UNIVERSITY OF MUMBAI A PROJECT REPORT ON “CO-OPERATIVE MOVEMENT IN MAHARASHTRA” IN PARTIAL FULFILLMENT OF BACHELOR OF MANAGEMENT STUDIES (BMS – V SEMESTER) 2005 – 2006 SUBMITTED BY SOMNATH PAL PROJECT GUIDE PROF. SEEMA UNIKRISHNAN MAHATMA EDUCATION SOCIETY’S PILLAI’S COLLEGE OF ART, SCIENCE & COMMERCE NEW – PANVEL - 410206
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UNIVERSITY OF MUMBAI
A PROJECT REPORT ON“CO-OPERATIVE MOVEMENT IN MAHARASHTRA”
IN PARTIAL FULFILLMENT OFBACHELOR OF MANAGEMENT STUDIES
(BMS – V SEMESTER)2005 – 2006
SUBMITTED BYSOMNATH PAL
PROJECT GUIDEPROF. SEEMA UNIKRISHNAN
MAHATMA EDUCATION SOCIETY’SPILLAI’S COLLEGE OF ART, SCIENCE & COMMERCE
NEW – PANVEL - 410206
CERTIFICATE
This is to certify that the project entitled “CO-OPERATIVE MOVEMENT IN MAHARASHTRA” submitted by MR. Somnath Pal has been successfully completed during Bachelor of Management studies semester v academic year 2005-06 in partial fulfillment of Bachelor of Management studies course under University of Mumbai through Mahatma Education Society’s pillai’s college of Arts, Science and Commerce, Panvel-410206 Navi Mumbai.
Date: (PROJECT GUIDE)
ACKNOWLEDGEMENT
I sincerely thank and acknowledge the guidance rendered to me by Prof: seema unikrishnan who has been a source of unparallel inspiration to me in successfully pursuing my studies and project work related to the course.
I wish to state my successful completion is attributed and directly related to the efforts and guidance provided by her.
I further wish to thank Mrs. Joyti j. Naik (President, Shri Mahila Griha Udyog Lijjat Papad) all the other professors and the non – teaching staff of the institute for help extended by them.
Lastly I thank all my batch mates for all the support that they extended to me.
Somnath Pal
Sr.No. Topic Page No.
1.
EXECUTIVE SUMMARY
2. Philosophy of Co-operation
3. Itihaas - History of Co-operative Movement
Co-operative movement world wide Co-operative movement in India
Co-operative movement in maharashtra
4. SANSAAR - Co-operative Movement in Maharashtra
Agricultural societies
Non-agricultural societies
5. Prashaasan - Organization of Co-operation Department in Maharashtra
6. NIYAMAN - Laws of the Co-operatives
7. SHIKSHAN - EDUCATION AND TRAINING
8. Nirmaan - Formation of Societies
9. TAARAANGAN- THE SHINING EXAMPLES
10. YOJANAA - The Schemes of Progress
11. PROBLEMS OF CO-OPERATIVES IN MAHARASHTRA AND THEIR REMEDIAL MEASURES
12.Shri Shri Shri Mahila Griha Udyog Lijjat Papad
13. CONCLUSION
EXECUTIVE SUMMARY
The evolution of Co-operative in the world can be traced from time immemorial, beginning
from the day individual first joined hands for the advancement of common pursuits in life.
Modern Co-operative Movement is generally dated from the foundation of the Rochdale
Equitable pioneers at the end of 1844. The structure and rules of the Rochdale Co-operative
Society of weavers formed the model for countless successors not only in England but also
in other countries and continents. In India Co-operative movement in its modern form
started in the year 1904 with the advent of Co-operative Credit Societies Act on 25th
March 1904. The movement has been acknowledged as an instrument towards achieving
the socio- economic transformation of Indian society with special focus on the life of
people living in rural areas.
Co-operation since inception has been striving hard to usher socio-economic development
of our country. It is with the concerted and sustained efforts over decades by the Co-
operatives that they have about 21 crores membership covering 67% of rural households
and 99% of the villages in our country.
Indian Co-operative Movement was basically organized against the exploitation of
unscrupulous money-lenders to exonerate the farming community from the web of poverty
and indebtedness. The Government took lot of measures to improve the conditions of the
farming sector and as such promoted Co- operative Credit Societies in the light of
Raiffeisen model credit societies on the basis of recommendation of Sir Fredrick Nicholson
1889. Now co-operatives and formal legal entities under a statute have been existence for a
hundred years .It is, therefore, an appropriate time to discuss the pace of its progress and
emerging challenges in the competitive business environment.
Orissa Review * December - 2004
To-day Co-operative movement in India is one of the largest movements in the world.
Initially it was started with a limited spectrum of activities or dispensation of rural credit
has now entered in all fields of economic activity with social content. We are proud of the
movement which has covered 100 per cent villages and 75 per cent rural households and
functioning over 545 thousand Co-operatives of various levels with membership coverage
of 236 million and working capital of 34,00,555 million inclusive of credit and non-credit.
It has been playing a significant role in disbursing agricultural credit, distribution of
agricultural inputs, providing market support, processing, etc. The share of Co-operatives
in National economy is as follows:
Rural Net work (villages covered) - 100%
Agricultural Credit disbursed by Co-operatives - 46.15%
Fertilizer disbursed (6.049 million Tonnes) - 36.22%
Fertilizer production (3.293 M.T. - N&P) Nutrient - 27.65%
Sugar produced (10.400 million tonnes) - 59.0%
Capacity Utilization of Sugar Mills - 111.5%
Wheat Procurement (4.50 million toones) -31.8%
Animal Feed Production/Supply -50%
Retail Fair Price Shops (Rural + Urban) - 22%
Milk Procurement to Total Production- 7.44%
Milk Procurement to Marketable surplus -10.5%
Ice Cream Manufacture - 45%
Oil Marketed (Branded) - 50%
Spindlage in Co-operatives (3.518 million) - 9.5%
Cotton Marketed / Procurement - NA
Cotton yarn/Fabrics Production - 23.0%
Handlooms in Co-operatives -55.0%
Fishermen in Co-operatives (Active) - 21%
Storage Facility (Village level PACS) - 65.0%
Rubber processed and marketed - 95.0%
Arecanut processed and marketed - 50%
Direct employment generated - 1.07 million
Self-Employment generated for persons - 14.39 million
Salt Manufactured (18,266 Metric Tonnes) - 7.6%
(Excerpts: Profile of Indian Co-operative Movement-2002)
The statistics here indicates that modern cooperative movement has made tremendous
progress in every walk of its activities and occupies a major place in the share of the
National economy. Thus the importance of Co-operative movement cannot belittled.
This project deals with cooperative movement in Maharashtra, Which is one of the major
States of India. It is also the most urbanized and industrialized State. Co-operative
movement is widespread and has a long history in Maharashtra and even today it plays an
important role in the economy of Maharashtra. In this project I tried to cover each and
every aspect of cooperative movement in Maharashtra i.e. history of cooperative movement
in Maharashtra, the organization of cooperation department in Maharashtra law of
cooperatives in the state of Maharashtra, e.t.c. which will clear your doubts on working of
cooperative sectors in maharashtra.
Itihaas - History of Co-operative Movement
Co-operation is a worldwide phenomenon. Experiments in co-operation have been carried on for over a century. In India the phenomenon came a little later. This section deals with the Itihaas- the history of co-operation movement.
Co-operative Movement World Wide.
Co-operative Movement in India.
Co-operative Movement in Maharashtra.
Co-operative Movement in the World
The earliest co-operatives were set-up among the weavers, in other words workers in
cottage industries, who were the first and the hardest hit by the development of the
mercantile economy and the industrial revolution.So the weavers, in order to gain access to
the market in the tools of their trade or to the market in foodstuffs set up the first co-
operative in Scotland (Fenwick, 1761; Govan, 1777; Darvel, 1840), in France (Lyons,
1835), in England (Rochdale, 1844) and in Germany (Chemnitz, 1845).
Though co-operation and mutual enterprise has been an essence of human-society ever
since it evolved, the real co-operative movement can be credited to the Rochdale Pioneers
who established a co-operative consumer store in North England. This store can be called
as the first in the co-operative consumer movement.The "Rochdale Pioneers", made their
first aim to establish co-operatives where the members would not only be their own
merchants but also their own producers and their own employers.Around this time the co-
operative movement was more at a utilitarian level. The concept though old was just being
implemented and was growing slowly. Many great thinkers, far-sighted men and
visionaries were applying their minds to find practical solutions to the new problems and to
work out better systems of social organization.
In Great Britain Robert Owen (1771-1858) conceived and set up self-contained semi-
agricultural, semi-industrial communities.Dr. William King (1758-1865) helped to spread
Owen’s doctrine, his ideas were more reasonable than Owen’s and achieved more results.
In France Saint-Simon (1760-1865) worked on various theories of "associations".But it was
Proudhon (1796-1865) who advocated mutual aid and "free credit" for free access to the
money market and Buchez (1796-1865) who championed the idea of inalienable collective
capital and workers’ production co-operative societies.Schulze-Delitzsch (1808-1883) was
the apostle of urban credit co-operatives and co-operatives in handicrafts, while
F.W.Raiffeisen (1818-1888) did the same for rural credit co-operatives.
Though all these visionaries had articulated the philosophy of co-operation it was not until
the World-War II that an Authoritative Commission was appointed by the International Co-
operative Alliance.
This Commission formulated or rather formalised the principles of co-operation.
They are
1. Voluntary and open membership
2. Democratic Management
3. Limited interest on capital
4. Patronage dividend in proportion of members’ transactions
5. Education and Training and
6. Co-operation among co-operatives
There have been also other principles like the principles of political neutrality, correct
weight and measures, purity of goods and thrift, which were also taken into consideration.
These principles have been reformulated recently by the Manchester Congress in 1995 and
now the principles of co-operation are as follows:
Ist Principle: Voluntary and Open Membership:
Co-operatives are voluntary organizations, open to all persons who use their services and
willing to accept the responsibilities of membership, without gender, social, racial, political
or religious discrimination.
IInd Principle: Democratic Member Control:
Co-operatives are democratic organizations controlled by their members, who actively
participate in setting their policies and making decisions. Men and women serving as
elected representatives are accountable to the membership. In primary co-operatives
members have equal voting rights (one member, one vote) and co-operatives at other levels
are also organized in a democratic manner.,
IIIrd principle: Member Economic Participation:
Members contribute equitably to and democratically control the capital of their co-
operative. At least part of that capital is usually the common property of the co-operative.
Members usually receive limited compensation if any, on capital subscribed as a condition
of membership. Members allocate surpluses for any or all of the following purposes:
developing their co-operative, possibly by setting up reserves, part of which at least would
be indivisible, benefiting members in proportion to their transactions with the co-operative
and supporting other activities approved by the members.
IVth Principle: Autonomy and Independence:
Co-operatives are autonomous, self-help organizations controlled by their members. If they
enter into agreements with other organizations, including governments or raise capital from
external sources they do so on terms that ensure democratic control by their members and
maintain their co-operative autonomy.
Vth Principle: Education, Training and Information:
Co-operatives provide education and training for their members, elected representatives,
managers and employees so that they can contribute effectively to the development of their
co-operatives. They inform the general public particularly young people and opinion
leaders about the nature and benefits of co-operation.
VIth Principle: Co-operation among Co-operatives:
Co-operatives serve their members most effectively and strengthen the co-operative
movement by working together through local, regional, national and international
structures.
VIIth Principle: Concern for Community
Co-operatives work for the sustainable development of their communities through policies
approved by their members.
The seventh Principle was added at the Manchester Congress of 1995.
Co-operative Movement in India
Co-operation occupies an important place in the Indian economy. Perhaps no other country
in the world is the co-operative movement as large and as diverse as it is India. There is
almost no sector left untouched by the co-operative movement.
The main areas of operation of co-operatives in India are as under.
1. Agricultural Credit
2. Agricultural supplies
3. Agricultural Marketing
4. Agricultural Processing
5. Functional co-operatives in the fields like dairy, poultry, fisheries, fruits, vegetables
etc.
6. Industrial co-operatives
7. Public Distribution of essential commodities through consumer co-operatives
8. Urban credit Co-operatives
9. Housing co-operatives
Co-operative movement in India is the result of a deliberate policy of the state and is
vigorously pursued through formation of an elaborate governing infrastructure. The
successive Five-year plans looked upon the co-operation movement as the balancing sector
between public sector and the private sector.And the success is evident. Almost 50 percent
of the total sugar production in India is contributed by sugar co-operatives and over 60
percent of the total fertilizer distribution in the country is handled by the co-operatives. The
consumer co-operatives are slowly becoming the backbone of the public distribution
system and the marketing co-operatives are handling agricultural produce with an
astounding growth rate.
The National Co-operative Development Corporation (NCDC), a statutory body was set up
in 1963 by the Union ministry of Civil Supplies and Co-operation, to promote the co-
operative movement in India.Further there is the Indian Farmers Fertilizer Co-operative
LTD (IFFCO), which has been successful in setting up an effective marketing network in
most of the states for selling modern farming technology instead of fertilizers alone. The
operations of IFFCO are handled through its more than 30,000 member co-operatives.The
National Agricultural Co-operative Marketing Federation (NAFED) has over 5000
marketing societies. These societies operate at the local wholesale market level and handle
agricultural produce. Thus the farmers have a market for their produce right at their
doorstep. A market, which assures them reasonable returns and guaranteed payments.All
these Federations are acting like the spokesmen of member co-operatives and are doing
liaisioning work between the co-operatives and the Government.
In India we find that the states of Maharashtra and Gujarat are well developed. Whereas
the states of Andhra Pradesh, Rajasthan and Karnataka have shown remarkable progress in
the co-operative movement and there is a vast potential for the development of co-
operative in the remaining states.
Co-operative Movement in Maharashtra
Maharashtra is one of the major States of India. It is also the most urbanized and
industrialized State.Co-operative movement is widespread and has a long history in
Maharashtra and even today it plays an important role in the economy of Maharashtra. The
genesis of the co-operative movement in Maharashtra can be divided into six stages.
1. The pre-co-operative stage (1870-1903)
With the Deccan Agriculturists’ Relief Act, The land Improvement Loan Act 1883 and the
Agricultural Loans Act, the Nickolson Report.
2. The Initial Stage (1904-1911)
From the Agricultural Credit Co-operative Societies Act 1904 to the creation of the
Bombay Central Co-operative bank.
3. The Evolution Stage (1912 to 1924)
After the Co-operative societies Act of 1912, the movement passed through a new phase of
re-organization: formation of co-operative financing agencies, formulation of co-operative
educational schemes and organization of non-credit societies.
4. The Stagnation Stage (1925-1947)
The enactment in 1925 of the Bombay Co-operative Societies Act widened the cope of the
movement in the Bombay province both horizontally as well as vertically. The Bombay
Co-operative Insurance Society was established in the year 1930. In the same year the Co-
operative Land Mortgage Bank was also formed for long term financing for redemption of
debts, land improvement and purchase of land.
5. The Growth Stage (1948-1961)
There was an all-round progress during these two decades after India attained
Independence from the British Rule. The movement diversified especially in the rural area
where sugarcane was grown. The agriculturists pursued this concept of self-help and made
the best use of the credit facilities given to them for augmenting the production. Examples
like the Pravaranagar Sugar Co-operative inspired many to organize co-operatives in the
sugar sector with long-term goals in mind. Significant attitudinal changes had occurred at
the grass root level.This was also the period of emergence of rural leadership through co-
operative movement.The Apex Bank also started to strengthen its organization and the
working of the secondary level central financing agencies. This was also the period where
institutional foundation was strengthened.
6. The Diversification Stage (1962 onwards)
Expansion, accompanied by extensive vertical and horizontal diversification embraced all
fields of socio-economic activity with gains varying from 2 to 6 times.The State
government initiated policies and programs to strengthen the co-operative effort. Some of
the noteworthy features of the movement during this period were the increased
mobilization of resources, strengthening the co-operative effort in the sphere of agricultural
production and the building of rural leadership.The State Co-operative Bank also built up
the necessary strength to provide support to the government programs of intensive
production and procurement of food grains, financing of sugar factories and other new
industries in the co-operative sector.The co-operatives have helped the rural economy of
Maharashtra tremendously. It has been able to groom grass root level leadership and bring
about peaceful socio-economic changes and help institutionalize the rural economy to a
considerable extent.
The following table shows the progress of the Co-operative Movement in Maharashtra
Commissioner for Co-operation & Shri Dr. Sudhir Kumar Goel I.A.S (Central Building,
Pune 411 001) (020) 6122500
Registrar Co-operative Societies,
Maharashtra State, Pune.
At each Revenue Division Headquarters viz. Mumbai, Pune, Nagpur, Amravati, Nasik and
Aurangabad. The Administration Wing is headed by Divisional Joint Registrar, Co-
operative Societies and the Audit Wing is headed by the Divisional Joint Registrar, Co-op
Societies (Audit) District Deputy Registrar Co-op societies and the District Special Auditor
Co-op societies are the District heads of Administration and Audit of co-operative
department at each district in the State. At the Taluka Level, there are Taluka Assistant/
Deputy Registrars and Taluka Auditors to carry out the functions of Administration and
Audit respectively.
The hierarchy of the co-operation department is given as under.
Commissionerate of Sugar.
Directorate of Marketing.
NIYAMAN
Laws of the Co-operatives
Co-operation is an activity of the people. It is a self-generated, voluntary and self-sufficient activity. Hence little governmental interference is desirable. However considering the economic parameters of this movement and interests of several persons involved there is a possibility of misuse of personal power by any of the group-members. The governments therefore had to pass legislation to monitor the activities of the co-operatives mainly with the purpose of safeguarding the interests of all the members.Great Britain for example had passed legislation as early as 1852. Similar intervention of legislature can be seen in Germany and France (1867) and Italy (1883).
In Maharashtra the Co-operatives are governed by the Maharashtra Co-operative Societies Act 1960 and supported by Maharashtra Co-operative Societies Rules, 1961. The legal system in the co-operatives registered in Maharashtra State is elaborate. Moreover each co-operative should have its own Byelaws, which are the guiding principles of the co-operative. These Byelaws have to be approved through a resolution of the Society. These byelaws can be amended in the General body Meeting of the co-operative. The only condition on the byelaws is that they should not be contrary to the Maharashtra Co-operative Societies Act, and have to be approved by the Registrar.
The legal framework essentially covers the following aspects:
Registration of Co-operative Societies Rights of the members
Privileges of the Societies
Property and Funds of the Society
Management of the Society
Audit, Inquiry and Inspection
Disputes
Liquidation of Societies
Offences and Penalties
Appeals, Reviews and Revision
A co-operative society can be registered in Maharashtra State with the Registrar of Co-operative Societies.
Any person competent to contract, as per the Indian contract Act, 1872 can join in the formation of a co-operative.
A group of ten persons who reside in the area of operation of the proposed society and are from different families, can join in application for registration of a society
A society with the objects of promoting the economic interests or the general welfare of the members only can be registered.
No society that is contrary to the policy directives of the State can be registered.
Registration can be obtained from the registrar on filling up the application form with the necessary fees and the byelaws.
Division/Amalgamation/Transfer and conversion of a co-operative is allowed
A Co-operative Society can enter into collaboration with any Government Undertaking or any other undertaking with the prior permission of the State Government for business.
It can also enter into a partnership with other co-operatives.
The legislation provides for open membership. Eligible person can appeal to the Registrar if his membership application is rejected
by the society.
A person can file membership application to the Registrar, if it is not accepted by the society.
A member has voting rights in election of the Managing Committee and in general meeting of the members. Every member has one vote, irrespective of the total number of shares held by him. Proxy voting is not allowed
A member can inspect the books of account of the society and obtain its copies.
There are three types of members in a society - Nominal, Associate and Sympathiser. A Nominal or a Sympathiser member cannot possess shares of the society and as such do not have the rights of an associated member.
A Society is a Body Corporate by the name with perpetual succession and common Seal.
It can acquire, hold and dispose off property in its name.
It can enter in a contract.
Institute and defend suits and other legal proceedings.
It is exempted from compulsory registration of Instruments relating to shares and debentures of Society under the Indian Registration Act 1908
The society has claim only next to the Government, on the property and interest of the borrowing members.
The society has claim over the sale price of agricultural produce of the borrowing member.
It is mandatory on the part of the employer to deduct from the salary of the employee, dues of the Society, if agreed upon by the member.
The Society can receive deposits and loans from the members and other persons within the area of operation of the Society and /or on conditions imposed by the Registrar
Loans can be advanced to the members only. With the prior permission of the Registrar, loans can be advanced to other Societies.
The Society has to keep and maintain updated records in prescribed format.
There are restrictions on the transactions with the non-members.
The final authority of the Society vests in the General Body of the Society comprising of all the members.
Every Society shall call Annual General Meeting within a period of three months after the date fixed for completing or drawing up of its accounts for the year.
At every Annual General meeting, the Managing Committee shall lay a statement of loans given to the members of the Managing Committee and their family members, Income and Expenditure Account, Balance Sheet, a Report by the Managing Committee regarding the Society’s affairs. Failure to do so may attract the disqualification of the members of the Managing Committee and other penalties.
A Special General Meeting can be called by the Chairman of the Co-operative or by majority of the members of the Managing Committee. Members too can requisition for such a meeting if 1/5 Th of the total members of the Society endorse this requisition. The Registrar also has the powers to call for a Special General meeting. So can the committee of the Federal Society do so. Failure to call for this meeting may attract penalty for the Managing Committee.
It is the duty of every Managing Committee to arrange for holding of elections of its members before the expiry of its term.
Election to a Specified Society shall be conducted by the Collector and that of a Notified Society by the Registrar.
Management of the Society vests in a duly constituted Managing Committee. Reservation for the weaker section, women and scheduled castes/tribes has been
provided in the Managing Committee. No committee is duly constituted unless the Registrar publishes the names of the
members of the Managing Committee along with their addresses. If a Managing Committee of a Society is not duly constituted, the Registrar may
appoint an Administrator. An Administrator can also be appointed (for a period of six months) by the
Registrar if the Managing Committee is removed for negligent performance as per the provisions of Co-operative Law. A member of the Managing committee can also be removed by the Registrar for negligent performance.
The Managing committee can appeal against its removal / dismissal. Office bearers of a Society can be removed by the way of No confidence motion.
Such a no confidence motion has to be supported by at least one-third of the members of the managing Committee. Removal from office is effected only after the resolution is passed by a simple majority in the Managing Committee.
No funds shall be divided among its members, other than the net profits earned by the Society.
The society’s funds cannot be utilized to defend any proceedings filed by or against any office bearer of the Society, in his personal capacity under sections 78, 96 or 144-T of the Maharashtra Co-operative Societies Act, 1960.
Remuneration can be paid to the Managing Committee members for services provided by them to the Society.
Net Profit earned by the Society can be appropriated by the members with the approval of the Annual General Meeting.
Reserve fund shall be maintained by the Society Investments of Funds shall be made as per the guidelines prescribed in the
Maharashtra Co-operative societies Act, 1960
The Registrar of Co-operative Societies makes it compulsory for every Government -aided Co-operative Society to audit its accounts at least once in a co-operative year (i.e. April - March).
All the other Societies also have to get their accounts audited by a Certified Auditor once in every co-operative year.
A Registrar has powers to order the Society to be re-audited. This is however done by him slow-motion or in the case where 1/3rd members of the Society apply to him for re-audit.
The Registrar can inspect the working of the Society on his own or on application of its creditors.
The Registrar can commission an inquiry into the affairs of the Society on the basis of the audit report or an inspection report. He can appoint an Inquiry Officer and conduct an inquiry through him. Similarly he can also conduct inspection of a Society just to ascertain that all the Books of Accounts are being maintained properly and that the affairs of the Society are being conducted reasonably by the Managing Committee.
The Registrar can order for compensation, if it is found That any person has misapplied or retained any property, or money of the Society, or has caused breach of trust.
Performance or Cost Audit Test Audit
Social Audit can also be conducted on the affairs of the Society.
Disputes can be raised by any member regarding Election of a Managing Committee, or the Officers. Disputes can also be raised about the conduct of the
General Meeting and the management or business of the Society. 7Such disputes can be settled in special courts, which deal with only the Co-operative matters. These courts are called as Co-operative Courts.
In the case of disputes, which arise due, to recover of sums disbursed by the co-operative society. The Co-operative Court can attach the property of a member, if it is likely to be disposed off .A certificate then issued by the official assignee or by an authorized person or by the Co-operative Court itself shall be executed as a decree of a Civil Court and also executed as arrears of land revenue. Any private transfer of the property thereafter, shall be null and void against the claim Society.
A Society can be wound up, after inquiry and audit, or on application or by the Registrar on his own, if found that the Society has not commenced and/or has ceased to function.
Appeal against the order of liquidation can be made by the members. The Society registration can be cancelled on receipt of the final report from the
liquidator and the last General Meeting. The Society can also be cancelled if its affairs are wound up, or if it is de-registered
or its assets and liabilities are transferred.
Following are the offences, which are punishable under the Maharashtra co-operative Societies Act:
Transfer of property on which there is a charge of the Society Failure to deduct dues of the Society from the Salary of an employee Failure to invest funds of the Society Failure to deposit the share money of the Society with the Bank Conduct private business in the name of the Society Collecting share money by misrepresentation Issuing of false share certificates knowingly Failure to call. General Body Meeting Failure to give necessary assistance to authorized persons under the Co-operative
Law Failure to hand over the custody of records and property to the administrator or the
liquidator Failure to observe directives of the Registrar Willful neglect of furnishing any information required by the Registrar and the
Auditor Making of false returns Failure to comply with any decision, award or order Fraudulent disposal of any property on which society has prior claim. Destruction, mutilation, tampering, altering, falsifying records of the Society.
Punishments can comprise of penalty up to Rs.5000/- and/or imprisonment up to three years.
The remedy of appeal is provided against refusal of Registration or amendment of bye-laws, division, amalgamation, conversion, cancellation, de-registration, transfer of shares, refusal and expulsion of membership, removal of managing committee, directives to Society, cost of Inquiry and Inspection ordered by the Registrar, fixing liability on delinquent promoters, winding up or rejection of nomination in election of committee.
Review and Revision of orders passed by the Registrar can be made against any other order to higher authorities
The Maharashtra State Co-operative Appellate Court is constituted for appeal against or seek revision /review of, the orders of the Co-operative Court.
An appeal against the order of Assistant Registrar/ Deputy Registrar lies with the Joint Registrar (Appeals). If the order is passed by the Joint Registrar/Additional Registrar or the Registrar then the aggrieved party can appeal to the State government.
SHIKSHAN - EDUCATION AND TRAINING
Co-operation is a movement of the masses. It essentially involves collective capital and
hence the responsibility is of all the members to make the co-operative venture successful.
The first essential factor required is therefore an understanding of the concept and
principles of co-operation. Therefore education and training is very important.This fact was
realized by the Equitable Pioneers of Rochdale, who are truly the pioneers of the co-
operative movement. They had, before launching their co-operative venture in 1844 had
spent over a year in study of the problems. The Pioneers had included education among
their objects! They had actually set aside 2.5% of their trading surplus towards education.
They set up a school for young persons as early as 1850. Subsequently their Board granted
the use of a room to members for mutual instruction on Sundays and Thursdays. Later they
organized science and arts classes in the evenings, at a time when night schools were little
known.
The constant emphasis on education can be explained in the words of Charles Gide,
"Common people with the ambition to provide for their own needs, and become their own
merchants, bankers and creditors, their own employers and their own insurers would
indeed be imprudent if they did not first equip themselves with the knowledge and faith
necessary for the task.’It has to be realized that most of the co-operatives, which are
organized, are by and for people from the more underprivileged sections of the society.
Education therefore becomes very important if the co-operative is aiming at the all-round
development of its members.
The Education Program has to be four-fold:
1.For the members:
It is the members who form the co-operative. They should well be aware of their rights,
privileges as well as duties. They should also know about the organization they have
joined, its philosophy, its objects, its culture and its ground-rules.Without the knowledge of
these facts the members will merely be names on the roll-register. They will not be able to
participate in the movement, contribute their skills to the co-operative nor will they be able
to point out the mistakes of the management committee at the annual general meeting.
2. For the Management:
Assuming that a group of people come together and form a co-operative, which intends to
do business and generate profit for its members, it is important that the members who are
elected to manage the co-operative should possess adequate managerial skills.It is therefore
necessary that the managing committee should also be educated not only about the
principles, practices and laws of co-operation but also about business management.
3. For Employees:
All the employees of a co-operative may not be members. It is therefore important to train
and educate them about the principles of co-operation as well as the objects of the
enterprise. The employees have to be trained to respond to the needs of the clients and
follow a fair trade practice. Without this understanding the best of the objects and
intentions of the co-operative are likely to fail.
4. For the Associates:
A business cannot be in a vacuum. There necessarily have to be transactions with a host of
business associates and colleagues, government officials, private persons and of course the
clients. All these persons too should understand about the principles and policies on which
you carry out your activity as a co-operative. This type of education makes the business
associates realize that they are not dealing with another organization but with a co-
operative, which ensures fair trade practice.
WHO GIVES THIS EDUCATION?
The International Co-operative Alliance has training facilities at the international level.In
India the National Co-operative Union undertakes this function. There are also State Co-
operative Unions in each state to impart education. Further there are Divisional Co-
operation Board and District Co-operative Bodies, which conduct this function at their
respective levels.
The Maharashtra State Co-operative Union takes care of the co-operative education and
training. It is mainly financed by an Education Fund; which every co-operative society
registered in the Maharashtra State has to subscribe to. Thus the goal of "self education
through self-help" is attained. In Maharashtra there is Vaikunth Mehta National Institute of
Co-operative Management , at Pune which offers a host of educational courses in co-
operative management. This is a unique Institute, which has international acceptance. The
courses are of advanced nature and for serious researchers/practitioners of Co-operation
Theory as well as for top-managers in co-operation sector. There are two more Institutes of
Co-operative Management (ICM’s) at Pune and Nagpur. These are the Padmashree
Vitthalrao Vikhe-Patil Institute of Co-operative Management, Pune and the Dr.
Dhananjayrao Gadgil Institute of Co-operative Management, Nagpur. These Institutes
impart education to the employees of the co-operatives and the Co-operation Department
who are working at the Middle Level.
There are thirteen Co-operative Training Centres, which impart training to the lower level
main object of the Bank is to “promote, propagate co-operative common-wealth in
Maharashtra State through socio-economic transformation by democratic means and co-
operative principles."Thus the MSC Bank provides re-finance facility to about 30 District
Central Co-operative Banks, which primarily cater to the needs of the agricultural sector in
the State.
The Bank also promotes finance to artisans; Agro-industrial co-operatives especially sugar
factories, spinning mills by providing medium term loans as well as interim loans.The
Bank has supported banking facilities to about 340 urban co-operative banks in the State by
providing credit limits. The Bank also sanctions working capital to the Urban banksThe
Bank thus has served the co-operative sector and has helped it to achieve sustained growth
over last nine decades.
The current position (1999) of the Bank is as follows:
(Rupees in Millions)
Share Capital 674.6
Reserve Fund 4725.7
Deposits 76494.0
Other Funds 2755.8
Borrowings 10186.4
Investments 35216.4
Loans & Advances 50431.7
Properties 67.3
Profit -3789.2 (mainly due to N.P.A. Provisions)
The Bank serves as a balancing center for the surplus resources of the co-operatives in the State. Apart from being the biggest State co-operative bank it is also one of the top-ten banks in India. Certainly it is shining example for all co-operatives
YOJANAA
The Schemes of Progress
The Government while understanding the importance of co-operatives has introduced
several schemes for promoting the spirit of co-operation. Both the Indian Government as
well as the Government of the State of Maharashtra has introduced several schemes for the
co-operatives. A few of them are listed here.
Scheme 1:
Share Capital Contribution to Credit Institutions under LTO Fund (State Level Scheme):
The Government sanctions share capital contribution to District Central Co-operative
Banks. This contribution is given out of the LTO Fund of the NABARD. The provision is
made every year to repay this loan.
Scheme 2:
Loans to Co-operative Credit Institutions for conversion of short-term loans into medium
term loans
Scheme 3:
National Agricultural Credit Stabilization Fund (Centrally Sponsored Scheme):
In drought conditions the members of Agricultural Credit Societies may not be able to
repay the crop loans. This scheme helps to convert their short-term loans into medium term
loans and fresh crop loans are made available to the members.
Scheme 4:
Crop Production Incentive to Agriculturists (Dr.Punjabrao Deshmukh Crop Production
Incentive Scheme):
This scheme is applicable for Kharif and Rabbi crops taken from 1.4.90 onwards. The
farmers borrowing loans of RS.25, 000 or less and who repay their loans fully before the
due date are eligible for 4 % of the principal amount as an incentive.
Scheme 5:
In the industrial co-operative societies of weaker sections of the societies, the Government
has several schemes.
The Government sanctions share capital in the ratio 1:3, to enable the societies to
borrow funds from the financial institutions.
Financial Assistance for Tools and Equipment’s:
The Government sanctions loans up to RS. 23,000/- to the members of such societies as
50% loan and 50% subsidy, for the purchase of tools and adopting improved methods of
production.
Loans and subsidies for the construction of Godowns, workshops/ worksheds:
The government gives upto Rs. 75,000/- (75% loan and 25% subsidy) to the societies
for construction of worksheds or Godowns.
Interest Subsidy for Working capital:
The government gives an interest subsidy upto 3.5% to 4.5% on the amount borrowed by
the co-operative. This scheme helps to reduce the burden of interest on the co-operative
society, which is to be paid to financial agencies.
Block Level Village Artisans Multipurpose Co-operative societies: grant-in-aid :
Under the scheme of employment guarantee to the rural artisans composite loans for
Medium term are given from Rs 30,000/0 to Rs. 50,000/- per member.
Scheme 6:
Central Sector Scheme for Development of Women Co-operatives:
Under this scheme financial assistance would be provided by the Central Government on
100 % basis to the newly formed co-operative societies by the women as well as existing
women’s co-operatives. The financial assistance is as under
No. Item Share Capital Working Capital Subsidy Total
Grant of financial assistance to Scheduled Castes / Nav buddhas marginal farmers
for the purchase of shares of co-operative sugar factories:
Financial assistance is given to the above-mentioned categories of persons to acquire share
in sugar factories. These loans are in terms of 50% interest free loans and 50 % subsidy.
Financial aid for purchase of Shares in Sugar factories to Adivasis
Grant-in- Aid to sugar factories for road construction works in sugar factories:
Assistance to the tune of Rs 3/- per tonne of sugarcane crushed is given to the sugar co-ops
for construction of roads.
Grant of loans to financially weak and sick co-op sugar factories for rehabilitation
Share Capital Contribution in co-op Sugar factories (NCDC) :
NCDC sanctions upto 50 % of Government Share capital in developed areas and 65 % of
the Government share capital in non- developed areas.
Scheme 8 : Co-operative Godowns :
The Warehousing Corporation provides 90% assistance for the construction of Godown
out of which 50% is loan and 40% is Government share capital.
PROBLEMS OF CO-OPERATIVES IN MAHARASHTRA AND THEIR REMEDIAL MEASURES
POOR PERFORMANCE AND LOSS OF FINANCIAL VIABILITY
REMEDY: Co-operatives will need to explore other non- conventional avenues for raising resources needed for modernizing their operations and meeting their working capital requirement. Issue of non-voting shares and borrowing from the financial institutions and the public are two such avenues. Also, there is a need for reforms in the co-operative law to eliminate the inherent weakness of the financial structure of co- operatives. Co- operatives will also need to be redesigned and re – engineered in terms of their organizational structure, bye – laws, rules, regulations, operating procedures and practices.
LACK OF PROFESSIONALISM IN MANAGEMENT
REMEDY: Reorienting and equipping the existing institutes of co – operative management and junior level training centres for training barefoot managers. National level management institutes like Vaikunth Mehta Institute of co- operative management, Pune cold help in developing appropriate curriculum for the purpose of training teachers/ trainers and preparation of appropriate teaching and training materials.
EXCESSIVE GOVERNMENT CONTROL AND POLITICAL INTERFERENCE
REMEDY: Co-operatives need to be provided a level playing field to withstand the growing competition in the new era. India’s leading co-operators like Dr. Verghese Kurien, L.C.jain and Mohan Dharia argue that it is only private companies that are reaping the benefits of liberalization, thanks to the corporate friendly government that has modified the existing legislation, administrative and financial rules and procedures, with a speed unprecedented in India’s recent history to remove various controls on the corporate sector.
POOR BOARD MANAGEMENT RELATIONS
REMEDY: The most important task of the board of directors of a co – operative is the appointment, direction and monitoring of its managers, and if necessary , their dismissal and replacement. If the board is not willing or is not able to do this job, the co-operative is doomed to failure or at best it becomes manager-controlled and therefore subservient to the personal interests.
LACK OF PERPORMANCE BASED REWARD SYSTEMS AND POOR WORK ENVIRONMENT
REMEDY: Co-operatives need to start learning the value of its human resources. It needs to understand the importance of its members and managers. There is a vital need of good human resource (HR) practices and better work environment to get better results from the people.
Better amenities and open and free environment in the work place will help deliver better results.
THE STRUCTURE:
Shri Mahila Griha Udyog, the makers of the famous Lijjat Papad, is an organisation
which symbolises the strength of a woman. All the women members are jointly the owners
of the organisation and are fondly referred to as 'sisters'. There is a central managing
committee of 21 members to manage the affairs of the organisation.
The organisation is wide-spread, with it's Central Office at Mumbai and it's 60
centers and 40 divisions in different states all over India. The organisation started of with a
paltry sum of Rs.80 and has achieved sales of over Rs.300 crores with exports exceeding
Rs. 12 crs.
Membership has also expanded from an initial number of 7 sisters from one
building to over 40,000 sisters throughout India. The organisation functions on the basis of
consensus.
AN OVERVIEW OF THE HISTORY:
It all began on 15th march. 1959 which was a warm summer day with the sun
shining brightly in the cloudless sky. A majority of the women inhabitants of an old
residential building in Girgaum (a thickly populated area of South Bombay), were busy
attending their usual domestic chores.
A few of them, seven to be exact, gathered on the terrace of the building and started
a small inconspicuous function. The function ended shortly, the result - production of 4
packets of Papads and a firm resolves to continue production. This pioneer batch of 7
ladies had set the ball rolling.
As the days went by, the additions to this initial group of 7 was ever-increasing.
The institution began to grow.
The early days were not so easy. The institution has its trials and tribulation. The
faith and patience of the members were put to test on several occasion - they had no money
and started on a borrowed sum of Rs. 80/-.
Self-reliance was the policy and no monetary help was to be sought (not even
voluntarily offered donations). So work started on commercial footing.
The success of the organisation stems from the efforts of it's member sisters who
have withstood several hardships with unshakable belief in 'the strength of a woman'. The
organisation functions on the basis of consensus.
With quality consciousness as the principle that guided production, Lijjat grew to
be the flourishing and successful organisation that it is today.
CORE VALUES :
Shri Mahila Griha Udyog Lijjat Papad is synthesis of three different concepts, namely
(1) The concept of Business
(2) The concept of family
(3) The concept of Devotion
All these concept are completely and uniformly followed in this institution. As a
result of this synthesis, a peculiar Lijjat way of thinking has developed therein.
The institution has adopted the concept of business from the very beginning. All its
dealings are carried out on a sound, pragmatic and commercial footing - Production of
quality goods and at reasonable prices. It has never and nor will it in the future, accept any
charity, donation, gift or grant from any quarter. On the contrary, the member sisters
donate collectively for good causes from time to time according to their capacity.
Besides the concept of business, the institution along with all it's member sisters
have adopted the concept of mutual family affection, concern and trust. All affairs of the
institution are dealt in a manner similar to that of a family carrying out its own daily
household chores.
But the most important concept adopted by the institution is the concept of
devotion. For the member sisters, employees and well wishers, the institution is never
merely a place to earn one's livelihood - It is a place of worship to devote one's energy not
for his or her own benefits but for the benefit of all. In this institution work is worship. The
institution is open for everybody who has faith in its basis concepts.
PRODUCTS:
Shri Mahila Griha Udyog manufactures various products from Papad, Khakhra,