Impact on vydhyanadhan committee recommendations of wangapally primary agricultural co-operative credit society

Cooperatives as an institution in India are more than a century old. With more than a lakh grass root level cooperatives, their presence is formidable. Notwithstanding, impressive gains made by cooperatives in terms of their rural outreach and coverage of small and marginal farmers, their financial health has been a matter of concern. The study is an attempt made into the factors which impact financial health of cooperatives reflected through their recovery performance. The major findings of this study government should allow the cooperatives to evolve in a natural manner rather than through initial official encouragement and subsequent intervention. Government's contribution to share capital of cooperatives should be stopped. There is also a need to revisit the issue of appropriate member size for a base level cooperative so that cooperative principles are internalized amongst members. Very large cooperatives should be avoided both in principle and practice. The attempt should be either to completely dislodge government equity in the PACS or not to consider the PACS as cooperatives but to accept them as quasi government ventures for which the parameters of performance needs to be revisited. The study also found that as deposits grow in proportion to borrowings, the recovery performance is adversely affected.