 30 different sectors. This expansion has significantly benefited the rural economy by improving agricultural linkages, providing customised credit access, and promoting renewable energy solutions and safe drinking water.

The ability of PACS to diversify has created new business opportunities, leading to increased demand for skilled labour. For instance, PACS involved in renewable energy projects require engineers, technicians, and project managers, thus generating new employment opportunities. Similarly, PACS that expand into sectors like food processing, warehousing, and agro-tourism create jobs for various professionals, from agronomists to hospitality managers.

Additionally, the establishment of new national cooperatives such as Bhartiya Beej Sahakari Samiti Limited, National Cooperative Organic Limited, and National Cooperative Exports Limited has created numerous employment opportunities. These cooperatives require technical professionals from various fields, thereby offering new job prospects for the youth.

Financial and Administrative Reforms

The Ministry's tax reforms, offering deductions and exemptions, have alleviated the financial burden on cooperatives, enabling them to reinvest in growth and development. The digitalisation of Registrar of Cooperatives offices has streamlined the registration process, enhancing regulatory support and improving governance. Moreover, the creation of a National Cooperative Database has facilitated better planning and implementation of more impactful initiatives.

These financial reforms have provided cooperatives with the capital needed to expand their operations and hire more staff. By reducing tax liabilities, cooperatives can allocate more resources towards hiring skilled professionals and investing in training programmes. This approach not only boosts employment but also enhances the overall efficiency and productivity of cooperatives.

The amendment of the Multi-State Cooperative Societies Act 2002 aims to enhance transparency and governance within multi-state cooperatives, ensuring more efficient and accountable operations. This legal reform has instilled greater confidence among members and stakeholders, encouraging more active participation and investment in cooperatives.

Employment Opportunities and Support

Cooperatives have emerged as pivotal agents in fostering employment across various sectors, exemplifying their role in economic empowerment and community development. For instance, Amul not only sustains livelihoods through milk collection, processing, and marketing but also serves as a model for job creation within the dairy industry. Similarly, fertilizer cooperatives like IFFCO and KRIBHCO bolster manufacturing, logistics, and distribution sectors, providing substantial employment opportunities. Credit cooperatives contribute by expanding financial services, thereby generating jobs in banking, while sugar cooperatives stimulate employment in sugarcane cultivation, milling, processing, and allied industries.

Beyond traditional sectors, cooperatives are diversifying into new domains under progressive policy frameworks, aiming to harness untapped potential and create employment avenues, particularly for the youth. The expansion into sectors like multi-state cooperatives such as Bhartiya Beej Sahakari Samiti Limited, National Cooperative Organic Limited, and National Cooperative Exports Limited, demands specialised skills in agronomy, organic farming, export management, and other technical domains. These developments present lucrative career paths, contributing significantly to reducing unemployment rates.

Moreover, the Ministry's initiatives facilitate the scaling up of cooperative operations, necessitating technical expertise in emerging fields such as renewable energy. For instance, Primary Agricultural Credit Societies (PACS) venturing into solar and biogas projects require engineers and technicians proficient in sustainable energy systems. Additionally, the digital transformation of cooperative operations and the establishment of a National Cooperative Database have spurred demand for IT professionals adept in data analysis, software development, and cybersecurity.

As cooperatives diversify their activities, there is a growing need for administrative and technical personnel to manage expanded operations and ensure compliance with regulatory frameworks. This expansion not only creates jobs within cooperative departments at state and union levels but also enhances administrative efficiency and governance standards.

Furthermore, mentorship programmes offered by established cooperatives to newer entities, akin to the support models used by Self-Help Group (SHG) federations, play a crucial role in expanding business horizons. These programmes not only foster business growth but also create employment opportunities for mentors and trainers, enriching the cooperative ecosystem with skilled professionals.

In addressing rising unemployment, cooperatives embody a sustainable solution by promoting community-driven development and collective ownership. By nurturing local economies and providing stable employment, cooperatives contribute significantly to socio-economic progress. They stimulate secondary job creation through extended value chains, demonstrating their role in fostering social entrepreneurship and self-employment opportunities.

Through collaborative efforts with educational institutions and professional organisations, the Ministry of Cooperation ensures continuous skill development among cooperative members. This proactive approach cultivates a skilled workforce capable of driving innovation and sustainable growth across diverse cooperative sectors.

Government Support and Future Prospects

The government's commitment to revitalising the cooperative sector is evident through various supportive interventions. These include reviving sugar mills, expanding the National Cooperative Development Corporation (NCDC) to offer comprehensive support, and integrating cooperatives into the Government e-Marketplace (GeM) portal as buyers. Collaborations with institutions like the National Cooperative Union of India (NCUI) and the National Council for Cooperative Training (NCCT) have led to numerous education and training programmes aimed at enhancing technical skills and professionalism within cooperatives.

Reforms in cooperative banking seek to improve efficiency and financial stability, while a new National Cooperation Policy under development aims to harmonise cooperative legislation across states, strengthen cooperative education, and extend the movement's reach.

The government's proactive approach was highlighted in the recent national workshop, "Chintan Shivir," part of the "Viksit Bharat: Vision 2047" series during the month of March 2024, underscoring the commitment to using cooperatives as a vehicle for national development.

The Ministry of Cooperation's forward-looking policies and initiatives are setting the stage for a resilient and dynamic cooperative sector. By fostering innovation, promoting sustainability, and enhancing economic inclusivity, these reforms are positioning cooperatives as key drivers of national development.

Conclusion

The Ministry of Cooperation's transformative initiatives over the past three years have revitalised the cooperative movement in India, creating a robust framework for sustainable economic growth and development. These reforms have not only strengthened cooperatives but also significantly increased employment opportunities, directly addressing the pressing issue of unemployment in the country. The government's unwavering support and the international recognition of cooperatives underscore the importance of this sector in building a resilient and inclusive economy.

As the Ministry continues to implement forward-looking policies and initiatives, the cooperative sector is poised to play a crucial role in driving India's economic progress. The celebration of the International Year of Cooperatives in 2025, alongside the ICA Global Conference in New Delhi, will further highlight the achievements and future potential of the Indian cooperative movement. The cooperative model, with its emphasis on community-driven development and shared ownership, offers a sustainable solution to unemployment and economic disparities, paving the way for a prosperous and equitable future for all.

The authors are Adviser (Research & Study),and Research Officer, National Cooperative Union of India, New Delhi.  Feedback on this article can be sent to feedback.employmentnews@gmail.com)

Views expressed are personal.