History and legislative development of cooperatives in India vis-a -vis Sikkim

A Cooperative is defined as 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.

A Cooperative is based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. So, it is a member-driven and democratically self-managed association of persons united voluntarily for the achievement of common goal that stands for service, joint-action, self-reliance and economic-freedom with accountability and transparency. Cooperative members believe in the ethical values of honesty, openness, social responsibility and caring for others.

It is well said that leading a life in cooperative manner is not a new process, but it is old as human civilization. The system was formally institutionalized with the establishment of the International Cooperative Alliance (ICA) during 1895. The fathers of the Cooperative as a  System gave birth to noble Values and Principles of Cooperatives and applied them for the better understanding and propagation of this noble movement across the globe. The Values of Cooperative viz; Self-help, Self-responsibility, Democracy, Equity, Equality, and Solidarity; and the Principles are the Guidelines by which Cooperatives put their Values into practices in order to reach their noble goals. Each Cooperative is expected to adhere to these Guidelines or Principles of cooperatives in strict sense viz; Voluntary and Open Membership, Democratic Member Control, Member Economic Participation, Autonomy and Independence, Education, Training and Information, Cooperation among Cooperatives, and Concern for Community.

The past history says that during the agrarian movement in the Deccan, the peasants revolted against the money-lenders who were charging excessive rates of Interest on the loans so taken at the time of their dire needs. The peasants were compelled to take the law into their own hands and so confiscated the promissory notes and mortgage-
deeds from those money-lenders. These chaotic situations gave birth to Taccavi Legislation by the government leading to the formation of the Cooperative Societies. Then a series of famines broke out in our country from 1875 onwards that compelled the government to form a Famine Commission for finding ways and means in view of mitigating the fury of famine over the country, and improving the economic status of the peasants. The early forms of Cooperatives were the organization of Nidhis and Chit Funds in Southern India. It is also recorded that in 1892 one Civil Servant of the Madras Presidency named Sir Frederick Nicholson was sent to Europe to study the structures of Cooperatives out there. It was he who recommended the formation of the Rural Cooperative Credit Societies adopting the German pattern called Raiffeisen; and then the Government formed a Law Committee in 1901 which formulated a blue-print of the Cooperative Laws. Then the Primary Credit Societies were also formed by the Government of India with the enactment of the Cooperative Credit Societies Act 1904. With the Cooperative Societies Act 1912 the Government formed the non-credit Societies and also Federal Cooperative Organizations in the Country. The Maclagan Committee in 1915 declared that the area of operation of such a Society should be limited and small so that mutual knowledge, social cohesion and closer connection amongst its members be maintained and these were taken into consideration to be the guiding Principles. The said Committee also recommended that the Membership of a Cooperative Society should be open to all people belonging to different ethnic communities irrespective of their caste and creed.

According to the Government of India Act 1919, the Cooperative Societies turned into a transferred subject and many provinces began to enact their own Cooperative Societies Act. Again, with the Government of India Act 1935, these Cooperative Societies turned to be a State subject matter. Further, in 1945 the Cooperative Planning Committee declared that the Village Primary Credit Societies should have the coverage of those activities effecting the daily life and business of the agriculturists, artisans and the like; and thus, functioning as the Multi-purpose Societies (MPCSs). The said Committee also recommended the organization of Societies for fruits and vegetable growers, land reclamation, animal husbandry, fisheries, agricultural marketing and processing, small and subsidiary industry, labour, consumers, housing and urban credit etc.

The Reserve Bank of India in 1951, appointed the All India Rural Credit Committee (AIRCC) which submitted its detailed Report in the year 1954 whereby the said Committee recommended wide areas of operation for Village Societies with a view to uplift their economic viability and felt the necessity of reorganizing small Societies by the process of merger. The Committee further recommended government participation in the equity of such Cooperative Societies. Several Committees have examined minutely the working system of Cooperatives in India with a view to make them  powerful instruments in the socio-economic up-liftment process. It has also been suggested by the said Committee that the Cooperative Societies could be made viable and vibrant by:
  • providing financial and managerial assistance by the government;
  • strengthening infrastructure and development of professional skills;
  • ensuring democratic management of professional skills;
  • ensuring open membership.
Against the quantitative positive growth, the cooperative sector is endangered with various types of constraints in areas of legislative and policy support, resource availability, infrastructure-development, institutional inadequacies, lack of awareness among members, erosion of the democratic content in management, excessive bureaucratic and governmental controls and unnecessary political interference in the operations of the Societies in our Country.
 
The early account of the Cooperative Movement in Sikkim dates back to the enactment of Sikkim Cooperative Societies Act 1955. Under this Act, the present Denzong Agriculture Cooperative Society Ltd., 22 Agriculture Credit Cooperative Societies and few ex-soldiers Consumer Cooperative Societies were organized. The total business size under cooperative Sector being too low, the movement was controlled and administered through a small cooperative cell which functioned under the then Planning and Development Department. With Sikkim joining the mainstream of India in 1975, a full-fledged Cooperation Department was established and a new and comprehensively framed Sikkim Cooperative Societies Act 1978 replaced the old Act. The Sikkim Consumers’ Cooperative Society Ltd. Gangtok was registered in 1975 under the Sikkim Cooperative Societies Act of 1955.

The enactment and extension of new cooperative societies Act, Sikkim Cooperative Societies Act 1978 followed by enforcement of Sikkim Cooperative Societies Rules of 1981 gave rise to growth of Cooperative Societies in Sikkim. 35 (thirty five) Multipurpose Cooperative Societies (MPCS) were formed and federated to SIMFED as its Apex Body in the year 1983. The Sikkim Cooperative Milk Producers’ Union Ltd (SMU) was formed in the year 1980 and registered under the Sikkim State Cooperative Societies Act, 1978.