BANKING TRADE AND COMMERCE

CO-OPERATIVE MOVEMENT

Co-operative Movement.—The co-operative movement was started in India as a result of the economic distress caused to peasants during the latter part of the 19th century. The idea of forming co-operative society to solve the problem of rural indebtedness was first suggested by Fredrick Nicholson in his Report of 1895—97. The Famine Commission of 1901 also stressed the necessity of starting credit societies in India on a co-operative basis. A real beginning of the Co-operative movement was, however, made when the Co-operative Credit Societies Act of 1904 was passed. The object of this Act was to encourage thrift, self-help and co-operation amongst agriculturists, artisans and persons of limited means. Societies formed under the Act were given legal status and were authorised to raise funds and carry on business in a corporate capacity. They were classified as rural and urban; rural societies were bound to accept the principle of unlimited liability while urban bodies were given a free choice of limited or unlimited liability. This Act, however, was deficient in many respects. The Act of 1912 was, therefore, passed to eliminate the defects in the earlier Act. It regularised certain practices of doubtful legal validity and made provision for further expansion under proper safeguards. The distinction between rural and urban societies was abolished and a more scientific classification based on the nature of the availability of members whether limited or unlimited, was adopted. Co-operative societies other than credit societies were allowed to be formed. Registration of unions and federal bodies like central banks was expressly legalised and a number of minor improvements were introduced. The simplicity and the elasticity of the old Act were at the same time preserved and a wide rule-making power was left to the provinces to enable them to develop on their own lines.

The War and the post-War period witnessed a considerable progress in the number of societies, their resources and their coverage. In particular, there was a vigorous growth of consumers co-operatives when the Government decided to appoint cooperative societies as agents for distribution of food-grains and other necessities.

The co-operatives played a vital role after Independence. The rise in prices improved the paying capacity of agriculturists. This had a favourable effect on the position of co-operative societies.

During the second five-year plan period (1956 to 1961) the development of the co-operative movement was given special emphasis with the guiding principles incorporated in the Rural Credit Survey Report. The principles were:—-

(1) State partnership at all levels,

(2) Linking of credit with marketing,

(3) Education and propaganda in the theory and practice of co-operation.

In the following pages is given the structure and progress of the various co-operative societies in the district. The co-operative movement in the district covers—(1) agricultural co-operative credit societies. (2) multipurpose societies, (3) primary land mortgage banks, (4) non-agricultural credit societies, and (5) the district central co-operative bank.

Agricultural Credit Societies: The number and membership of agricultural credit societies increased at a rapid pace during the second plan period. The position of agricultural credit societies in 1957-58, 1960-61 and 1965-66 was as under: —

The average membership per primary society in the district is 100 against the average of 96 for the State of Maharashtra.

Total owned funds, share capital plus reserve funds) of the primary agricultural credit societies in the district amounted, in 1960-61, to Rs. 38.93 lakhs and formed 21.77 per cent of their working capital as against 26 per cent for Maharashtra.

The loan operations of all the primary agricultural credit societies in the district amounted to Rs. 124.37 lakhs in 1960-61. The average amount of loan per borrowing member worked out to Rs. 326 in the district as against Rs. 329 for Maharashtra. These societies paid advances to the members in 1965-66 to the tune of Rs. 3,55,26,328.

During the period from 1958 to 1961, the number of agricultural credit societies increased by nearly 10 per cent and their membership by 72 per cent. There was an addition of Rs. 42,93,863 in 1965-66 as against 1961 in the share capital and the working capital increased from Rs. 78 lakhs in 1957-58 to Rs. 2,17,21,131 lakhs in 1960-61 and Rs. 5,46,82,821 in 1965-66. There was also an increase of Rs. 2,58,85,729 in the amount advanced by the societies in 1965-66 over the amount advanced in 1960-61. Although the pace of recoveries improved slightly, the proportion of overdues to the outstanding loans in 1965-66 (25 per cent) was significantly high. This points out the need of improving the recoveries. A major shift in the consideration for advancing loans was made recently. Now the credit worthiness of the agriculturist members and the crops grown by them are given weight instead of the value of land possessed by them.

Besides the financial activities, good progress was also made by agricultural credit societies in the sphere of services to agriculturists such as distribution of agricultural requisites (like seeds, manure, etc.), marketing of agricultural produce, etc.

Central Co-operative Bank: " There were 4 separate Central Co-operative Banks operating in the district. These four Banks at—(1) Buldhana, (2) Khamgaon, (3) Malkapur and (4) Mehkar were amalgamated into one Bank called the Buldhana District Central Co-operative Bank Ltd. with headquarters at Buldhana, on 26th January 1962. The Amalgamated Bank has been working as a federal financing agency catering for the credit requirements of all the primary credit societies in the district. Since 1962, the Zilla Parishad also transacts its financial business through this Bank." [Source—District Census Hand-book, Buldhana, 1961.]

Some of the main objectives of this bank may be stated below. They are,—(1) to supply credit facilities to the co-operative institutions, (2) to increase the banking habits of the rural and urban people, (3) to work as a federal bank for the large amount required by co-operative institutions, and (4) to spread the co-operative movement in backward area.

There are 27 branches of this bank in the district, Branches are opened to facilitate the money transactions of the agriculturists. All the villages in the district come within a radius of 10 to 15 miles from the offices of these branches. These banks also accept electric bills and Insurance premiums.

Progress made by this bank since 26th January 1962 is given in the following table: —

TABLE No. 1

WORKING OF THE BULDHANA DISTRICT CENTRAL CO-OPERATIVE BANK, BULDHANA.

This bank is in the forefront in regard to the spread of co-operative movement in the district, and it takes a prominent part in implementing new schemes according to the policy of State Government. The bank has given loans to dairy societies and press co-operatives, while a sugar factory is being established with the help of this bank at Sindkhedraja.

Purchase and Sales Societies: There are 13 primary purchase and sale societies in the district. All these units are managed at the district level by a single office. The particulars in brief of all these Societies are given in the following statement:—

One of the notable features of these societies is that they have taken up the important work of distributing seeds, manures, etc., to the agriculturists.

The value of purchase and sales by these societies amounted to Rs. 96.82 lakhs and Rs. 94.19 lakhs, respectively, in the year 1968. The working of the societies received impetus only at the close of the decade and they have now undertaken activities, such as, sale of agricultural produce of the members on commission basis, advance of loan on pledge of produce, etc. With the introduction of the scheme of linking credit with marketing, the societies get marketing finance from the central financing agencies. With a view to giving fair returns to their agriculturist members of the societies have undertaken pooling of cotton produce of their members. Their handling of this new function is marked with remarkable success.

Industrial Societies: There are seven weavers societies and 44 other industrial societies in the district. Of the seven weavers societies, six are hand-loom weavers' societies and one wool weavers' society. Their combined membership was 47 in the year 1965-66. The share capital amounted to Rs. 57 thousand and working capital amounted to Rs. 542 thousand in the year 1965-66. The combined reserve fund of these societies amounted to Rs. 40,000, Rs. 53,000 and Rs. 57,000 in the years 1961-62, 1964-65 and 1965-66, respectively. The value of the goods produced by the societies during the year 1965-66 amounted to Rs. 5 lakhs.

The other types of industrial societies include five oil ghanis, two cane and bamboo workers, 15 leather working, six carpentry and smithy, one metal working, four pottery and brick-making, seven miscellaneous, etc. Their combined membership is 705, share capital Rs. 50 thousand and working capital Rs. 1.27 lakhs. The value of production of these societies was Rs. 1.10 lakhs and sales value Rs. 91 thousand in the year 1965-66.

District Co-operative Board: Education and training in co-operation and propaganda for the spread of co-operative movement are carried out by the District Co-operative Board under the guidance of Maharashtra State Co-operative Union, Ltd., Bombay. The membership of the Board is of two classes, viz., ordinary consisting of all co-operative societies in the district and associate, consisting of individuals. A nominee of the financing agency (The Buldhana District Central Co-operative Bank Ltd., Buldhana), the District Deputy Registrar and Executive Officer of the Maharashtra State Co-operative Union are ex-officio members of the Board. It has a membership of 47. There are three instructors in this district, who are appointed by the Maharashtra State Co-operative Board, for training and propaganda. Out of these three instructors, one works as the Secretary of the Board. This Board conducts a course for the Secretaries and a course for the members of the Managing Committee. During the year 1967-68, 688 persons were trained by this institution.

District Co-operative Marketing Society: The District Co-operative Marketing Society works as a federation of 13 Black Sale and Purchase Societies. The marketing societies arrange for the supply of agricultural implements, fertilizers, etc., and also for the sell of agricultural produce of their members. The Vidarbha Co-operative Marketing Society, Nagpur is an apex non-credit society having jurisdiction over the whole of Vidarbha region. It pools the produce from the cotton growing region through sale and purchase societies affiliated to it and also undertakes marketing of agricultural produce.

Service Co-operatives: The number of members of service cooperatives in this district stood at 582 (including 509 Gram Sewa, 41 Multipurpose Societies and 32 Primary Credit Societies) as on 30-6-1968. The Government granted financial assistance during 1967-68 for the following purposes:—

Almost all of these societies are engaged in the distribution of food-grains, fertilizers and improved seeds, etc.

Fisheries Societies: There are five fisheries societies in this district. The Government has contributed Rs. 7,000 towards the share capital of these societies. They sold fishes valued of Rs. 1.422 during the year 1967-68.

Processing Societies: There are five Cotton Ginning and Pressing Societies and two Co-operative Oil Mills in the district. The Government has contributed towards their share capital a sum of Rs. 2,36,300 and Rs 20,300, respectively. During the year 1967-68, a total quantity of 50,127 quintals of cotton was processed by the Ginning and Pressing Societies.

Housing Societies: There are 56 Housing Societies in the district wbich are grouped as under:—

Consumers Stores: In the district, there were 31 consumers stores by the end of June 1968. The Government has contributed a sum of Rs. 1,09,000 towards the share capital of these consumers stores. Their activities are mostly confined to running fair price shops.

Co-operative Farming Societies: There are 33 co-operative farming societies including 5 joint farming societies in the district. There are two posts of Extension Officers (Agriculture) for giving technical guidance to these societies. The Buldhana District Central Co-operative Bank extends financial assistance to these societies. These societies command, in aggregate, an area of 3,897 hectares. The Government has contributed Rs. 47,500 towards their share capital.

Lift Irrigation Co-operative Societies: There are four lift irrigation societies in this district. Out of these four societies, the construction work of the Raheri Lift Irrigation Society and Mhais-wadi Lift Irrigation Society is likely to be completed and construction of the remaining two societies is in progress. The total area covered by these societies amounts to 1,490 hectares.

Raheri Lift Irrigation Co-operative Society: The Society has been granted a Government loan amounting to Rs. 77,000 and a subsidy of Rs. 38,500 so far. The amount sanctioned covers the cost of the scheme. The civil, mechanical and electrical work has been completed except for the pipe line which is also expected to be completed shortly.

Co-operative Lift Irrigation Scheme, Kund Bk.: The society has completed the civil work of the scheme and has utilised a sum of Rs. 1,17,188 for the same. The entire cost of the Scheme amounting to Rs. 1,17,200 has been sanctioned by way of Government loan. The work of erection of machinery is in progress.

Co-operative Lift Irrigation Society, Mhaiswadi: The entire cost of the work of the society has been sanctioned amounting to Rs. 1,52,605 by way of Government loan. The society is expected to commence its work very soon.

Co-operative Lift Irrigation Society, Chincholi: The society was registered on 15-6-1967. A loan of Rs. 2,65,300 has been sanctioned to it by the Buldhana District Co-operative Primary Land Development Bank. Out of the sanctioned loan, a sum of Rs. 98,258 has already been utilised by the society on the commencement of the civil work under tbe scheme.

Labour Contract Societies: The scheme was started in the year 1961 and one labour contract co-operative society was registered in the district. There are now four labour contract co-operative societies in this district out of which one is defunct. The remaining three societies are functioning. The information in respect of membership, share capital and reserve fund of the above societies during the year 1967-68 is given below: —

The above labour contract societies received Government assistance as given below:—

The labour contract co-operative societies however do not get regular contracts and hence they cannot provide regular work to their members. They also do not receive any financial help from the central financing agency which creates difficulties for them in balancing their budget.

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