Draft Final Report of the Task Force on Revival of Cooperative Credit Institutions

1.15 The Task Force has a special word of commendation for the Secretariat set up for it by NABARD. While each member of the Secretariat has contributed in shaping the conclusions and recommendations of the report, we would especially like to mention the inputs received from Dr Prakash Bakshi, Chief General Manager, Tamil Nadu RO of NABARD, who not only coordinated the operations at the Chennai end, but provided significant support to the thinking process. The Task Force would like to mention the meticulous attention to detail, which Dr. A. S. Patil brought to bear on the logistical and operational aspects as well as in collating and analysing inputs received from various quarters. This facilitated the work of the Task Force.

1.16 S/Shri S. Muralidaran, T. Ravichandran and D. V. Ramana Rao, are commended for their professional expertise and their general good cheer despite the pressure brought to bear on them. Our thanks are due to S/Shri R. V. Ramakrishna, S. Kannan, Anandan, Smt. Mina Anthony, Smt. Vidya and Shri Sriram Iyer, for relieving the Secretariat of all the tiresome details. Apart from the personnel of NABARD, we are also grateful to the Reserve Bank of India for making the services of Dr. Praggya Das, Assistant Adviser of the Bank, available to the Task Force.The Task Force would like to take this opportunity to record its appreciation of her contribution to our work, by collating, organising and analysing the statistical data. The Task Force is also grateful to Smt. Bharti Gupta Ramola and Shri Varun Gupta for their help and advice at various stages of our work.

1.17 This is the final draft of the report and is being put on the Internet to invite comments and reactions from interested members of the public. The Task Force will finalise the report for submission to the Union Government, after taking these comments into account and making such changes as deemed appropriate, consistent with the basic thrust of its arguments and recommendations.

A.Vaidyanathan, Chairman

Y.S.P.Thorat, Member Secretary

Chapter 2: Evolution of the Cooperative Movement


2.01 The Indian cooperative movement was initiated by the government. It spread and diversified with the encouragement and support of the government. Its present condition is also to a great extent because of the intrusive involvement of, and interference by the government. This chapter provides a brief review of the various phases of the evolution of cooperatives in general, and of credit cooperatives in particular, over the past century.

The First Phase: 1900-1930

2.02 By the beginning of the 20th Century, officials of the colonial government perceived the Indian farmers' dependence on usurious moneylenders to be a major cause of their indebtedness and poverty. At that time the cooperative movement had become well established in Europe and achieved remarkable success there. Convinced that the cooperative movement offered the best means of liberating Indian farmers from the crushing burden of debt and the tyranny of moneylenders, Indian officials began to take active interest in promoting credit cooperatives in the country. Societies were organised for the first time in the closing years of the 19th Century.

2.03 The passage of the Cooperative Credit Societies Act in 1904, and the enactment of a more comprehensive Cooperative Societies Act in 1912 marked the beginning of a government policy of active encouragement and promotion of cooperatives. This thinking gained wide acceptance and was adopted as a policy by provincial governments and thereafter, "cooperation" became a provincial subject in 1919. The persistence of government interest in cooperatives and the importance attached to them was reflected in the appointment of three different Committees to review their growth and functioning.