Cooperation for the Rural Poor: An Analysis of Past Experiences for Future Growth of Indian Credit Cooperatives

Conventionally, Indian planners have considered cooperation to be an instrument of socio-economic development of the disadvantaged. The advent of the Cooperative Societies Act in 1904 tried to bring in a non-exploitative and voluntary spirit of grass-root level formal institutions for self-help, based on cooperative principles as instruments of development, combining the advantage of private ownership with public good. Cooperatives are expected to serve a set of social, economic and political objectives like community participation in decision making towards effective production, distribution and marketing at the grassroot level. By focusing on the evidences on agricultural credit cooperatives, this paper analyses the issues and problems of a century-old credit cooperative sector in India and highlights some of the possible strategies that can promote the concept of cooperation among the masses and can explore its inherent potential in delivering goods, services and ensuring financial inclusion in a globalised economic environment.