INDUSTRIAL CO-OPERATIVES TY B.M.

INTRODUCTION

Industries are the drivers of economy of a

country. They provide goods & services,
employment opportunities & provide for the
growth of the nation’s economy. Since ancient
times, especially from the days of Britisher’s, the
emphasis on industrial development has been very
significant. Mahatma Gandhi encouraged the
domestic industry by launching the swadeshi
movement. Industries like handloom, khadi, coir,
pottery, handicrafts etc. have been there for a long
time in our history.
India is a country with lakhs of village & an
economy based on rural earning. Therefore, the
development of these villages was considered very
important, especially during post independence
period. Hence, special attention was paid to the
growth &development of industries located in
village. This growth could be achieved only
through the development of the cottage &
handloom industries &other villages based
industries. Hence, the need for co-operative
organization was realized which would help bring
all people together to achieve their common
objective of self-development. Thus, industrial co-
operative were formed.
An industrial co-operative is an association of
workers & craftsmen involved in cottage or village
industries, who come together to undertake
collective production, processing & marketing of
goods manufactured by the members & provide
them with the necessary services & assistance.
 INDUSTRIAL CO-OPERATIVES TY B.M.S

Industrial co-operative can be defined as ‘A

co-operative organized by workers, controlled by
worker & managed by workers for meeting their
common purpose’.
Thus, an industrial co-operative is an
association of workers, wherein all activities are
undertaken by the workers and is formed purely to
benefit them, socially and economically.

 Role of Industrial Co-operatives

The role of co-operatives in the sphere of

industrial development has been recognised. An
average industrial worker, particularly in rural
areas, does not possess sufficient capital for
installing improved type of machinery. Apart from
this, he requires raw material and working capital
for running his unit. After production of goods,
their sale at such prices as can bring adequate
return to the worker, is equally essential. In short,
credit, raw material and marketing of finished gods
are three important requirements of an industrial
worker. The best solution of these difficulties
seems to be organisation of co-operatives of
industrial workers. It provides two distinct
advantages : requisite facilities by the Government
and the pooling of capital and skill.

The industrial co-operative movement has

made considerable progress in the district. The
industrial co-operatives governing hosiery goods
are the most organised and 90 per cent of the
 INDUSTRIAL CO-OPERATIVES TY B.M.S

production of hosiery co-operatives in the country

is from Ludhiana. The other co-operative of note
cover cycle-parts, sewing-machine parts, etc.

 Aims and Objectives

The main objectives of forming a co-
operative can be classified into two main types,
i.e., the social and economic objectives. While
forming an industrial co-operative, the members
will have certain social and economic objectives.
These objectives are:

1. Social Aim: Social Aim is to safeguard

workers interest and to protect them from
exploitation by the capitalist and the traders.
Thus the social aim is to render services to the
members as well as the society.

2. Economic Aim: The second aim is

Economical, which focuses mainly on creation
of employment. There is lot of disguised
unemployment and many layoff stages for the
worker in a year. This spare time can be made
productive due to the industrial co-operatives.
 INDUSTRIAL CO-OPERATIVES TY B.M.S

 Objectives of Industrial Co-operatives:

1. To develop self-reliance, co-operation and self-
respect among the members.

2. To purchase and supply raw materials, tools

and equipments needed by the workers.

3. To obtain contracts from the government and

other organization.

4. To purchase machinery and other equipments

required by members and to hire them to the
members for quality production.

5. To grant advances if needed by member

workers against the securities of raw materials
and finished products.

6. To construct take on rents godowns for

storage of finished products and raw
materials.

7. To undertake all such activities needed for the

welfare and well being of the member and the
society.

 Role of Industrial Co-operatives in India

The earliest attempt to introduce the co-

operative method for solving rural economic
problems was made in 1904 when the then
 INDUSTRIAL CO-OPERATIVES TY B.M.S

British Government passed the Co-operative

Credit Societies Act. The object of the Act was
to encourage thrift, self-help and co-operation
amongst agriculturists, artisans and persons of
limited means. However, in the industrial field
also the principle of co-operation has been
accepted as a method to help small
industrialists, artisans, craftsmen, etc. in
increasing their productive capacity and
financial resources.

Industrial co-operatives are generally formed

by artisans, craftsmen, industrial workers and
small industrialists. These are limited liability
concerns, the liability normally extending to the
value of the shares. During the first two Five-
Year Plans, 1951-56 and 1956-61, the industrial
co-operatives made a definite progress.
Weavers co-operatives have been established on
a firm footing under the guidance of the All-India
Handloom Board. The latter provides the co-
operatives with Government grants and loans
and helps in strengthening the marketing
organization. It further helps the movement in
building up its internal resources by increasing
the share capital.

Most of the funds for industrial co-operative

societies are available from co-operative banks.
Credit facilities are also given by private
entrepreneurs. The co-operative societies also
get subsidies, grants-in-aid and loans from
 INDUSTRIAL CO-OPERATIVES TY B.M.S

Government for the purchase of machinery,

equipment, raw materials, etc.

Considerable attention is being paid to the

introduction of improved tools and techniques
amongst industrial co-operative societies by
different all-India and State organizations. Co-
operative Industrial Estates are also being
development where sites are made available to
members with common facilities like workshops,
exhibition houses, industrial museums, quality
marking units, testing and finishing units, go-
downs, sample rooms and similar services.
Thus, the industrial co-operative play a vital role
in the development of village industries.

TYPES OF INDUSTRIAL
CO-OPERATIVE SOCIETIES
1. Industrial Production Society: Under the
production co-operatives the societies undertake
production of goods in their workshops by
 INDUSTRIAL CO-OPERATIVES TY B.M.S

employing member workers. eg. The Bhavani

Metal Industrial Co-operative Society located at
Gulkekadi in Pune City. The workers in the
society are paid wages on daily basis while the
entire responsibility of production and marketing
is undertaken by the society.

2. Industrial service co-operative society: In

this type the production activities such as
providing raw materials, handling of tools and
equipments, technical guidance are done by the
members. In certain societies even the
marketing of products are done by the
members.

3. Common facility workshop society: Certain

industrial co-operatives have established
common facility workshop for the use of their
members. The members produce the goods and
make use of the workshop for finishing work and
other technical work. They have to pay a rent for
the use of the facility. E.g. the Hupari Silver
Workers Co-operative Society in Kolhapur
district.
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 Other Co-operatives
1. Workers co-operatives
These are businesses that are owned exclusively
by the employees. Some are set up as new
ventures, some are conversions from existing
businesses, and others are viable replacements
for failed companies.
2. Community co-operatives
Social responsibility and concern for the
community are fundamental co-operative
values. Many organisations that provide care for
elderly, ill or disabled people, child care or other
beneficial local services choose a co-operative
structure that allows employees, clients and
community representatives to become
members.
3. Secondary co-operatives
Often groups of self-employed people or
businesses can benefit from sharing facilities,
equipment or marketing costs. A co-operative
provides the ideal legal framework for this.
Example of secondary co-operatives includes
taxi drivers.
4. Credit unions
These are financial co-operatives that are
directly owned and controlled by their members,
who are the savers and borrowers. Most credit
unions have a community common bond, which
 INDUSTRIAL CO-OPERATIVES TY B.M.S

means that they serve a specific geographic

area. Some credit unions are based at the
member’s place of work and therefore have a
workplace common bond.

 Organization Structure
5. Co-operative
1.
2.
3.
4. National
State
Central
Level
and
Federation
Federations
Primary
Industrial
of
Industrial
Industrial
Specific
EstatesCo-
Type
Co-
operatives
of
operative
Industrial
Societies
Co-operatives

 National Federation of Industrial Co-

operatives
NFIC was established in the year 1966 with the
objective of studying industrial co-operatives in
 INDUSTRIAL CO-OPERATIVES TY B.M.S

relation to the problems they face and to

suggest solutions. The NFIC also plays a major
role in formulating and implementing programs
relating to the development of industrial co-
operatives. It also undertakes import, purchase
and distribution of raw materials, equipments
and components to the industrial co-operatives.
It also helps in rendering marketing services to
the members. The head quarters of NFIC is
situated in New Delhi.

 National Federation of Specific type of

Industrial Co-operatives
These federations are national level institutions
catering to the needs of specific industrial co-
operatives. They mainly look after the marketing
problems of the co-operatives.
 State Level Federations
State level institutions for industries like khadi,
handloom, handicrafts, etc. have been set up for
supporting the rural artisans and weavers by
providing product design, distribution and
promotional support.
 Central and Primary Industrial Co-
operative Societies
The central level co-operatives are present in
certain states and function at the district level.
The primary industrial co-operatives also
function at the district level. These institutions
 INDUSTRIAL CO-OPERATIVES TY B.M.S

function at the grass roots level in close co-

ordination with the industrial co-operatives.
 Co-operative Industrial Estates
Co-operative industrial estates are basically
industrial areas, developed in order to allow
members to set up workshops, small factories
etc. to undertake industrial activities.

BENEFITS OF INDUSTRIAL
CO-OPERATIVES
1. The society provides better employment
opportunities to the members.

2. Training and knowledge is given to the

members to develop their skills and be more
productive.

3. The workers can procure the necessary raw

materials and equipment through the co-
operatives.

4. Marketing and sale of the goods may be

handled by he co-operative, thus ensuring the
right returns to the members.
 INDUSTRIAL CO-OPERATIVES TY B.M.S

5. The most important reason for set-up is that

industrial co-operatives are very beneficial to
the society as a whole because of the benefits
it transfers to the members in the form of
higher income, better employment
opportunities and social security.

PROBLEMS OF INDUSTRIAL
CO-OPERATIVES
1. Problem of Human Resource: Most
industrial co-operatives are situated in rural
areas and also are scattered all over the
country. They are financially weak and thus it
is not possible for them to appoint trained
personnel to look after the management, thus
they have to manage with unskilled and
inefficient staff, which leads to deterioration in
quality.

2. Problem of production: Co-operatives face

a major production problem due to raw
materials as its supply is very unstable and
inadequate. Co-operatives get the least
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preference when it comes to raw materials,

thus hindering constant production. These
fluctuations lead to increase in the price.

3. Problem of Marketing: Industrial co-

operatives are extremely weak in marketing
and sales promotion. They lack the finance
and the capability to undertake aggressive
marketing activities, due to which they are
unable to increase sales.

4. Lack of member education: Members lack

the knowledge and education about working
in co-operatives. Thus, they are unable to
understand the principles and methodology of
the co-operatives.

5. Lack of support from higher institution:

Industrial co-operatives lack adequate support
from the higher institutions and are unable to
render much help and guidance to the primary
and grass roots level co-operatives.

6. Lack of loyalty of members: Many co-

operatives have failed mainly due to the
selfish objectives of the members, who use
the co-operative for meeting their own needs
rather than the objectives of the co-
operatives.

7. There are also some more problems such as-

Inadequate supervision and inspection
 INDUSTRIAL CO-OPERATIVES TY B.M.S

8. Lack of proper planning

9. Lack of audit controls

10.Problem of Finance

11.Vested interest

 Kinds of Industrial Co-operative

1. Handloom
2. Handicraft society
3. Leather co-operative
4. Oil-crushing
5. Coir co-operatives
6. Other industrial co-operative
 Handloom co- operatives:
The Handloom sector plays a very important role
in the country’s economy. It is the largest
economic activity after agriculture providing
direct and indirect employment to more than 30
lacs weavers. The average annual production of
various handloom products through this
handloom weavers is around Rs.500crore.
Handloom sector is largely dependent on the
organized mill sector for supply of its principal
raw material, namely, yarn. This sector uses the
bulk of its yarn in the form of hanks. The Central
Government has been making efforts to ensure
regular supply of yarn to the handloom sector at
reasonable prices through-(a) Hank Yarn
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Obligation Scheme; (b) Loan assistance to the

National Cooperative Development Corporation
(NCDC) for setting up of
new/expansion/modernization of weavers’
cooperative spinning mills; and (c) scheme for
supply of yarn to handloom weavers at mill-gate
prices. Out of which 35% production is being
procured by Co-optex, a State Level Handloom
Cooperative Marketing Organization through its
various showrooms in the country and the rest
production of about 65% is being sold by
weavers’ societies through other means.
Handloom Weavers' Cooperative Society Ltd.
popularly known as CO-OPTEX.

Due to effective State Government

intervention through financial assistance and
implementation of various developmental and
welfare schemes, this sector has been able to
withstand the competition from the powerloom
and mill sectors. As a result of these measures
the production of handloom fabrics registered
more than ten-fold increase from a level of 500
million sq. meters in the early fifties to 7862
million sq. meters in 1997-98.

The anticipated production for 1998-99 is

7170 million square metres. This sector
contributes nearly 22 per cent of the total cloth
produced in the country and also contributes
substantially to the export income of the
country. Handlooms form a part of the heritage
of India and exemplify the richness and diversity
 INDUSTRIAL CO-OPERATIVES TY B.M.S

of our country and the artistry of the weavers.

The office of the Development Commissioner for
Handlooms has been implementing, since its
inception in the year 1976, various schemes for
the promotion and development of the
handloom sector and has been providing
assistance to the handloom weavers in a variety
of ways. Co-operative coverage is limited to only
30 per cent of the total weavers. inadequate
enforcement of and the challenging of the
Handloom Act of 1985 in several High Courts
and the stays granted to the powerloom
operators by these Courts has rendered the Law
ineffective and encroachment on handloom
products still continues. The inherent week-
nesses of the handloom industry like weak
organisation, officialisation of handloom
cooperatives, inadequate marketing
infrastructure etc. have made it more vulnerable
to competition from the organised mills and the
decentralised powerloom sector. Steep increase
in cotton yarn prices, build up of unsold stock
and delayed payments to primary societies by
apex societies, etc. further deteriorated
weavers' condition.

 Handicrafts:

No special type of handicrafts exists in the

Gurdaspur District. Phulkari and baag making
was an important handicraft in the past, but
gradually, with the advancement of mechanism,
this work has almost been neglected by the
 INDUSTRIAL CO-OPERATIVES TY B.M.S

village women. Hand knitting and embroidery

work is, however, still carried on. This is also
called topa work. During the Second Five-Year
Plan (1956-61), industrial training institutes were
established at various places in the district to
impart training to women in embroidery,
tailoring, knitting, etc. The dealers from
Amritsar and Ludhiana supply cloth through
their middlemen and get the work done from the
village women. Remuneration being not
attractive, the industry is on the decay.

 Oil-crushing:
Oilseeds occupy a prominent position in the
agricultural economy. India is one of the leading
oilseed producing countries, being perhaps the
only country in the world, having the largest
number of commercial varieties of oilseeds.
Oilseeds and edible oils are two of the most
sensitive agricultural commodities in the
country. India contributes about 9% of the world
oilseeds production, about 7% of the global
production of protein meal and is the 4th largest
edible oil economy in the world. The total area
under oilseed cultivation in the country stood at
22.78 million ha. in 2001-02. The corresponding
production was 22.80 million tonnes. Madhya
Pradesh is the leading oilseed producing state in
the country and accounts for 21.36% of the total
oilseed production in the country. The other
 INDUSTRIAL CO-OPERATIVES TY B.M.S

leading oilseed producing states are Gujarat

(17.79%), Rajasthan (15.03%), Maharashtra
(10.70%), and Andhra Pradesh (7.76%). The rest
of the states account for the remaining 27.36%
of the total production. Oilseeds, edible and non
edible oil play an important role in the
agricultural economy of the country. Groundnut,
rapeseed/ mustard, soybean, sunflower, sesame,
nigerseed, safflower, castor and linseed are the
nine major oilseeds sources for obtaining edible
and non edible grade oils. The secondary
sources are coconut, cottonseed, rice bran,
solvent extracted oils from tree and forest
origin.
Apart from oilseeds, the byproducts obtained
during the processing operation viz. deoiled
cakes, oilmeals and other minor oil products are
also of high economic value. India is one of the
leading oilmeal exporter in the world. Its share
in the world oilmeal export market is about 7%.
The export of oilmeals, oilseeds and minor oils
for the financial year 2000-2001 stood at 29.07
lakh tons. In terms of value, realisation it stood
at Rs. 3393 crore.

 Flaying/Leather Tanning:

This traditional industry, though important and

beneficial for the country, was neglected by the
people and very useful national resources had
been allowed to be wasted by using old
methods. The industry is carried on by the
 INDUSTRIAL CO-OPERATIVES TY B.M.S

Chamar (Scheduled Caste) community. In 1971-

72, 154 units were engaged in it in the district.
These employed 399 persons and produced
goods worth Rs 99,050.

 Shoe-Making:

It is an old traditional industry. The partition of

the country in 1947 adversely affected it as the
Muslim artisans migrated to Pakistan. Their
place was, however, taken up by refugee
artisans from Pakistan. The shoe-makers in
rural areas generally produce shoes for local
needs. To encourage the industry, the co-
operative Department has set up shoe-making
co-operative societies at some places. Besides,
training centres are functioning at various
places for imparting training to artisans. A
Rural Industrial Centre for Leather Goods is
functioning at Dhariwal.

In 1971-72, 1,535 units were manufacturing

leather goods including shoes in the district.
These employed 1,778 persons and produced
goods worth Rs 7,36,100.

 Carpentry and Black smithy:

 INDUSTRIAL CO-OPERATIVES TY B.M.S

These are also traditional industries carried on

in the rural areas. Blacksmith acts as useful
link in the rural economy like the carpenter. He
undertakes repairs of agricultural implements
besides doing household jobs. The goods
produced by such artisans are khurpas, sickles,
wooden ploughs, etc. The payment of wages in
some cases is made in kind during the crop
seasons.

 Ban and Rope Making

Ban and rope making is also one of the

traditional industries carried on by the villagers
on primitive basis. The products are
manufactured from sunn-hemp, munj and kai,
which are mostly available near the bet areas of
the rivers Beas and Ravi. The village folk have
mostly been doing the job on part-time basis by
hand process. It was during the First Five-Year
Plan (1951-56) when ban and rope
manufacturing machines (both operated by
hand an power) were introduced and the
Industries Department as well as the Punjab
Khadi and Village Board extended financial help
with a view to unlifting the artisans engaged in
the line. The State Co-operative Department
has also helped the industry by organising co-
operative societies at some places in the district.

In 1971-72, 510 units were engaged in the

industry which employed 625 persons and
produced goods worth Rs 3,50,000.
 INDUSTRIAL CO-OPERATIVES TY B.M.S

 Rice Husking, Flour Milling and Oil

Extracting:

These industries received a serious set-back at

the time of partition of the country in 1947 when
Muslim artisans, known as telis, etc. migrated to
Pakistan. The water logging, which adversely
affected the production of oil seeds, caused
further set-back to the oil industry. However,
the All India Khadi and Village Industries Board is
taking keen interest in the revival of the industry
by setting up oil industrial co-operative societies
at various places in the district, by imparting
training and by providing financial facilities.
Besides, modern type machinery (Wardha type
kohlus ) is distributed in villages and facilities
are provided for construction of sheds and
godowns. In 1971-72, 45 units were engaged in
the village oil industry in the district. These
employed 90 persons and their production was
worth Rs 1,15,000.

Originally, flour milling was done on hand-

driven domestic chakkies, bullock-driven
kharases and water operated gharats, but, with
the advent of diesel engine and electric power,
composite units for flour milling, rice husking,
 INDUSTRIAL CO-OPERATIVES TY B.M.S

cotton ginning, cotton carding, etc. came into

existence.

Due to water logging in the district, paddy is

grown in abundance, with the result tha t about
17 rice shellers, each with a capacity of 1 to 4
metric tones per day of eight hours, are
functioning at Pathankot, Dinanagar, Gurdaspur,
Batala, Dhariwal and Dera Baba Nanak.

For the facility of rice shellers, run with the aid

of electric power, at various places of the
district, some units in the engineering industry
have taken up the manufacture of rubber rolled
rice huskers and paddy driers which have
attracted orders from the rice shellers of other
places too.

 Baskets, Chicks and Straw Bottle Covers

Making:

These are also traditional industries, carried

on in most of the villages in the district.
Bamboo and mulberry sticks are the main raw
materials used in the manufacture of chicks and
baskets, respectively. These are available in
plenty in Tahsil Pathankot.

The demand for articles like cycle baskets,

waste paper baskets, vegetable baskets and
even articles of furniture made from bamboo is
 INDUSTRIAL CO-OPERATIVES TY B.M.S

on the increase. There is, therefore,

considerable scope for further development of
the industry, provided adequate financial
assistance is afforded to the manufacturers
engaged in it.

Straw covers for bottles are manufactured at

Dinanagar and its surrounding villages and in
the villages near Pathankot. These are supplied
mostly to the breweries for packing purposes.

 Sericulture:

Sericulture is a useful part-time occupation for

the tillers of land. This industry is mainly
concentrated in Pathankot Tahsil and the
surrounding areas where mulberry trees are
available in abundance and rearing of silk seed
on these trees is facilitated. The Industries
Department has set up a sericulture
organisation and a sericulture experiment
laboratory at Sujanpur. At Dinanagar, the
department has set up a big sericulture farm
where mulberry trees have been grown.
Training is imparted in rearing of silk worms
and cocoons. The Government provides
cocoons to the silk rearers at subsidised is also
provided by the Government.

 Gur and Khandsari Making

The industry exists almost in every village

where sugarcane is grown. This is a seasonal
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industry and is mostly adopted by the

cultivators. With the establishment of the
Batala Co-operative Sugar Mills Ltd., Batala in
1956, restrictions were khandsari

In 1971-72, 17 units were engaged in the

production of gur and khandsari. These gave
employment to 70 persons and produced goods
worth Rs 1,50,000.

 Pottery:

Pottery is an important village industry. It

received a serious set-back on the partition of
the country in 1947 when the Muslim artisans
migrated to Pakistan and there was low influx
of refugee potters in this district. However, in
course of time, the industry got re-established.

 Ivory and Inlay Goods:

Only one unit is engaged in the production of

ivory and inlay goods in the district at Qila
Darshan Singh, Tahsil Batala. In 1971-72, it
gave employment to 10 persons and produced
goods worth Rs 12,380. Besides, one unit in the
small-scale sector manufactures plastic
novelties and consumer goods.
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 Jail Industries

The industries carried on in the District Jail,

Gurdaspur, are : carpentry, munj and hemp,
ban, cane, chick making, niwar making, basket,
tat (sack-cloth), gur, cotton-testing, book-
binding, poultry, etc. The production and gross
profit of these industries is given in the section
on ‘Jails and Lock-ups’ of chapter XII, ‘Law and
Order and Justice.’
 Coir co-operatives:
Traditional uses for the resilient and durable
coir fiber include rope and twine, brooms and
brushes, doormats, rugs, mattresses and other
upholstery, often in the form of rubberized coir
pads. In the 1980s and 90s, global exports of
coir fiber fell by almost half, as Western
consumers shifted to synthetic foam and fibers.
Then, since 1990, rapidly growing domestic
demand in India more than doubled global
production benefiting exclusively the Indian coir
industry. Finally, since 2001, a rising Chinese
demand for coir, an expanding market for coir-
based erosion control products, and the spread
of coir pith as a peat moss substitute in
horticulture has further pushed up global
production and prices. In turn, other coconut
growing countries, including Philippines,
Thailand and Vietnam are now expanding their
production and export of coir fiber. These
changes are also reflected in the international
trade in coir.
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With a view to assist the State Governments

in their efforts to encourage the cooperatives in
the coir industry by providing the share capital
assistance, Managerial and marketing assistance
apart from assistance for modernization, the
Central Government had evolved a scheme for
assisting the coir industry which aims at the
formation of viable coir co-operatives and
revitalization of the potentially viable, dormant
societies and bringing the coir workers into the
cooperative fold, so that the quality and quantity
of production improves, the workers get better
wages and full employment and the growth of
the coir industry is put on a sound footing. The
Centrally Sponsored scheme for the co-
operativisation of the coir industry come into
force with effect from 21st August, 1982
The scheme provides for:-
1. Share Capital assistance : To enable the
Coir Cooperatives to draw adequate working
capital from institutional sources to meet
funding requirements for full scale production,
share capital assistance/capital per member of
primary cooperatives (engaged in retting coir
extraction and spinning coir yarn) and product
societies.

2. Managerial Subsidy: Annual Managerial

subsidy for placement of competent persons
in supervisory/Management positions in the
Primary Coir Cooperatives engaged in the
production of coir fibre and coir yarn and
 INDUSTRIAL CO-OPERATIVES TY B.M.S

weavers cooperative societies engaged in

production of coir products, for five years and
the Cooperatives should function on their own
without any support from Government after
the first five years.

3. Assistance for acquisition/modernization of

equipments, improved machinery, looms by
the primary coir cooperatives in the yarn
sector and weavers cooperative societies
engaged in the production of coir products, by
way of loans and subsidy; and

4. Assistance to Integrated Coir Development

Project of the Government of Kerala and
similar schemes when received from other
State Governments. The modalities with
regard to Integrated Coir Development Project
will be issued separately.

INSTITUTIONAL SUPPORT FOR

CO-OPERATIVES
1. National Co-operative Development

Corporation (NCDC)

NCDC was set up in 1963, with the purpose of

the development of the co-operative movement
and to increase the scope of it at the national
level.
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In 1962, the National Development Corporation

Act was passed and it began its functioning in
March 1963.

 Role and Functions of NCDC:

1. To provide Loans and Grants to various co-

operative societies.
2. To provide latest technical facilities to
agricultural co-operative society through the
respective state governments.
3. To participate in the share capital of the
different co-operatives societies working at
the National level.
4. To utilize the National Co-operative
Development Fund for various development
activities of co-operative societies.
5. To prepare annual programs and to facilitate
the implementation nation wide.
6. To develop co-operative fields like
processing, warehousing, import-export of
agricultural commodities etc.
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7. To assist state government in Human

Resource Development.
8. To assist the marketing federation for
establishment of promotional cells in order to
provide financial and technical support in
installation of processing units and
marketing activities.

2. Khadi And Village Industries Commission

(KVIC)
KVIC was setup in 1957.
 Objective of setting up this commission
was: -

a. To reduce the unemployment problem in

India.

b. To boost the Rural Economic Development

through promotion of small village industries.

c. To create awareness about the hidden

struggle through promotion of Gandhian
Values.

 Activities of KVIC:
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a. To prepare programs on promotion of Khadi

and Village Industries and implement those on
a National scale.

b. To help in training and development of village

artisans and managers involved in this
industry.

c. To make arrangement for raw-material

storage and to facilitate in the distribution of
finished goods.

d. To study the problems of village economies

and to suggest recommendations.

e. The commission provides assistance to

industries like Tanning, Pottery, Paddy,
Processing, Khadi Sari, Sugar and Jaggery.

3. National Dairy Development Board (NDDB)

The successful program undertaken by Anand
Milk Producer Union Ltd. encouraged the
government of India to setup a National Level
Board. Thus NDDB was setup in 1965.
The main objective of the board is to replicate
the Anand type all over the country. The World
Food Program in 1970 helped the board with
financial assistance of Rs120crores. This fund
was for the development of Milk Supply Co-
operatives. Finally this program was named
‘Operation Flood’.
 Objectives
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a. To introduce the development program for

development of dairy operation and also
prepare program for agro-based industries by
providing financial and technical aids.

b. To assist setting up of Milk Societies under the

Co-operative Sector.

c. To conduct research on development of

agriculture and horticulture.

d. To provide necessary technical support for

societies collecting, storing, selling milk and
also producing various milk products.

e. NDDB helps in construction of buildings,

provision of machinery etc. in respect to dairy
development.

f. To provide consultancy services for

management of co-operative milk producers
societies.

g. To advice the Government of India on Rural

Development Programs.

h. To help in export of dairy products and also to

import technical goods.

4. National Bank for Agricultural And Rural

Development (NABARD)
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NABARD is an apex institution accredited with all

matters concerning policy, planning and
operations in the field of credit for agriculture
and other economic activities in rural areas in
India.

The committee to review arrangements for

institutional credit for agriculture and rural
development was setup by RBI under the
chairmanship of Shri. Sivaraman to study the
scope of rural finance. It recommend the
establishment of a national bank which will deal
exclusively for agriculture and rural
development. Thus the Indian Parliament
through the act 61 of 1981 approved the setting
up of NABARD.

The bank came into existence on 12th July 1982

and it was dedicated to the nation by the then
Prime Minister Mrs. Indira Gandhi on 5th
November 1982.

NABARD took over the function of the erstwhile

Agriculture Credit Department and Rural
Planning and Credit Cell (RPCC) of RBI and the
Agricultural Refinance and Development
Corporation (ARDC).

Its subscribed and paid up capital was Rs. 100

crores which was enhanced to Rs. 500 crores
which was contributed by the Government of
India and RBI in equal proportion. Today the
subscribed and paid up capital is Rs. 2000 crore.
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a. NABARD is an apex institution, which performs

the refinance function for the institution
providing investment and production credit for
promoting the various departmental activities
in rural areas.

b. It takes measures towards institution building

for improving capacity of the credit delivery
system, monetary, formulation of
rehabilitation schemes, restructuring of credit
institutions, training of personnel etc. It co-
ordinates the rural financing activities of all
the institutions engaged in developmental
work at the field level and maintains liaison
with the Government of India, RBI and other
national level institutions concerning with
policy formulation.

c. It prepares on annual basis, rural credit plans

for all districts in the country.

d. It promotes research in the fields of rural

banking, agriculture and rural development.

 Mission

Promoting sustainable and equitable agriculture

and rural development through effective credit
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support, related services, institution building and

other innovative initiatives.

 Functions:
a. To develop policy and plans with respect to
matters relating to agriculture and allied
activities.

b. To undertake developmental activities in the

rural areas.

c. To undertake programs for training,

consultancy, research in respect to credit of
agriculture and rural development.

d. To provide refinance facilities to the RRB

(Regional Rural Bank) and various co-
operatives.

e. Inspection of Banks.
f. Coordination.

5. National Co-operative Consumer

Federation (NCCF)

The National Co-operative Consumer Federation

is the highest body of consumer co-operative in
India. It was formed in the year 1966.Its
 INDUSTRIAL CO-OPERATIVES TY B.M.S

headquarters are located in Delhi with branches

in various cities such as Mumbai, Chennai,
Kolkatta, Nagpur etc.

 Chief Functions:

a. To help and guide state federations in their

operations.
b. To act as the chief spokesman of consumer
co-operative in India.
c. To procure and distribute consumer products
such as:
(i)Pulses, spices, food grains, tea and other
agricultural goods.
(ii)Controlled cloth.
(iii)Non-controlled textiles and readymade
garments.
(iv)Imported and confiscated goods.

The federation maintains a consultancy and

promotional cell, which is entrusted with the
responsibility of farming operational and
business procedures, administrative norms etc.
It also publishes a monthly news bulletin, which
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contains information on the market rates of

goods supplied by the consumer co-operatives.
6. National Co-operative Housing Federation
(NCHF)
The National Co-operative Housing Federation
(NCHF) was formed in the year 1969 as per the
recommendations of a study group on co-
operative housing. The state level and district
level housing societies as well as the state level
institution financing the housing societies can
become a member of the National Co-operative
Housing Federation (NCHF).

 Objectives:
a. Publicity and propaganda of co-operative
housing movement by publishing books,
brochures etc.

b. To undertake research and development work

for reduction in the construction cost.

c. To establish financial institution at state level

to help the primary co-operative housing in
getting loans at lower rate of interest.

d. To involve institution like LIC and other central

level financing institution in the co-operative
housing movement.
6. National Federation Of Industrial Co-
operatives (NFIC)
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NFIC was established in the year 1966 with the

objective of studying industrial co-operatives in
relation to the problems they face and to
suggest solutions. The NFIC also plays a major
role in formulating and implementing programs
relating to the development of industrial co-
operatives. It also undertakes import, purchase
and distribution of raw materials, equipments
and components to the industrial co-operatives.
It also helps in rendering marketing services to
the members. The head quarters of NFIC is
situated in New Delhi.
7. International Co-operative Alliance (ICA):

International Co-operative Alliance is an

independent non-governmental association
which unites, represents and serves co-
operatives worldwide. The ICA was founded in
London in 1895. Its members are National and
International Co-operative Organization in all
sectors of activity including agriculture, banking,
energy, industry, fisheries, housing, tourism and
consumer co-operatives: ICA has more than 230
member organization from over 100 countries
representing more than 730 million individuals
worldwide.
In 1946, the ICA was one of the 1st Non-
governmental organisations to be accorded UN’s
Consultative Status. Today it is one of the 41
holding-holding category of consultative status
with the UN’s economic and social council.
 Aims of ICA:
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The major objective of ICA is to promote and

strengthen autonomous co-operatives
throughout the world. ICA seeks to: -
a. Promote and Protect Co-operative Values and
Principles.

b. Facilitate the development of economic and

other mutually beneficial relations between its
member organisations.

c. The economic and social progress of its

members and their communities.

 Specialized Organization under ICA

a. International Co-operative Agricultural

Organization (ICAO)
b. International Co-operative Banking Association
(ICBA)
c. Consumer Co-operative International (CCI)
d. International Co-operative Energy
Organization (ICEO)

Conclusion
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India’s major population that is almost 70

percent still resides in the villages, thus it becomes
imperative that the rural industry should develop
for the overall development of our country. It is
amazing to see that where government help
cannot reach, the co-operatives had been formed
by the masses due to common needs and
difficulties. Industrial co-operatives essentially
deals with handlooms, handicraft and other village
industries.
Industrial co-operatives not only provide
employment but they offer an opportunity for the
rural masses to start something on their own. With
little seed capital, assistance and guidance from
the Co-ops, people can become self sufficient. But
these rural industries not only provide assistance
but their products such as handloom cloth,
handicraft, beautiful intricate potteries, hand made
jewelry, paintings etc are in great demand
overseas. Thus the small scale industries are have
a huge potential of earning foreign currency.
It is a common phenomenon that loans are
given to people who already have money but there
is little or no source of gaining capital for a poor
entrepreneur or a person from village having no
assets. The irony hits home hard when we realize
that the situation is affecting 70 of our productive
population, ie untapped source of income. As a
result the government has taken certain steps to
form institutions that give financial support to rural
industries. NABARD, KVIC have been playing a vital
role for hydrating the rural industries but still co-
operatives need help and assistance.
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Unless and until the importance of rural

industry is realized progress of the entire country
shall remain as a dream unfulfilled.