co-operatives 4th sem

7/30/2019 Co-Operatives 4th Sem

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Co-operatives Management


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Definition

An association of persons usually of limited means, who have voluntarily joined together, to

achieve a common end, through the formation of a democratically controlled business

organization, making equitable contribution to the capital required and accepting a fair share

of the risks and the benefits of the undertaking

Rules of democracy are applicable to cooperatives

Intend to serve both its members and the community as a whole

First emerged in the 19th

century to eliminate ills of both - public & private sectorbusiness enterprises


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Characteristics of Co-operatives

1. Association of persons and not capital (unlike Ltd company)

2. Not a charitable association. It is an enterprise. Members share risks, gains, costs etc3. Voluntary in nature

4. Democratic Management. Every member gets only 1 vote irrespective of his monetary

contribution

5. Equality. No discrimination of any kind

6. Gains distributed on basis of business done & not contribution to capital

7. All Co-ops are a part of socio-economic movement that can bring about a radical change

8. Effective instrument to secure rapid economic growth


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Principles of Co-operatives

1. Voluntary & Open membership

2. Democratic control

3. Limited interest on capital

4. Distribution of surplus in proportion to their transaction

5. Political & Religious neutrality

6. Promotion of education


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Role of Leadership in Co-operative Management

A cooperative is a democratic unit. Leadership is what makes democracy dynamic.

Leaders in a cooperative shows the way ahead to his fellow co-operator. (Convincing-guiding-cultivating

confidence & loyalty)

Through subordination of individual interests, leaders take the owners & employees to higher levels of

achievements

Qualities of a leader:

1. Necessary courage & conviction but guided by judgment

2. Building up relations with fellow members

3. Clear understanding of real nature of co-op (principles & philosophy)

4. Must understand the difference between administration & management

5. Wide vision needed, else leadership gets stagnant

6. Must have a clear idea of the social & economic environment in which they are operating. It is

dynamic


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Dairy Co-operatives

One of the most successful co-operative movements in India

Village dairy co-op soc

District/Taluka Co-op union

Dairy Federation

Collection centers, arrange for pasteurization before

distribution

Collection centres, extension services

R&D, marketing, distribution, pricing, promotion, reach for new markets.


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Co-operative Societies Act, 1912 Areas covered:

Registration of all types of co-op

Provision for creation of Reserve fund

Dividend on share

Investment of surplus fund

Dispute settlement

Statutory enquiry, inspection, audit

Provision for appointment of a registrar

Division as limited & unlimited liability

Liquidation of the cooperative society

Legislation influencing Co-operatives


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Rights To Information Act, 2005

- replaces Freedom of Information Act, 2002

Freedom to every citizen to secure access to information under the control of public

authorities, consistent with public interest, in order to promote openness, transparency &

accountability in admin & related matters



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Salient Features of RTI, 2005

Entitles every citizen to the RTI

Information means material of almost all types and in any form

Include inspection of documents & records, taking extracts, obtaining certified copy in

physical or in electronic form

Applies to all public authorities owned, controlled, financed by central or state government

Every public authority is obliged to publish & disseminate information in writing or in

electronic mode



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Salient Features of RTI, 2005

Certain information are exempt from disclosure

Information to be provided within specified time

Certain restrictions have been placed with respect to information disclosure relating to third

party

Supervising Authority Central informationCommission, State information Commission is

established in each state to overlook smooth implementation of RTI

Provides for penalties for non-compliances of certain provisions or obligations



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Problems faced by rural credit co-operatives

Low resource base (Low money reserve to forward loans)

High dependence on external sources of funding

Excessive governmental control

Huge and accumulated losses over a period of time due to non recovery of loans granted

Poor business diversification (areas in which firms are given loans; hence risk is not spead

over different sectors)

Low recovery

Hence, does not inspire confidence among their existing and potential members, depositors,

borrowers and lenders.

Credit Co-operatives in India

co-operatives 4th sem

Documents