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UNIVERSITY OF MUMBAI
A PROJECT REPORT ON
“CO-OPERATIVE MOVEMENT IN MAHARASHTRA”
IN PARTIAL FULFILLMENT OF
BACHELOR OF MANAGEMENT STUDIES
(BMS – V SEMESTER)
2005 – 2006
PROF. SEEMA UNIKRISHNAN
MAHATMA EDUCATION SOCIETY’S
PILLAI’S COLLEGE OF ART, SCIENCE & COMMERCE
NEW – PANVEL - 410206
This is to certify that the project entitled “CO-OPERATIVE
MOVEMENT IN MAHARASHTRA” submitted by MR.
Somnath Pal has been successfully completed during Bachelor of
Management studies semester v academic year 2005-06 in partial
fulfillment of Bachelor of Management studies course under
University of Mumbai through Mahatma Education Society’s
pillai’s college of Arts, Science and Commerce, Panvel-410206
Date: (PROJECT GUIDE)
I sincerely thank and acknowledge the guidance rendered to me by
Prof: seema unikrishnan who has been a source of unparallel
inspiration to me in successfully pursuing my studies and project
work related to the course.
I wish to state my successful completion is attributed and directly
related to the efforts and guidance provided by her.
I further wish to thank Mrs. Joyti j. Naik (President, Shri Mahila
Griha Udyog Lijjat Papad) all the other professors and the non –
teaching staff of the institute for help extended by them.
Lastly I thank all my batch mates for all the support that they
extended to me.
Sr.No. Topic Page
2. Philosophy of Co-operation
3. Itihaas - History of Co-operative Movement
• Co-operative movement world wide
• Co-operative movement in India
• Co-operative movement in maharashtra
4. SANSAAR - Co-operative Movement in Maharashtra
• Agricultural societies
• Non-agricultural societies
5. Prashaasan - Organization of Co-operation Department in
6. NIYAMAN - Laws of the Co-operatives
7. SHIKSHAN - EDUCATION AND TRAINING
8. Nirmaan - Formation of Societies
9. TAARAANGAN- THE SHINING EXAMPLES
10. YOJANAA - The Schemes of Progress
11. PROBLEMS OF CO-OPERATIVES IN MAHARASHTRA AND
THEIR REMEDIAL MEASURES
12.Shri Shri Shri Mahila Griha Udyog Lijjat Papad
The evolution of Co-operative in the world can be traced from time immemorial, beginning
from the day individual first joined hands for the advancement of common pursuits in life.
Modern Co-operative Movement is generally dated from the foundation of the Rochdale
Equitable pioneers at the end of 1844. The structure and rules of the Rochdale Co-operative
Society of weavers formed the model for countless successors not only in England but also
in other countries and continents. In India Co-operative movement in its modern form
started in the year 1904 with the advent of Co-operative Credit Societies Act on 25th
March 1904. The movement has been acknowledged as an instrument towards achieving
the socio- economic transformation of Indian society with special focus on the life of
people living in rural areas.
Co-operation since inception has been striving hard to usher socio-economic development
of our country. It is with the concerted and sustained efforts over decades by the Co-
operatives that they have about 21 crores membership covering 67% of rural households
and 99% of the villages in our country.
Indian Co-operative Movement was basically organized against the exploitation of
unscrupulous money-lenders to exonerate the farming community from the web of poverty
and indebtedness. The Government took lot of measures to improve the conditions of the
farming sector and as such promoted Co- operative Credit Societies in the light of
Raiffeisen model credit societies on the basis of recommendation of Sir Fredrick Nicholson
1889. Now co-operatives and formal legal entities under a statute have been existence for a
hundred years .It is, therefore, an appropriate time to discuss the pace of its progress and
emerging challenges in the competitive business environment.
Orissa Review * December - 2004
To-day Co-operative movement in India is one of the largest movements in the world.
Initially it was started with a limited spectrum of activities or dispensation of rural credit
has now entered in all fields of economic activity with social content. We are proud of the
movement which has covered 100 per cent villages and 75 per cent rural households and
functioning over 545 thousand Co-operatives of various levels with membership coverage
of 236 million and working capital of 34,00,555 million inclusive of credit and non-credit.
It has been playing a significant role in disbursing agricultural credit, distribution of
agricultural inputs, providing market support, processing, etc. The share of Co-operatives
in National economy is as follows:
• Rural Net work (villages covered) - 100%
• Agricultural Credit disbursed by Co-operatives - 46.15%
• Fertilizer disbursed (6.049 million Tonnes) - 36.22%
• Fertilizer production (3.293 M.T. - N&P) Nutrient - 27.65%
• Sugar produced (10.400 million tonnes) - 59.0%
• Capacity Utilization of Sugar Mills - 111.5%
• Wheat Procurement (4.50 million toones) -31.8%
• Animal Feed Production/Supply -50%
• Retail Fair Price Shops (Rural + Urban) - 22%
• Milk Procurement to Total Production- 7.44%
• Milk Procurement to Marketable surplus -10.5%
• Ice Cream Manufacture - 45%
• Oil Marketed (Branded) - 50%
• Spindlage in Co-operatives (3.518 million) - 9.5%
• Cotton Marketed / Procurement - NA
• Cotton yarn/Fabrics Production - 23.0%
• Handlooms in Co-operatives -55.0%
• Fishermen in Co-operatives (Active) - 21%
• Storage Facility (Village level PACS) - 65.0%
• Rubber processed and marketed - 95.0%
• Arecanut processed and marketed - 50%
• Direct employment generated - 1.07 million
• Self-Employment generated for persons - 14.39 million
• Salt Manufactured (18,266 Metric Tonnes) - 7.6%
(Excerpts: Profile of Indian Co-operative Movement-2002)
The statistics here indicates that modern cooperative movement has made tremendous
progress in every walk of its activities and occupies a major place in the share of the
National economy. Thus the importance of Co-operative movement cannot belittled.
This project deals with cooperative movement in Maharashtra, Which is one of the major
States of India. It is also the most urbanized and industrialized State. Co-operative
movement is widespread and has a long history in Maharashtra and even today it plays an
important role in the economy of Maharashtra. In this project I tried to cover each and
every aspect of cooperative movement in Maharashtra i.e. history of cooperative movement
in Maharashtra, the organization of cooperation department in Maharashtra law of
cooperatives in the state of Maharashtra, e.t.c. which will clear your doubts on working of
cooperative sectors in maharashtra.
Itihaas - History of Co-operative Movement
Co-operation is a worldwide phenomenon. Experiments in co-operation have been
carried on for over a century. In India the phenomenon came a little later. This section
deals with the Itihaas- the history of co-operation movement.
• Co-operative Movement World Wide.
• Co-operative Movement in India.
• Co-operative Movement in Maharashtra.
Co-operative Movement in the World
The earliest co-operatives were set-up among the weavers, in other words workers in
cottage industries, who were the first and the hardest hit by the development of the
mercantile economy and the industrial revolution.So the weavers, in order to gain access to
the market in the tools of their trade or to the market in foodstuffs set up the first co-
operative in Scotland (Fenwick, 1761; Govan, 1777; Darvel, 1840), in France (Lyons,
1835), in England (Rochdale, 1844) and in Germany (Chemnitz, 1845).
Though co-operation and mutual enterprise has been an essence of human-society ever
since it evolved, the real co-operative movement can be credited to the Rochdale Pioneers
who established a co-operative consumer store in North England. This store can be called
as the first in the co-operative consumer movement.The "Rochdale Pioneers", made their
first aim to establish co-operatives where the members would not only be their own
merchants but also their own producers and their own employers.Around this time the co-
operative movement was more at a utilitarian level. The concept though old was just being
implemented and was growing slowly. Many great thinkers, far-sighted men and
visionaries were applying their minds to find practical solutions to the new problems and to
work out better systems of social organization.
In Great Britain Robert Owen (1771-1858) conceived and set up self-contained semi-
agricultural, semi-industrial communities.Dr. William King (1758-1865) helped to spread
Owen’s doctrine, his ideas were more reasonable than Owen’s and achieved more results.
In France Saint-Simon (1760-1865) worked on various theories of "associations".But it was
Proudhon (1796-1865) who advocated mutual aid and "free credit" for free access to the
money market and Buchez (1796-1865) who championed the idea of inalienable collective
capital and workers’ production co-operative societies.Schulze-Delitzsch (1808-1883) was
the apostle of urban credit co-operatives and co-operatives in handicrafts, while
F.W.Raiffeisen (1818-1888) did the same for rural credit co-operatives.
Though all these visionaries had articulated the philosophy of co-operation it was not until
the World-War II that an Authoritative Commission was appointed by the International Co-
This Commission formulated or rather formalised the principles of co-operation.
1. Voluntary and open membership
2. Democratic Management
3. Limited interest on capital
4. Patronage dividend in proportion of members’ transactions
5. Education and Training and
6. Co-operation among co-operatives
There have been also other principles like the principles of political neutrality, correct
weight and measures, purity of goods and thrift, which were also taken into consideration.
These principles have been reformulated recently by the Manchester Congress in 1995 and
now the principles of co-operation are as follows:
Ist Principle: Voluntary and Open Membership:
Co-operatives are voluntary organizations, open to all persons who use their services and
willing to accept the responsibilities of membership, without gender, social, racial, political
or religious discrimination.
IInd Principle: Democratic Member Control:
Co-operatives are democratic organizations controlled by their members, who actively
participate in setting their policies and making decisions. Men and women serving as
elected representatives are accountable to the membership. In primary co-operatives
members have equal voting rights (one member, one vote) and co-operatives at other levels
are also organized in a democratic manner.,
IIIrd principle: Member Economic Participation:
Members contribute equitably to and democratically control the capital of their co-
operative. At least part of that capital is usually the common property of the co-operative.
Members usually receive limited compensation if any, on capital subscribed as a condition
of membership. Members allocate surpluses for any or all of the following purposes:
developing their co-operative, possibly by setting up reserves, part of which at least would
be indivisible, benefiting members in proportion to their transactions with the co-operative
and supporting other activities approved by the members.
IVth Principle: Autonomy and Independence:
Co-operatives are autonomous, self-help organizations controlled by their members. If they
enter into agreements with other organizations, including governments or raise capital from
external sources they do so on terms that ensure democratic control by their members and
maintain their co-operative autonomy.
Vth Principle: Education, Training and Information:
Co-operatives provide education and training for their members, elected representatives,
managers and employees so that they can contribute effectively to the development of their
co-operatives. They inform the general public particularly young people and opinion
leaders about the nature and benefits of co-operation.
VIth Principle: Co-operation among Co-operatives:
Co-operatives serve their members most effectively and strengthen the co-operative
movement by working together through local, regional, national and international
VIIth Principle: Concern for Community
Co-operatives work for the sustainable development of their communities through policies
approved by their members.
The seventh Principle was added at the Manchester Congress of 1995.
Co-operative Movement in India
Co-operation occupies an important place in the Indian economy. Perhaps no other country
in the world is the co-operative movement as large and as diverse as it is India. There is
almost no sector left untouched by the co-operative movement.
The main areas of operation of co-operatives in India are as under.
1. Agricultural Credit
2. Agricultural supplies
3. Agricultural Marketing
4. Agricultural Processing
5. Functional co-operatives in the fields like dairy, poultry, fisheries, fruits, vegetables
6. Industrial co-operatives
7. Public Distribution of essential commodities through consumer co-operatives
8. Urban credit Co-operatives
9. Housing co-operatives
Co-operative movement in India is the result of a deliberate policy of the state and is
vigorously pursued through formation of an elaborate governing infrastructure. The
successive Five-year plans looked upon the co-operation movement as the balancing sector
between public sector and the private sector.And the success is evident. Almost 50 percent
of the total sugar production in India is contributed by sugar co-operatives and over 60
percent of the total fertilizer distribution in the country is handled by the co-operatives. The
consumer co-operatives are slowly becoming the backbone of the public distribution
system and the marketing co-operatives are handling agricultural produce with an
astounding growth rate.
The National Co-operative Development Corporation (NCDC), a statutory body was set up
in 1963 by the Union ministry of Civil Supplies and Co-operation, to promote the co-
operative movement in India.Further there is the Indian Farmers Fertilizer Co-operative
LTD (IFFCO), which has been successful in setting up an effective marketing network in
most of the states for selling modern farming technology instead of fertilizers alone. The
operations of IFFCO are handled through its more than 30,000 member co-operatives.The
National Agricultural Co-operative Marketing Federation (NAFED) has over 5000
marketing societies. These societies operate at the local wholesale market level and handle
agricultural produce. Thus the farmers have a market for their produce right at their
doorstep. A market, which assures them reasonable returns and guaranteed payments.All
these Federations are acting like the spokesmen of member co-operatives and are doing
liaisioning work between the co-operatives and the Government.
In India we find that the states of Maharashtra and Gujarat are well developed. Whereas
the states of Andhra Pradesh, Rajasthan and Karnataka have shown remarkable progress in
the co-operative movement and there is a vast potential for the development of co-
operative in the remaining states.
Co-operative Movement in Maharashtra
Maharashtra is one of the major States of India. It is also the most urbanized and
industrialized State.Co-operative movement is widespread and has a long history in
Maharashtra and even today it plays an important role in the economy of Maharashtra. The
genesis of the co-operative movement in Maharashtra can be divided into six stages.
1. The pre-co-operative stage (1870-1903)
With the Deccan Agriculturists’ Relief Act, The land Improvement Loan Act 1883 and the
Agricultural Loans Act, the Nickolson Report.
2. The Initial Stage (1904-1911)
From the Agricultural Credit Co-operative Societies Act 1904 to the creation of the
Bombay Central Co-operative bank.
3. The Evolution Stage (1912 to 1924)
After the Co-operative societies Act of 1912, the movement passed through a new phase of
re-organization: formation of co-operative financing agencies, formulation of co-operative
educational schemes and organization of non-credit societies.
4. The Stagnation Stage (1925-1947)
The enactment in 1925 of the Bombay Co-operative Societies Act widened the cope of the
movement in the Bombay province both horizontally as well as vertically. The Bombay
Co-operative Insurance Society was established in the year 1930. In the same year the Co-
operative Land Mortgage Bank was also formed for long term financing for redemption of
debts, land improvement and purchase of land.
5. The Growth Stage (1948-1961)
There was an all-round progress during these two decades after India attained
Independence from the British Rule. The movement diversified especially in the rural area
where sugarcane was grown. The agriculturists pursued this concept of self-help and made
the best use of the credit facilities given to them for augmenting the production. Examples
like the Pravaranagar Sugar Co-operative inspired many to organize co-operatives in the
sugar sector with long-term goals in mind. Significant attitudinal changes had occurred at
the grass root level.This was also the period of emergence of rural leadership through co-
operative movement.The Apex Bank also started to strengthen its organization and the
working of the secondary level central financing agencies. This was also the period where
institutional foundation was strengthened.
6. The Diversification Stage (1962 onwards)
Expansion, accompanied by extensive vertical and horizontal diversification embraced all
fields of socio-economic activity with gains varying from 2 to 6 times.The State
government initiated policies and programs to strengthen the co-operative effort. Some of
the noteworthy features of the movement during this period were the increased
mobilization of resources, strengthening the co-operative effort in the sphere of agricultural
production and the building of rural leadership.The State Co-operative Bank also built up
the necessary strength to provide support to the government programs of intensive
production and procurement of food grains, financing of sugar factories and other new
industries in the co-operative sector.The co-operatives have helped the rural economy of
Maharashtra tremendously. It has been able to groom grass root level leadership and bring
about peaceful socio-economic changes and help institutionalize the rural economy to a
The following table shows the progress of the Co-operative Movement in Maharashtra
No. Type of Co-op 1961 1981 1991 1996 1997 2003
1 Apex & Central
Agri / Non Agri Credit
39 31 34 34 34 34
2 Primary Agri Credit 21,400 18,577 19,565 20,137 19,068 20,839
3 Non-Agri Credit 1,630 5,474 11,291 17,671 10,359 25,107
4 Marketing Co-ops 344 423 931 1,044 985 1,252
(Including Sugar factories,
spinning mills etc.)
4,306 14,327 28,954 41,985 41,985 40,171
Service co-ops (consumer
stores/ Housing etc)
3,846 21,915 43,845 58,218 64,354 85,
This Table gives an idea about the progress of the co-operative movement in Maharashtra
over the years.
SANSAAR - Co-operative Movement in Maharashtra
Co-operative Movement has been recognized as an effective instrument for the economic
development of the rural masses and for improvement in the socio-economic condition of
the underprivileged. Since majority of the population of Maharashtra lives in the rural areas
and is involved in agricultural activity, the co-operative movement here assumes greater
significance. Today we find that co-operatives are found in almost all the pockets of
Maharashtra and have been vastly successful in the overall improvement of the quality of
life in the rural areas. This is a success of not only the people of Maharashtra but also of
the co-operative movement itself.
The co-operative movement in Maharashtra has not only improved the lives of the people
here but has made significant contribution to the economy of the State itself. Today
Maharashtra is considered as the land of opportunities as it is one of the most developed
states not only economically but also in terms of infrastructure. Without doubt a major
credit goes to the co-operative sector, which has not only promoted and developed rural
leadership, which can certainly be termed as the leadership of the masses but also has been
involved in promoting the development of infrastructure in the State.
The co-operative sector in Maharashtra can be classified in two ways:
A. Agricultural Societies
B. Non-Agricultural Societies
A. Agricultural Societies
Since Agriculture is the prime activity and also an activity where co-operation can really
support the poor and marginal farmers, these co-operatives assume vast
importance.Obviously the first stage where the farmers need support is for purchase of
seeds, fertilizers insecticides etc. Hence agriculture credit is the foremost priority.
i. Agricultural Credit:
The co-operative agricultural credit structure in Maharashtra is a three-tier structure.
Short & Medium Term Credit Long Term Credit ->
Central Co-op Banks at district level - >
Primary Agricultural Credit Societies at Village Level
• Long term credit Mascard Bank - >
Branches at district level - >
Sub Branches at Taluka level.
(MASCARD Bank is Maharashtra State Co-operative Agriculture and Rural Development
Thus the agricultural credit reached the farmers right up to their doorstep through the
Primary Agricultural Credit Societies (PACS).The Short Term loan is made available for a
period of 12 to 15 months for meeting the cost of expenditure during the agricultural
season Medium Term loan is given for a period of up to five years for the purchase of
bullocks, carts, repairs to old wells etc.The Long Term Loans are granted for period
exceeding five years mainly for sinking of wells, permanent fencing, purchase of land,
purchase of heavy agricultural machinery like tractors etc as well as for lift irrigation
The life of the farmer is full of problems- smallholdings, indebtedness, and lack of
irrigation facilities leading to low productivity. He is traditionally used to dealing with one
single agency for satisfaction of all his credit requirements. Thus the local trader/money
lender not only lends him money for his seeds, fertilizers, insecticides etc. but at times also
provides these necessities to him. The trader/moneylender also provides him credit for his
household needs. And when the crops are harvested the trader also markets the crops.
In their initial days the rural credit societies could not satisfy the needs of the farmers.They
did not have enough funds or facilities to offer to the farmers. Thus the farmers continued
to rely on the moneylenders and suffer.Thus came the advent of multipurpose co-
operatives. However since the societies at the village level were small in size, they could
not provide adequate services to their members. The Government therefore gave financial
assistance to these societies and thus increased their borrowing capacity.Crop Loan System
has also been introduced.
The government has introduced various schemes to improve the economic conditions at the
1. Subsidy to Agricultural Credit Stabilization fund
2. Contribution to Risk Fund
3. Share Capital Contribution
4. Loans to Co-operative Credit Societies for the conversion of Loans from Short
Term to Medium Term.
5. Crop Production Incentive to agriculturists.
District Central Co-operative Banks:
There are 30 such Banks in Maharashtra whose primary object is to provide for the credit
requirements of the Primary Credit societies. The first such secondary level co-operative
was registered in Mumbai in 1911 under the Government of India Act, 1904. Since then
these Central Banks have laid the firm financial infrastructure for the co-operative
movement in Maharashtra.
The progress of the District Central Co-operative Banks can be seen from the following
(Rupees in Millions)
1961 1991 1995 2002
No. Of Banks 35 30 30 30
Branches . 3147 3516 3804
Members 57,000 84,000 94,000 119000
Share Capital 65.3 1889.6 2963.7 7863.2
Deposits 264.7 31994.0 63987.4 195734.7
Working Capital 609.3 48349.2 89069.7 274986.5
Loan Outstanding 436.1 30783.6 52208.8 155756.3
Profit 5.0 171.4 363.3 1604.
The State Co-operative Bank
The State Co-operative Bank, which is at the top of the credit structure, is also called as the
Apex bank. Its functions are to co-ordinate and to guide the working of the Central Banks
and to arrange re-finance for them. It thus acts like a supervisory body at the top and
arranges to spread the co-operative movement.
The progress made by the Apex Bank is as under
(Rupees in Millions)
1961 1991 1995 2002
No. Of Branches 20 43 45 46
Members 11,000 26,000 29,000 40,000
Share Capital 32.6 281.6 455.5 1,869.1
Deposits 215.3 20,936.2 36,085.2 101,974.7
374.2 21,731.4 31,189.4 88,303
Profit 2 68.6 101.5 106.8
The Maharashtra State Co-operative Agricultural and Rural
Development Bank (MASCARD)
The MASCARD Bank floats debentures for making provision of long-term loans to the
member Banks.These debentures are purchased mainly by the State Government, however
it is necessary for it to create a strong asset base so that it can secure the loans raised by it.
The progress made by the bank is as follows
(Rupees in Millions)
1961 1991 1995 2002
Members 8,000 1,021,000 1,138,000 828,000
Share Capital 5.1 543.6 780.5 449.5
Working Capital 74.6 8371.0 11631.4 12263
Loans Advanced 21.5 1243.8 1366.2 Nil
Debentures Issued 35.0 1022.6 1458.0 Nil
53.6 5510.7 8495.0 9382.1
The Government vide order No.LDB-1099/C.N.37/7-C, dated 29.12.1999 has bifurcated
the Maharashtra State Cooperative Agricultural and Rural Development Bank into 29
District Agricultural Cooperative and Multipurpose Rural Development Bank. There will
be apex bank of these district banks called as Maharastra State Cooperative Agricultural
and Multipurpose Rural Development bank.
II. Co-operative Marketing:
After providing financial assistance to the farmer by the co-operative credit system, the
second logical step is to provide the farmer marketing facilities to sell his produce. The
main object of the co-operative marketing bodies is that the farmer should get fair value for
his produce, his produce should be measured in a correct manner and that he should get his
payments on time.
The Maharashtra State Agricultural Produce (Marketing Regulation) Act 1963 was enacted
to regulate the Agricultural Marketing. The Agriculture Produce Market Committees
(APMC’s) were established under this Act and it also provides for setting up of the
Maharashtra Agriculture Marketing Board. The post of Director of Agriculture Marketing
is also envisaged under this Act.
The following functions come under the purview of Marketing.
1. Agriculture Produce Marketing Committees
2.Co-operative Processing Societies
3.Co-operative Marketing Societies
4.Co-operative Consumers Stores
The farmers take their produce to their village level Sale-Purchase Co-operative Society.
These societies ensure that the produce is weighed correctly and the farmer gets a fair price
for his goods. These societies also ensure that deductions of loans extended to the farmer
under various schemes are made and the farmer receives the balance amount speedily.
There are also similar co-operative sale-purchase unions at the Taluka level and the District
level. The District level co-operative unions join in the Maharashtra State Co-operative
Marketing Federation. Thus there is an elaborate marketing set-up for marketing of
agricultural produce of the farmers.The Federation has over 129600 members and is owned
funds in 2002 were 478.1 million Rupees on a share capital of Rupees 129.6 million.There
is also the Maharashtra State Co-op Floriculture Development Board, which has begun
exporting flowers on an experimental basis. Varities of Roses, Gerbera and Jasmine are
Farmers Co-operative Societies have been organized by farmers growing Grapes and
mangoes. About twenty-five such societies whose members are Grape growers have joined
in a partnership called MAHAGRAPE. A similar such partnership has been created by the
mango-growers societies called MAHAMANGO. These co-operative partnerships
undertake the activity of marketing these fruits and also exporting them since Indian
Mangoes are world-famous.
Agricultural Processing Co-operative Societies
After the farmer is provided with credit for agricultural activity, by the co-operative
agricultural credit system, he may also require the help of processing his produce for value-
addition. Again the co-operatives step in.
The agricultural processing societies provide means to employ rural capital and labour,
thereby securing reasonable returns to the primary producers. These societies are given
financial assistance for setting up of processing units of Agricultural Produce like Ginning
and Pressing in case of the cotton growers, Oil Mills, rice Mills, Fruit and Vegetable units
etc.In the processing co-operatives it is essential to mention that the sugar co-ops and the
cotton ginning and processing co-ops have done tremendous work.Though much headway
has not been done in the field of fruits and vegetable processing in the co-operative sector
in Maharashtra, there exists a tremendous potential for the same.
Consumers Co-operative Movement
It is not just important for the co-operatives to just acquire raw goods as in the case of the
Agricultural Societies. It is also necessary that the goods reach the final consumers and the
consumers get the commodities at fair price, fair weight and fair quality. For this the co-
operatives have the Maharashtra State Co-operative Consumers Federation at the top. This
Federation controls the working of the Co-operative consumer Societies which supply
goods in wholesale and are organized District wise. These wholesale Consumer Societies
distribute the goods to Primary Co-operative Consumer societies whose outlets supply
goods to local consumers.
Agricultural Produce Market Committees (APMC's):
The Agricultural Produce Market Committees are the statutory bodies established under the
provisions of the Maharashtra Agriculture Produce Marketing (Regulation) Act,
1963.These Committees are mainly established to regulate the marketing of Agricultural
Produce so as to avoid exploitation of the producers.The APMC's create the infrastructure
for the agricultural markets in their operational areas at main market-yards and sub market-
yards. At present there are 265 APMC's and 572 sub-yards in Maharashtra State. There is
a programme to establish number of markets in Adivasi and backward areas of the State
during the Ninth Plan period.
Though Warehousing is not directly a function covered by the co-operatives, it is an
essential infrastructure, which has been provided by the State Government. It is essential
that agricultural produce should be stored. The Maharashtra Warehousing Corporation Act
provides for the setting up of warehouses to aid the farmers to store their agriculture
produce. Besides the Warehousing Corporation the agriculture co-operatives provide for
the storage facilities to members under the provisions of the National Grid of Godowns and
the NCDC Godowns Schemes.
The Government of India has sanctioned a scheme for establishment of National Grid
Godowns. The main objective of the scheme is to meet the storage requirement of
Agricultural Produce of particularly small and marginal farmers. The assistance is being
made available to Agricultural Co-operative Societies, Agricultural Produce Marketing
Committees and Maharashtra State Warehousing Corporation.The scheme envisages
financial assistance up to 50% of the cost of the storage facility by the Central and State
Government. This assistance is given in form of subsidy.
Co-operation works not only in the agriculture sector in Maharashtra but also in the non-
agriculture. Considering the fact that Maharashtra is the most urbanised State of India it is
but natural that Maharashtra co-operatives should have a strong presence in the urban
region as well.
The non-agricultural Societies are as follows
These societies are also present in the rural areas as their activities are common to both
urban as well as rural areas.
The Urban Co-operative Credit System is as follows:
There are several urban co-op credit societies, which give credit to their members. These
societies are organized at the grass root level. There are Urban Co-operative Banks which
carry out regular Banking activities. These Banks and Credit societies join the District
Central Co-operative Banks. Besides there are also co-operatives like the Salary Earners
Co-op Societies which form part of the co-operative credit system.
2. Industrial Societies
Industrial societies are organized by the artisans and workers to get employment and to
create adequate facilities to carry on their trade. The Government gives assistance to such
societies under various schemes. Over 310 societies have been organized as block Level
Village Artisans Multipurpose Co-operative Societies in the State.Some of the facilities
given by the government are contribution to share capital, financial assistance for tools and
equipments, loans and subsidy for construction of Godowns, workshops etc.
3. Housing Societies
Housing societies are mainly an urban phenomenon. There are four types of housing
a. Tenant Ownership: In the case where the land is owned by the Society and the structure
on the plot is owned by the members. Individual members are allotted plots by the co-
operative to construct their houses. The society creates infrastructure and may also arrange
the finance for the members.
b.. Tenant Co-partnership : The land and the constructed structure is owned by the
society and the members who are allotted the flats have the easement rights.
c. Builder Co-operative: where the builder floats a housing scheme and sells the flats .
The buyers of the flats then organize into a housing society. Such societies are merely
service societies or maintenance societies.
d. House Mortgage Society: House Mortgage Society provides loans to individuals having
the piece of land anywhere in the area of its operation, for construction of houses. House
Mortgage Society borrows money from various sources for this purpose.
4. Labour Contract Societies:
The labour contract societies are organized mainly from the labourers whose sole source of
livelihood is manual labour, as well small farmers, with a view to assure them gainful
employment and adequate distribution of profit amongst themselves. Government has
granted several concessions to these societies due to which most of these are in profit.
The main source of business for these societies is from the Public Works Department of the
Maharashtra State. A Technical Cell has been created to assist the Labour Co-operatives
and their Federations and to act as a liaison with the Work Awarding Agencies. In the year
2001-02 the Labour Contract Societies have executed works to the tune of 5406.6 million
The Government has also promoted certain special interest-group co-operatives like the
women’s co-operatives to promote economic growth of the women. Under the financial
assistance scheme the Government contributes up to one hundred thousand Rupees as share
capital, working capital and subsidy to the newly organized women’s co-operatives.
Prashaasan - Organization of Co-operation Department
Administration of co-operatives is done by an independent department of co-operation in
the Ministry of Co-operation and Textiles in Maharashtra. The Minister for co-operation is
the overall in charge of the co-operative administration, who is assisted by the Minister of
state for Co-operation. On the executive side the Principal Secretary for co-operation to the
Government of Maharashtra, heads the department at the Mantralaya level at Mumbai, he
is assisted by a number of Deputy Secretaries. Department of Co-operation is headed by
the commissioner for Co-operation as a head of the department at the field level, having his
office at Pune. The Commissionerate of Sugar, Pune looks after the sugar co-operatives,
whereas the Director of Agricultural marketing, Pune and the Director of Handloom,
Power loom and Co-operative Textiles are concerned with the Agricultural Marketing and
co-op textiles. The hierarchy of the Co-operation Department in Maharashtra with the
addresses of the offices is given below.
Minister for Co-operation Shri Vilasrao Deshmukh (VIth Floor, Mantralaya, Mumbai)
(022) 2025151 Chief Minister, Maharashtra (022) 2025222
Minister of State for Co-operation Shri Babasaheb Kupekar (V th Floor Mantralaya,
Mumbai)(022) 2831983(022) 2837261
Minister for Agril.Marketing Shri Ganapatrao Deshmukh (IIIrd Floor, Mantralaya,
Mumbai) (022) 2025398
Secretary (Co-operation) Shri Rajiv Agrawak, I.A.S.(IIIrd Floor, Mantralaya, Mumbai)
Commissioner for Co-operation & Shri Dr. Sudhir Kumar Goel I.A.S (Central Building,
Pune 411 001) (020) 6122500
Registrar Co-operative Societies,
Maharashtra State, Pune.
At each Revenue Division Headquarters viz. Mumbai, Pune, Nagpur, Amravati, Nasik and
Aurangabad. The Administration Wing is headed by Divisional Joint Registrar, Co-
operative Societies and the Audit Wing is headed by the Divisional Joint Registrar, Co-op
Societies (Audit) District Deputy Registrar Co-op societies and the District Special Auditor
Co-op societies are the District heads of Administration and Audit of co-operative
department at each district in the State. At the Taluka Level, there are Taluka Assistant/
Deputy Registrars and Taluka Auditors to carry out the functions of Administration and
The hierarchy of the co-operation department is given as under.
Commissionerate of Sugar.
Laws of the Co-operatives
Co-operation is an activity of the people. It is a self-generated, voluntary and self-sufficient
activity. Hence little governmental interference is desirable. However considering the
economic parameters of this movement and interests of several persons involved there is a
possibility of misuse of personal power by any of the group-members. The governments
therefore had to pass legislation to monitor the activities of the co-operatives mainly with
the purpose of safeguarding the interests of all the members.Great Britain for example had
passed legislation as early as 1852. Similar intervention of legislature can be seen in
Germany and France (1867) and Italy (1883).
In Maharashtra the Co-operatives are governed by the Maharashtra Co-operative Societies
Act 1960 and supported by Maharashtra Co-operative Societies Rules, 1961. The legal
system in the co-operatives registered in Maharashtra State is elaborate. Moreover each co-
operative should have its own Byelaws, which are the guiding principles of the co-
operative. These Byelaws have to be approved through a resolution of the Society. These
byelaws can be amended in the General body Meeting of the co-operative. The only
condition on the byelaws is that they should not be contrary to the Maharashtra Co-
operative Societies Act, and have to be approved by the Registrar.
The legal framework essentially covers the following aspects:
• Registration of Co-operative Societies
• Rights of the members
• Privileges of the Societies
• Property and Funds of the Society
• Management of the Society
• Audit, Inquiry and Inspection
• Liquidation of Societies
• Offences and Penalties
• Appeals, Reviews and Revision
• A co-operative society can be registered in Maharashtra State with the Registrar of
• Any person competent to contract, as per the Indian contract Act, 1872 can join in
the formation of a co-operative.
• A group of ten persons who reside in the area of operation of the proposed society
and are from different families, can join in application for registration of a society
• A society with the objects of promoting the economic interests or the general
welfare of the members only can be registered.
• No society that is contrary to the policy directives of the State can be registered.
• Registration can be obtained from the registrar on filling up the application form
with the necessary fees and the byelaws.
• Division/Amalgamation/Transfer and conversion of a co-operative is allowed
• A Co-operative Society can enter into collaboration with any Government
Undertaking or any other undertaking with the prior permission of the State
Government for business.
• It can also enter into a partnership with other co-operatives.
• The legislation provides for open membership.
• Eligible person can appeal to the Registrar if his membership application is rejected
by the society.
• A person can file membership application to the Registrar, if it is not accepted by
• A member has voting rights in election of the Managing Committee and in general
meeting of the members. Every member has one vote, irrespective of the total
number of shares held by him. Proxy voting is not allowed
• A member can inspect the books of account of the society and obtain its copies.
• There are three types of members in a society - Nominal, Associate and
Sympathiser. A Nominal or a Sympathiser member cannot possess shares of the
society and as such do not have the rights of an associated member.
• A Society is a Body Corporate by the name with perpetual succession and
• It can acquire, hold and dispose off property in its name.
• It can enter in a contract.
• Institute and defend suits and other legal proceedings.
• It is exempted from compulsory registration of Instruments relating to
shares and debentures of Society under the Indian Registration Act 1908
• The society has claim only next to the Government, on the property and
interest of the borrowing members.
• The society has claim over the sale price of agricultural produce of the
• It is mandatory on the part of the employer to deduct from the salary of the
employee, dues of the Society, if agreed upon by the member.
• The Society can receive deposits and loans from the members and other
persons within the area of operation of the Society and /or on conditions
imposed by the Registrar
• Loans can be advanced to the members only. With the prior permission of
the Registrar, loans can be advanced to other Societies.
• The Society has to keep and maintain updated records in prescribed format.
• There are restrictions on the transactions with the non-members.
• The final authority of the Society vests in the General Body of the Society
comprising of all the members.
• Every Society shall call Annual General Meeting within a period of three months
after the date fixed for completing or drawing up of its accounts for the year.
• At every Annual General meeting, the Managing Committee shall lay a statement
of loans given to the members of the Managing Committee and their family
members, Income and Expenditure Account, Balance Sheet, a Report by the
Managing Committee regarding the Society’s affairs. Failure to do so may attract
the disqualification of the members of the Managing Committee and other
• A Special General Meeting can be called by the Chairman of the Co-operative or by
majority of the members of the Managing Committee. Members too can requisition
for such a meeting if 1/5 Th of the total members of the Society endorse this
requisition. The Registrar also has the powers to call for a Special General meeting.
So can the committee of the Federal Society do so. Failure to call for this meeting
may attract penalty for the Managing Committee.
• It is the duty of every Managing Committee to arrange for holding of elections of
its members before the expiry of its term.
• Election to a Specified Society shall be conducted by the Collector and that
of a Notified Society by the Registrar.
• Management of the Society vests in a duly constituted Managing Committee.
• Reservation for the weaker section, women and scheduled castes/tribes has been
provided in the Managing Committee.
• No committee is duly constituted unless the Registrar publishes the names of the
members of the Managing Committee along with their addresses.
• If a Managing Committee of a Society is not duly constituted, the Registrar may
appoint an Administrator.
• An Administrator can also be appointed (for a period of six months) by the
Registrar if the Managing Committee is removed for negligent performance as per
the provisions of Co-operative Law. A member of the Managing committee can
also be removed by the Registrar for negligent performance.
• The Managing committee can appeal against its removal / dismissal.
• Office bearers of a Society can be removed by the way of No confidence motion.
Such a no confidence motion has to be supported by at least one-third of the
members of the managing Committee. Removal from office is effected only after
the resolution is passed by a simple majority in the Managing Committee.
• No funds shall be divided among its members, other than the net profits earned by
• The society’s funds cannot be utilized to defend any proceedings filed by or against
any office bearer of the Society, in his personal capacity under sections 78, 96 or
144-T of the Maharashtra Co-operative Societies Act, 1960.
• Remuneration can be paid to the Managing Committee members for services
provided by them to the Society.
• Net Profit earned by the Society can be appropriated by the members with the
approval of the Annual General Meeting.
• Reserve fund shall be maintained by the Society
• Investments of Funds shall be made as per the guidelines prescribed in the
Maharashtra Co-operative societies Act, 1960
The Registrar of Co-operative Societies makes it compulsory for every
Government -aided Co-operative Society to audit its accounts at least once in a
co-operative year (i.e. April - March).
• All the other Societies also have to get their accounts audited by a Certified Auditor
once in every co-operative year.
• A Registrar has powers to order the Society to be re-audited. This is however done
by him slow-motion or in the case where 1/3rd members of the Society apply to him
• The Registrar can inspect the working of the Society on his own or on application
of its creditors.
• The Registrar can commission an inquiry into the affairs of the Society on the basis
of the audit report or an inspection report. He can appoint an Inquiry Officer and
conduct an inquiry through him. Similarly he can also conduct inspection of a
Society just to ascertain that all the Books of Accounts are being maintained
properly and that the affairs of the Society are being conducted reasonably by the
• The Registrar can order for compensation, if it is found That any person has
misapplied or retained any property, or money of the Society, or has caused breach
• Performance or Cost Audit
• Test Audit
• Social Audit can also be conducted on the affairs of the Society.
• Disputes can be raised by any member regarding Election of a Managing
Committee, or the Officers. Disputes can also be raised about the conduct of the
General Meeting and the management or business of the Society. 7Such disputes
can be settled in special courts, which deal with only the Co-operative matters.
These courts are called as Co-operative Courts.
• In the case of disputes, which arise due, to recover of sums disbursed by the co-
operative society. The Co-operative Court can attach the property of a member, if it
is likely to be disposed off .A certificate then issued by the official assignee or by
an authorized person or by the Co-operative Court itself shall be executed as a
decree of a Civil Court and also executed as arrears of land revenue. Any private
transfer of the property thereafter, shall be null and void against the claim Society.
• A Society can be wound up, after inquiry and audit, or on application or by the
Registrar on his own, if found that the Society has not commenced and/or has
ceased to function.
• Appeal against the order of liquidation can be made by the members.
• The Society registration can be cancelled on receipt of the final report from the
liquidator and the last General Meeting.
• The Society can also be cancelled if its affairs are wound up, or if it is de-registered
or its assets and liabilities are transferred.
Following are the offences, which are punishable under the Maharashtra co-operative
• Transfer of property on which there is a charge of the Society
• Failure to deduct dues of the Society from the Salary of an employee
• Failure to invest funds of the Society
• Failure to deposit the share money of the Society with the Bank
• Conduct private business in the name of the Society
• Collecting share money by misrepresentation
• Issuing of false share certificates knowingly
• Failure to call. General Body Meeting
• Failure to give necessary assistance to authorized persons under the Co-operative
• Failure to hand over the custody of records and property to the administrator or the
• Failure to observe directives of the Registrar
• Willful neglect of furnishing any information required by the Registrar and the
• Making of false returns
• Failure to comply with any decision, award or order
• Fraudulent disposal of any property on which society has prior claim.
• Destruction, mutilation, tampering, altering, falsifying records of the Society.
Punishments can comprise of penalty up to Rs.5000/- and/or imprisonment up to three
• The remedy of appeal is provided against refusal of Registration or amendment of
bye-laws, division, amalgamation, conversion, cancellation, de-registration, transfer
of shares, refusal and expulsion of membership, removal of managing committee,
directives to Society, cost of Inquiry and Inspection ordered by the Registrar, fixing
liability on delinquent promoters, winding up or rejection of nomination in election
• Review and Revision of orders passed by the Registrar can be made against any
other order to higher authorities
• The Maharashtra State Co-operative Appellate Court is constituted for appeal
against or seek revision /review of, the orders of the Co-operative Court.
• An appeal against the order of Assistant Registrar/ Deputy Registrar lies with the
Joint Registrar (Appeals). If the order is passed by the Joint Registrar/Additional
Registrar or the Registrar then the aggrieved party can appeal to the State
SHIKSHAN - EDUCATION AND TRAINING
Co-operation is a movement of the masses. It essentially involves collective capital and
hence the responsibility is of all the members to make the co-operative venture successful.
The first essential factor required is therefore an understanding of the concept and
principles of co-operation. Therefore education and training is very important.This fact was
realized by the Equitable Pioneers of Rochdale, who are truly the pioneers of the co-
operative movement. They had, before launching their co-operative venture in 1844 had
spent over a year in study of the problems. The Pioneers had included education among
their objects! They had actually set aside 2.5% of their trading surplus towards education.
They set up a school for young persons as early as 1850. Subsequently their Board granted
the use of a room to members for mutual instruction on Sundays and Thursdays. Later they
organized science and arts classes in the evenings, at a time when night schools were little
The constant emphasis on education can be explained in the words of Charles Gide,
"Common people with the ambition to provide for their own needs, and become their own
merchants, bankers and creditors, their own employers and their own insurers would
indeed be imprudent if they did not first equip themselves with the knowledge and faith
necessary for the task.’It has to be realized that most of the co-operatives, which are
organized, are by and for people from the more underprivileged sections of the society.
Education therefore becomes very important if the co-operative is aiming at the all-round
development of its members.
The Education Program has to be four-fold:
1.For the members:
It is the members who form the co-operative. They should well be aware of their rights,
privileges as well as duties. They should also know about the organization they have
joined, its philosophy, its objects, its culture and its ground-rules.Without the knowledge of
these facts the members will merely be names on the roll-register. They will not be able to
participate in the movement, contribute their skills to the co-operative nor will they be able
to point out the mistakes of the management committee at the annual general meeting.
2. For the Management:
Assuming that a group of people come together and form a co-operative, which intends to
do business and generate profit for its members, it is important that the members who are
elected to manage the co-operative should possess adequate managerial skills.It is therefore
necessary that the managing committee should also be educated not only about the
principles, practices and laws of co-operation but also about business management.
3. For Employees:
All the employees of a co-operative may not be members. It is therefore important to train
and educate them about the principles of co-operation as well as the objects of the
enterprise. The employees have to be trained to respond to the needs of the clients and
follow a fair trade practice. Without this understanding the best of the objects and
intentions of the co-operative are likely to fail.
4. For the Associates:
A business cannot be in a vacuum. There necessarily have to be transactions with a host of
business associates and colleagues, government officials, private persons and of course the
clients. All these persons too should understand about the principles and policies on which
you carry out your activity as a co-operative. This type of education makes the business
associates realize that they are not dealing with another organization but with a co-
operative, which ensures fair trade practice.
WHO GIVES THIS EDUCATION?
The International Co-operative Alliance has training facilities at the international level.In
India the National Co-operative Union undertakes this function. There are also State Co-
operative Unions in each state to impart education. Further there are Divisional Co-
operation Board and District Co-operative Bodies, which conduct this function at their
The Maharashtra State Co-operative Union takes care of the co-operative education and
training. It is mainly financed by an Education Fund; which every co-operative society
registered in the Maharashtra State has to subscribe to. Thus the goal of "self education
through self-help" is attained. In Maharashtra there is Vaikunth Mehta National Institute of
Co-operative Management, at Pune which offers a host of educational courses in co-
operative management. This is a unique Institute, which has international acceptance. The
courses are of advanced nature and for serious researchers/practitioners of Co-operation
Theory as well as for top-managers in co-operation sector. There are two more Institutes of
Co-operative Management (ICM’s) at Pune and Nagpur. These are the Padmashree
Vitthalrao Vikhe-Patil Institute of Co-operative Management, Pune and the Dr.
Dhananjayrao Gadgil Institute of Co-operative Management, Nagpur. These Institutes
impart education to the employees of the co-operatives and the Co-operation Department
who are working at the Middle Level.
There are thirteen Co-operative Training Centres, which impart training to the lower level
employees of the co-operatives.
Nirmaan - Formation of Societies
The basic guidelines for the formation of Co-operative society in Maharashtra State are as
1.There should be at least ten persons or more as the Registrar may determine
from time to time.
2.These persons should be from different families
3. These persons should be competent to enter into a contract under the
Indian contracts Act 1872
4. He should reside in the area of operation of the Society.
5.He should be eligible as per the byelaws of the proposed Society.
6. Any individual, firm, company or any other body corporate can become
member of the Society.
7. The object of the Society should be promotion of economic interests or
general welfare of the members or the public, in accordance with the co-
8. It should be economically sound, its registration should not affect
adversely on the development of the co-operative movement
9. Its registration should not be contrary to the policy directives of the State
Procedure of Formation of a Co-operative Society:
• Willing, eligible persons should come together and conduct a
meeting. This meeting will decide the name of the proposed Society,
its object and bye-laws and then elect a Chief Promoter authorizing
him to sign the necessary documents on behalf of the promoter
members and open a bank account in the name of the proposed
Society after obtaining the necessary permission from the Registrar.
• The Chief Promoter will apply to the Registrar for reservation of
name of the Society of the proposed society and permission to
collect share-capital.He will then deposit the collected share money
in the bank account of the proposed Society.
• The application for Registration has to be made in FORM-A. The
promoters have to give four copies of Form-A to the Registrar along
with copies of bye-laws and necessary documents depending on the
type of the Society. This has to be done only after receiving the
name reservation from the Registrar and after collection of the
necessary share capital.
• The application for registration should be accompanied with the
Scheme showing economic feasibility of the proposed Society, bank
balance certificate, and list of persons who have contributed to the
share-capital and the entrance fee of the proposed Society.
• The prescribed Registration Fees have to be paid into the
• Copy of the document authorizing any person to sign the application
on behalf of a partnership firm, Company or other body corporate
• This procedure is common for all the Societies to be registered in
The other documents/procedures necessary for a particular type of a Society are as follows:
The person who has legally acquired or intends to acquire a plot or flat in the proposed
Society can join in application for registration of a Society.
The following procedures have to be fulfilled:
• The documents pertaining to the purchase of land/building.
• Title clearance certificate.
• Sanctioned/Proposed plan and layouts for construction of building / houses.
• Proof of payment of stamp-duty and registration of documents.
• Certificate from the architect showing the scheme of construction.
• In case of Builder promoted Societies, FORM- Z and for others FORM-X is
to be submitted.
• 60 % of the total members should join in the Registration Proposal.
• These are normally the co-operatives with the objective of carrying out Industrial
Activity. These Societies are to produce goods using skillful craftsmanship. They
should share the objectives of the Society like manufacturing activities
• The promoters should have the skill for the said activity.
• A minimum of fifty- one members should form the society out of which 85% of the
total promoters should be artisans or persons engaged in the proposed business
activity of the Society.
• The promoters have to submit a project report, approved by the appropriate
authority, detailing the scheme of the production activity to be undertaken.
Labour Contract Societies:
• A labourer means an individual who undertakes manual work for wages and it is his
main source of income throughout the year. A labourer also includes marginal
• A labour contractor cannot become member of the society. A labour contractor
would include a person who either on their own account or on behalf of their
relations undertake piece-work of the nature of work undertaken by the Society.
• It should consist of atleast 51 individuals who are labourers.
Salary Earners Societies:
As the name suggests the member has to be an employee of that company or department
under whose employment the proposed society is proposed to be organized. He should be a
permanent employee and the employer should have given a certificate u/s 49 of the MCS
Act 1960 for deduction of the Society’s dues from his salary.Minimum membership is 100
It has a population-based criterion for registration so that it should become economically
viable. There are different norms for rural and semi-urban and urban areas.
Primary Agricultural Credit Societies:
It is a multi-purpose society. The farmers residing in the area of operation of
the Society can become members of these Societies. The area of operation
of such societies is a usually one or more village. Other village residents can
also become members for limited purpose.
Farmers Service Societies:
These Societies provide agricultural inputs like implements, fertilizers, seeds, pesticides
etc. Only farmers can become member of these societies.
Adivasi Service Societies:
These societies are exclusively for the Adivasi people (Scheduled Tribes). The Scheme of
the Government which is for the upliftment of the Adivasis is implemented through these
Societies. The entire produce of the adivasis is purchased by these societies. These
societies work as the agents of the Tribal Development Corporation of Maharashtra.
Primary Co-operative Banks:
Atleast 1500 members should join in the formation. Share capital should be minimum
Rupees 15,00,000. These members should not be members of any other co-operative
banks. The promoters should not have been punished under the Indian Penal Code for any
criminal activity. They should not have been disqualified under the Maharashtra Co-
operative Societies Act, 1960. The proposal for collection of share capital and license to
conduct banking operations are routed through the Co-operation Department to the Reserve
Bank Of India (RBI). No proposal is cleared without the permission of the RBI.A joint
survey has to be undertaken by the Chief Promoter and an officer from the Co-operation
Department. The joint survey studies the feasibility of the proposed Bank.
These societies are in the sale and purchase of agricultural produce,
implements, fertilizers, seeds etc. These societies are formed at the Block
Level. They also undertake other consumer activities. Primary Agricultural
societies can become members of these Societies.
This is a sugarcane processing Society. The members have to be cane producers residing in
the area of operation. It also manufactures molasses and other bye products.It requires
industrial license from the Government of India.
Primary Dairy Societies
It is organized at the village level for collection of milk from members owning milky
cattle. There should be atleast fifty members in the society.A prior permission for
collection of milk from the members is required. This permission is granted by the District
Dairy Development Officer.
Other Livestock Societies
• These societies are formed to promote poultry, piggery etc.
• Minimum fifity members should be participating in the activity. They should be
able to certify availability of feed, medical facilities and conducive atmosphere for
• The project report should be certified by the District Animal Husbandry Officer
Lift Irrigation Societies
Atleast five members having cultivable land of 15 Hectares should join for application. The
project report will have to be sanctioned by NABARD, if financial assistance is to be
availed by the Society.If water is to be lifted from river, then permission of the Irrigation
Department, Govt. of Maharashtra will have to be acquired. In case the water is to lifted
from from well and other ground resources then certificate from the District Ground-Water
Survey Officer is necessary.
These societies are organized by members engaged in fishing activity. A certificate
regarding availability of fish from the Assistant Director of Fisheries is required.
• Minimum fifty handloom weavers should join the Society. They should have their
own working handloom or at least a token from a private handloom owner.
• The member should have sufficient space for production of handloom cloth or the
proposed society should have a shed for production of handloom cloth.
• The society should be in a position to supply yarn to the members and should have
adequate marketing facilities for the produce.
• Minimum ten powerloom owners/Texmark holders should join in formation of the
society. Members should themselves operate the powerlooms and should not own
more than four powerlooms and should have sufficient space for production of
• The society should have adequate facility for supplying yarn to the members as well
as marketing their produce. These societies can undertake production of cloth
varieties as permitted by Textile Commissioner.
Spinning Mills Societies
Only cotton producing farmers can become its members. License to operate a spinning mill
is required. This license is given by the Director - Handloom, Powerloom and Co-operative
The society should possess minimum five acres of land in industrial zone and atleast thirty
entrepreneurs should join in the proposed Industrial Estate. The proposed industrial estate
has to be given clearance by the District Industries Officer. A certificate regarding
availability of power, water from appropriate authorities is required.Minimum thirty
thousand Rupees have to be collected by the members as share capital
Minimum five hundred members have to join. They should collect a minimum share
capital of Rupees 25,000. 25% of these members have to be from the weaker sections of
the community. The proposed society should have adequate shopping space, situated in a
market within the area of operation.
• Members should hold a valid driving license or may be an automobile mechanic or
be an assistant to the driver.
• There have to be minimum ten members.
• The Chief Promoter should guarantee that sufficient work is available for the
vehicles of the Society. A certificate from financial institution is required certifying
the availability of finance for acquisition of vehicles.
These societies are in rural areas for distribution of electricity and collection of bills from
the farmers. Clearance from the State Electricity Board is required.
The societies not covered under the above categories fall under this type:
There are also other co-operatives like:
Other Processing Societies
Salary Earners Society) Coming under the Banking Regulation Act
Primary Co-operative Banks)
Salary Earners Society) Not Coming under the Banking Regulation Act
Other Urban Credit Societies
Other Industrial Societies
The Maharashtra State Co-operative Bank Ltd. ((State Level)
The District Central Co-operative Banks (District Level)
The Primary Agricultural Credit Co-operative Societies (Primary Level)
The Maharashtra State Co-operative Agriculture and Rural Development
District Level Branches
Taluka Level Branches
The Maharashtra State Co-operative Housing Finance Corporation Ltd.
The Maharashtra State Co-operative Marketing Federation Ltd. .((State
The District Cooperative Marketing Societies / The District Sale & Purchase
Cooperative Union (District Level)
District Multi-purpose Service Co-operatives
The Block Level Sale & Purchase Cooperative Union (Block Level)
The Maharashtra State Cotton Growers Marketing Federation
The Maharashtra Rajya Yantramag Kapad Kharedi Sangh Maryadit
The Maharashtra Rajya Hatmag Sahakari Sangh Maryadit((State Level)
The Handloom Weavers Cooperative Societies(Primary Level)
The Maharashtra State Co-operative Fisheries Federation Ltd. (State Level)
District Fisheries Co-operative Societies Federation (District Level)
Primary Fisheries Co-op Societies (Primary Level)
The Maharashtra State Co-operative Consumers Federation Ltd. ((State
Wholesale Consumer Co-operatives
Primary Consumer C-operatives (Primary Level)
The Maharashtra State Co-operative Union Ltd. ((State Level)
District Co-operative Board at District Level
The Maharashtra State Caderisation Co-operative Society Ltd. ((State
District Co-op Caderisation Society (District Level)
Block-Level Co-op Supervising Union (Primary Level)
The Maharashtra State Cotton Ginning Co-operative Processing Societies
Federation Ltd. ((State Level)
Primary Cotton Ginning & Pressing Co-op Societies (Primary Level)
The Maharashtra State Agricultural Produce Marketing Committees
Federation LTD. (State Level)
Agriculture Produce Market Committees (Primary Level)
The Maharashtra State Co-operative Spinning Mills Federation Ltd. (State
Co-operative Spinning Mills (Primary Level)
The Maharashtra Rajya Sahakari Sakhar Karkhana Sangh Maryadit (SL)
Co-operative Sugar Factories (Primary Level)
The Maharashtra State Forest Labourers Co-operative Societies Federation
District Level Forest Labourers Co-op Societies Federation (District Level)
Primary Forest Labour Contract Co-op Societies (Primary Level)
The Maharashtra State Labour Contract Co-operative Societies Federation
The District Labour Contract Co-operative Societies Federation (District
Primary Labour Contract Co-op Societies (Primary Level)
The Maharashtra State Co-operative Industrial Estate Federation Ltd((State
Industrial Co-op Estates (Primary Level)
The Maharashtra State Co-operative Oilseeds Growers Federation Ltd.
Primary Oilseeds Co-op Societies (Primary Level)
The Maharashtra State Co-operative Poultry Societies Federation (State
Primary Poultry Co-op Societies (Primary Level)
The Maharashtra State Co-operative Banks Association Ltd (State Level)
The Maharashtra State Urban Co-operative Banks Federation Ltd. (State
Urban Co-op Banks (Primary Level)
The Maharashtra State Co-operative Tribal Development Corporation Ltd.
( State Level)
Adivasi Service Societies (Primary Level)
The Maharashtra State Co-operative Dairy Societies Federation Ltd.( State
District Level/ Block Level Dairies Co-op Societies Federation (District
TAARAANGAN- THE SHINING EXAMPLES
This section deals with those co-operative societies whose exemplary work is no doubt, a
shining example before others. An example to be appreciated and emulated. These are the
societies, which have experimented, improvised and innovated- successfully. We salute
these examples, which embody the spirit of co-operation and progress.
1.The Pravaranagar Udhyog Samuha: (The Pravaranagar Rural
In 1951, the Pravaranagar Sugar Co-operative came into existence. The birth of this sugar
co-operative itself was a revolution of sorts not only in the Indian co-operative sector but
also the Asian region. This was the first sugar co-operative in Asia owned collectively by
farmers from the Ahmednagar region.This co-operative was organized by Dr.Vitthalrao
Vikhe-Patil and received guidance from Dr.Dhananjayrao Gadgil
, an eminent thinker in the co-operative philosophy.This co-operative sugar factory set an
example in the echelons of rural Maharashtra and inspired the formation of scores of other
sugar-co-operatives in Maharashtra. Thus it set a starting point for not only the farmers to
organize themselves but also the concept of rural leadership.
Today there are about 175 such sugar factories out of which 116 are operative and which
processed 50.19 million Metric Tonnes of sugarcane almost one-third of the sugar cane
processed in India!The pioneers did not stop only at sugar cane processing. Today the
Pravaranagar Sugar Co-operative (now named as Padmashree Dr Vitthalrao Vikhe-Patil
Co-op Sugar Factory Ltd.) has integrated various projects for optimal benefits to its
Watershed Management: Sugarcane requires water, the co-operative has undertaken
watershed management program so that water will be available to their members crops.
Modernization of Distillery: Has been undertaken for optimal production of spirit from
Water pollution control: This program is undertaken as responsibility towards the
environment. It controls pollution of river water where waste from the distillery is
The co-operative has diversified into a chemical plant and paper manufacturing plant.The
co-operative has also developed a host of other co-operatives ranging from those which
give loans for higher education t o local students, to workers credit society, to transporters
co-operative societies for transportation of sugarcane and also the Pravara Co-op Bank
.Thus this co-operative has developed itself with a definite long-term vision. Today it is a
successful embodiment of all the seven principles of co-operation. Its example is worth to
2.Warana Nagar :
WarnaNagar is a typical example of an all-round sustained development of a rural area.
The co-operative movement here successfully outlines the transformation of a traditional
rural society into an economic success story.The development started with the
establishment of a co-operative sugar factory in the year 1956. Though co-op sugar
factories are by no means a novelty now, they certainly were in those days. The sugarcane
grower members contributed to the area development fund which has been used in
undertaking various rural development projects like lift irrigation, construction of roads,
dairy development etc.. With the aid of good management practice and dedication as well
as a part of an astute vision led to the establishment of a poultry farm, which tied up with
MAFCO for marketing of eggs and chicks. Thus yet another profit centre was
established.This further led to the development of a huge dairy complex. Using effective
marketing skills and by adopting marketing techniques of the times like effective
advertising, this new project also attained success.
To give a human dimension to the success-story, Warana sugar Factory provided the initial
funds for the establishment for an Art, Science and Commerce college. This college not
only has provided education to the local youth but also has a positive ripple effect in
stopping the flow of rural youth to urban areas as well as making available trained
manpower for aiding the growth of the area.The Warananagar Children's Orchestra has
earned fame in the various parts of the country and the world, which shows that the efforts
of the rural leadership in developing younger generation in the areas of art and culture.
3. The Maharashtra State Co-operative Bank:
The Maharashtra State Co-operative Bank (MSC Bank) was originally registered as the
Bombay Urban Credit Society on 23.01.1906. The MSC Bank is playing the role of an
Apex Bank of the co-operative movement in the Maharashtra State since 1954. It has been
helping agricultural credit co-operatives, agricultural processing co-operatives etc.The
main object of the Bank is to “promote, propagate co-operative common-wealth in
Maharashtra State through socio-economic transformation by democratic means and co-
operative principles."Thus the MSC Bank provides re-finance facility to about 30 District
Central Co-operative Banks, which primarily cater to the needs of the agricultural sector in
The Bank also promotes finance to artisans; Agro-industrial co-operatives especially sugar
factories, spinning mills by providing medium term loans as well as interim loans.The
Bank has supported banking facilities to about 340 urban co-operative banks in the State by
providing credit limits. The Bank also sanctions working capital to the Urban banksThe
Bank thus has served the co-operative sector and has helped it to achieve sustained growth
over last nine decades.
The current position (1999) of the Bank is as follows:
(Rupees in Millions)
Share Capital 674.6
Reserve Fund 4725.7
Other Funds 2755.8
Loans & Advances 50431.7
Profit -3789.2 (mainly due to N.P.A. Provisions)
The Bank serves as a balancing center for the surplus resources of the co-operatives in the
State. Apart from being the biggest State co-operative bank it is also one of the top-ten
banks in India. Certainly it is shining example for all co-operatives
The Schemes of Progress
The Government while understanding the importance of co-operatives has introduced
several schemes for promoting the spirit of co-operation. Both the Indian Government as
well as the Government of the State of Maharashtra has introduced several schemes for the
co-operatives. A few of them are listed here.
Share Capital Contribution to Credit Institutions under LTO Fund (State Level Scheme):
The Government sanctions share capital contribution to District Central Co-operative
Banks. This contribution is given out of the LTO Fund of the NABARD. The provision is
made every year to repay this loan.
Loans to Co-operative Credit Institutions for conversion of short-term loans into medium
National Agricultural Credit Stabilization Fund (Centrally Sponsored Scheme):
In drought conditions the members of Agricultural Credit Societies may not be able to
repay the crop loans. This scheme helps to convert their short-term loans into medium term
loans and fresh crop loans are made available to the members.
Crop Production Incentive to Agriculturists (Dr.Punjabrao Deshmukh Crop Production
This scheme is applicable for Kharif and Rabbi crops taken from 1.4.90 onwards. The
farmers borrowing loans of RS.25, 000 or less and who repay their loans fully before the
due date are eligible for 4 % of the principal amount as an incentive.
In the industrial co-operative societies of weaker sections of the societies, the Government
has several schemes.
• The Government sanctions share capital in the ratio 1:3, to enable the societies to
borrow funds from the financial institutions.
• Financial Assistance for Tools and Equipment’s:
The Government sanctions loans up to RS. 23,000/- to the members of such societies as
50% loan and 50% subsidy, for the purchase of tools and adopting improved methods of
• Loans and subsidies for the construction of Godowns, workshops/ worksheds:
The government gives upto Rs. 75,000/- (75% loan and 25% subsidy) to the societies
for construction of worksheds or Godowns.
• Interest Subsidy for Working capital:
The government gives an interest subsidy upto 3.5% to 4.5% on the amount borrowed by
the co-operative. This scheme helps to reduce the burden of interest on the co-operative
society, which is to be paid to financial agencies.
• Block Level Village Artisans Multipurpose Co-operative societies: grant-in-aid :
Under the scheme of employment guarantee to the rural artisans composite loans for
Medium term are given from Rs 30,000/0 to Rs. 50,000/- per member.
Central Sector Scheme for Development of Women Co-operatives:
Under this scheme financial assistance would be provided by the Central Government on
100 % basis to the newly formed co-operative societies by the women as well as existing
women’s co-operatives. The financial assistance is as under
No. Item Share Capital Working Capital Subsidy Total
1.New Societies 40,000 40,000 20,000 1,00,000
2.District Federation 80,000 80,000 40,000 2,00,000
3.State Federation 2,00,000 2,00,000 1,00,000 5,00,000
Scheme 7: For Sugar Sector
• Grant of financial assistance to Scheduled Castes / Nav buddhas marginal farmers
for the purchase of shares of co-operative sugar factories:
Financial assistance is given to the above-mentioned categories of persons to acquire share
in sugar factories. These loans are in terms of 50% interest free loans and 50 % subsidy.
• Financial aid for purchase of Shares in Sugar factories to Adivasis
• Grant-in- Aid to sugar factories for road construction works in sugar factories:
Assistance to the tune of Rs 3/- per tonne of sugarcane crushed is given to the sugar co-ops
for construction of roads.
• Grant of loans to financially weak and sick co-op sugar factories for rehabilitation
• Share Capital Contribution in co-op Sugar factories (NCDC) :
NCDC sanctions upto 50 % of Government Share capital in developed areas and 65 % of
the Government share capital in non- developed areas.
Scheme 8 : Co-operative Godowns :
The Warehousing Corporation provides 90% assistance for the construction of Godown
out of which 50% is loan and 40% is Government share capital.
PROBLEMS OF CO-OPERATIVES IN MAHARASHTRA AND
THEIR REMEDIAL MEASURES
• POOR PERFORMANCE AND LOSS OF FINANCIAL VIABILITY
REMEDY: Co-operatives will need to explore other non- conventional avenues for
raising resources needed for modernizing their operations and meeting their working
capital requirement. Issue of non-voting shares and borrowing from the financial
institutions and the public are two such avenues. Also, there is a need for reforms in the
co-operative law to eliminate the inherent weakness of the financial structure of co-
operatives. Co- operatives will also need to be redesigned and re – engineered in terms
of their organizational structure, bye – laws, rules, regulations, operating procedures
• LACK OF PROFESSIONALISM IN MANAGEMENT
REMEDY: Reorienting and equipping the existing institutes of co – operative
management and junior level training centres for training barefoot managers. National
level management institutes like Vaikunth Mehta Institute of co- operative
management, Pune cold help in developing appropriate curriculum for the purpose of
training teachers/ trainers and preparation of appropriate teaching and training
• EXCESSIVE GOVERNMENT CONTROL AND POLITICAL
REMEDY: Co-operatives need to be provided a level playing field to withstand the
growing competition in the new era. India’s leading co-operators like Dr. Verghese Kurien,
L.C.jain and Mohan Dharia argue that it is only private companies that are reaping the
benefits of liberalization, thanks to the corporate friendly government that has modified the
existing legislation, administrative and financial rules and procedures, with a speed
unprecedented in India’s recent history to remove various controls on the corporate sector.
• POOR BOARD MANAGEMENT RELATIONS
REMEDY: The most important task of the board of directors of a co – operative is the
appointment, direction and monitoring of its managers, and if necessary , their dismissal
and replacement. If the board is not willing or is not able to do this job, the co-operative is
doomed to failure or at best it becomes manager-controlled and therefore subservient to the
• LACK OF PERPORMANCE BASED REWARD SYSTEMS AND POOR
REMEDY: Co-operatives need to start learning the value of its human resources. It
needs to understand the importance of its members and managers. There is a vital need
of good human resource (HR) practices and better work environment to get better
results from the people.
Better amenities and open and free environment in the work place will help deliver
Shri Mahila Griha Udyog, the makers of the famous Lijjat Papad, is an organisation
which symbolises the strength of a woman. All the women members are jointly the owners
of the organisation and are fondly referred to as 'sisters'. There is a central managing
committee of 21 members to manage the affairs of the organisation.
The organisation is wide-spread, with it's Central Office at Mumbai and it's 60
centers and 40 divisions in different states all over India. The organisation started of with a
paltry sum of Rs.80 and has achieved sales of over Rs.300 crores with exports exceeding
Rs. 12 crs.
Membership has also expanded from an initial number of 7 sisters from one
building to over 40,000 sisters throughout India. The organisation functions on the basis of
AN OVERVIEW OF THE HISTORY:
It all began on 15th march. 1959 which was a warm summer day with the sun
shining brightly in the cloudless sky. A majority of the women inhabitants of an old
residential building in Girgaum (a thickly populated area of South Bombay), were busy
attending their usual domestic chores.
A few of them, seven to be exact, gathered on the terrace of the building and started
a small inconspicuous function. The function ended shortly, the result - production of 4
packets of Papads and a firm resolves to continue production. This pioneer batch of 7
ladies had set the ball rolling.
As the days went by, the additions to this initial group of 7 was ever-increasing.
The institution began to grow.
The early days were not so easy. The institution has its trials and tribulation. The
faith and patience of the members were put to test on several occasion - they had no money
and started on a borrowed sum of Rs. 80/-.
Self-reliance was the policy and no monetary help was to be sought (not even
voluntarily offered donations). So work started on commercial footing.
The success of the organisation stems from the efforts of it's member sisters who
have withstood several hardships with unshakable belief in 'the strength of a woman'. The
organisation functions on the basis of consensus.
With quality consciousness as the principle that guided production, Lijjat grew to
be the flourishing and successful organisation that it is today.
CORE VALUES :
Shri Mahila Griha Udyog Lijjat Papad is synthesis of three different concepts, namely
(1) The concept of Business
(2) The concept of family
(3) The concept of Devotion
All these concept are completely and uniformly followed in this institution. As a
result of this synthesis, a peculiar Lijjat way of thinking has developed therein.
The institution has adopted the concept of business from the very beginning. All its
dealings are carried out on a sound, pragmatic and commercial footing - Production of
quality goods and at reasonable prices. It has never and nor will it in the future, accept any
charity, donation, gift or grant from any quarter. On the contrary, the member sisters
donate collectively for good causes from time to time according to their capacity.
Besides the concept of business, the institution along with all it's member sisters
have adopted the concept of mutual family affection, concern and trust. All affairs of the
institution are dealt in a manner similar to that of a family carrying out its own daily
But the most important concept adopted by the institution is the concept of
devotion. For the member sisters, employees and well wishers, the institution is never
merely a place to earn one's livelihood - It is a place of worship to devote one's energy not
for his or her own benefits but for the benefit of all. In this institution work is worship. The
institution is open for everybody who has faith in its basis concepts.
Shri Mahila Griha Udyog manufactures various products from Papad, Khakhra,
Appalam, Masala, Vadi, Gehu Atta, Bakery Products & Chapati.
It also produces/manufactures SASA Detergent Powder, SASA Detergent Cake
(Tikia), SASA Nilam Detergent Powder, SASA Liquid Detergent.
Shri Mahila Griha Udyog has diversified its various activities. Besides it's world famous
papads, it also currently has -
A Flour division at Vashi (Mumbai) where flour is milled from Udad Dal and
A Masala Division at cotton Green(along with a Quality Control Laboratory) at the
same place where different kinds of spice powders like Turmeric, Chillies,
Coriander and ready mix masala and like Garam masala, Tea masala, Pav-Bhaji
masala, Punjabi Chole Masala etc. are prepared and packed in consumer packs.
A Printing Division also at the same place.
Lijjat Advertising Services at Girgaum (Mumbai).
A Khakra Division at Buhari (Dist-Valod).
An Export division at Wadala.
Chapati divisions at Mumbai.
A Polypropylene set-up at Kashi-Mira Road.
A Vadi producing factory at Valod.
A Bakery division at Valod.
A Detergent Powder and Cakes manufacturing unit at Dahisar and office at Borivali
Six Office - Bearers
1. Smt. Jyoti J. Naik - President
2. Smt. Kamal D. Dhandore - Vice-President
3. Smt. Sunanda R. Belnekar - Secretary
4. Smt. Gangavati H. Naik - Secretary
5. Smt. Priyanka G. Redkar - Treasurer
Co-operative sector in Maharashtra is still an underdeveloped one. Under the five Year
Plans, a number of co-operatives have been setup keeping in view socio-economic goals.
With support from the government, many well managed, large sized, modern co-
operatives are likely to grow in near future. In particular, the introduction and application
of modern principles of management is very much needed in an organization. In view of
the size of investment, the number of people engaged in organizations, skills necessary
for decision- making in production and marketing operations, co-operatives would have
to take recourse to professionalized management as adopted by organizations in other
The main cause of the failure of co-operatives in Maharashtra, while considering their
working is mainly due to lack of proper management. There is lack of sincerity and
dedication among the members and many are not bothered about the functioning of the
organization. They lack the business principles and professionalism which has led to the
present chaos in this sector.
It is to be noted that co-operatives can function, even if the stringent policies of
professional management are not practiced. But, if the management approach is
inculcated in the co-operatives functioning, they can be successful like amul, Lijjat, Apna
Bazar etc. All these co-operatives prove that people can make a difference, if the proper
policies and principles are laid down.