BANKING TRADE AND COMMERCE

CO-OPERATIVE MOVEMENT

The co-operative movement was started in India during the first half of the present century. It was mainly the result of efforts to relieve the economically distressed people, mostly the peasants. Although Frederik Nicholson first thought of a co-operative movement as a means to solve the problem of rural indebtedness, a real beginning of the movement is marked from 1904 when the Co-operative Societies Act was passed to encourage thrift, self-help and Co-operation amongst agriculturists, ' artisans and persons of limited means. Societies established under this Act were declared as legal and were authorised to raise funds and carry on business in a corporate capacity. In 1912, another Act was passed to make good the deficiencies of the old Act. It removed the rural-urban classification of the old Act and adopted a more scientific classification based on the nature of the availability of members. It also allowed the formation of societies other than credit societies and explicitly legalised the registration of unions and federal bodies.

The co-operative movement began in this district on 21st October 1912 with the registration of the District Central Co-operative Bank at Wardha. The movement later on spread throughout the district. By 30th June 1958 there were 391 co-operative societies of different types working in the district. Within a decade from 1958 to 1968 their number increased almost two-fold. Thus by the end of 1968, there were 798 co-operative societies working in the district. The following table gives the total strength of the different types of societies working in the district.

TABLE No. 3

TOTAL STRENGTH OF DIFFERENT TYPES OF CO-OPERATIVE SOCIETIES WORKING IN WARDHA DISTRICT, 1968.

Agricultural Co-operative Credit Societies.

Of the various types of co-operative societies the Agricultural Co- operative Credit Societies are the most important since they are spread far and wide and over almost all the villages in the district. Before 1959 the main function of these societies was to cater to the essential credit needs of cultivators in the area of their operation. But there were a number of other requirements with which the cultivator was faced. The Government, therefore, decided to convert these credit institutions into multipurpose or seva societies. The seva societies have thus become viable and economically sound units at village level. They perform multifarious activities including supply of seeds and manures, distribution of foodgrains, supply of domestic requirements such as foodgrain, cloth, etc. and supply of agricultural implements. Their main function, however, is to advance short-term and medium-term loans (not exceeding five years) to farmers for agricultural purpose. By June 30th, 1958 the agricultural co-operative credit societies numbered 374 and covered 709 out of 972 villages in the district. The rest of the villages were covered, by the multipurpose or seva societies and primaries. The following table shows the working of the agricultural co-operative credit societies from 1962-63 to 1966-67.

TABLE No. 4

WORKING OF THE AGRICULTURAL CO-OPERATIVE CREDIT SOCIETIES IN WARDHA DISTRICT FROM 1962-63 TO 1966-67.

(Rs. in thousands.)

District Central Co-operative Bank.

The above societies served 53 per cent of the rural population and 77 per cent of the agricultural population in the district till 30th June 1968.

The District Central Co-operative Bank, Wardha, which was established at Wardha on the 21st October 1912, marks the beginning of the cooperative movement in Wardha district. It is the central financing agency for the primary co-operative credit societies in the district. The liability of the members of this bank is limited and its membership consists of both co-operative societies and individuals.

The District Central Co-operative Bank undertakes all banking business i.e., collection and discounting of bills, opening of current accounts, purchase and sale of securities and issue of cheques and drafts, etc. In places where multipurpose societies or sale societies cannot be organised or worked successfully, the Central Bank is advised to make arrangement for the sale of agricultural produce, particularly of agriculturists who come within the purview of the Bombay Agricultural Debtor's Relief Act and who are allowed to become nominal members for obtaining crop finance.

In 1970 the District Central Co-operative Bank at Wardha had 11 branches of which 6 were in Wardha, three in Arvi and two in Hinganghat tahsils.[These branches were situated at Arvi, Ashti, Deoli, Hinganghat, Kharangna, Pul-gaon, Samudrapur,Seloo,Sindi and Wardha.] Its total membership was 654 during the year. The following statistics give in brief the working of the bank during the past few years.

TABLE No. 5

STATISTICS AND WORKING OF THE DISTRICT CENTRAL CO-OPERATIVE BANK, WARDHA.

(Rs. in lakhs.)

Land Development Bank.

The Land Development Bank was originally started as the Land Mortgage Bank. It was specially organised and equipped to perform the essential function of supplying long-term credit to the cultivator. The bank grants loans on the security of the landed property offered by the borrowers. Loans are given up to 50 per cent of the value of immovable property mortgaged with the bank. The repayment of the loan is permitted either on equated or equal instalment system fixed on the basis of the net repaying capacity of the borrower and the average rental value of the mortgaged property of the borrower and is spread over a maximum period of twenty years. The main purposes for which loans are advanced are (i) redemption of old debts, (ii) improvement of agricultural land and the adoption of improved methods of cultivation, (iii) installation or the purchase of agricultural/machinery, and (iv) the reclamation of waste and fallow lands by tenant cultivators. Generally, the long-term loan (i.e., between 5 and 10 years) is given against the security of land, whereas loans for short period are advanced even against the security of standing crops.

The rate of interest for long-term loans was 5 per cent per annum in 1958. It was raised to 7 per cent in 1965 except for the loans advanced for construction of wells, in which case it was 4½ per cent.

By 1965-66 there was only one Land Development Bank in the district with a membership of 9850. It had four branches, two at Wardha and one each at Arvi and Hinganghat. The following table gives the details of the working of the bank during the past few years.

TABLE No. 6

WORKING OF THE LAND DEVELOPMENT BANK, IN WARDHA DISTRICT
FROM 1961-62 TO 1965-66.

(Figures of Rs. in Lakhs).

The position of the bank on 30th June 1967 was as follows.—

(Figures of Rs. in thousands)

Non-Agricultural Co-operative Societies.

These societies are formed generally by traders, factory workers, salary-earners, etc, for supplying credit to their members. They are mostly found in towns or urban areas, and include salary-earners' societies, urban banks, etc.

The societies raise their capital by issuing shares, accepting deposits on current savings and fixed accounts and borrowings from the Central Financing Agency.

The societies mainly advance loans to their members on personal security, mortgage of property or on the security of valuables pledged and produce hypothecated. They allow cash credits and sanction overdrafts on any of the securities mentioned above. They also undertake modern banking operations like issue of hundis and drafts and collection of cheques, hundis, drafts, etc.

By 1967 there were 18 non-agricultural co-operative societies working in the district. Of these, 13 were in Wardha, 3 in Arvi and 2 in Hinganghat. The following table shows the progress made by these societies during the past few years.

TABLE No. 7

STATISTICS OF THE NON-AGRICULTURAL CO-OPERATIVE CREDIT SOCIETIES IN WARDHA DISTRICT.

Primary Purchase and Sale Societies.

These societies are formed to help agriculturists get fair prices for their produce and supply them goods such as cement sheets, manure, cloth, etc. which are required for agricultural and domestic purposes.

By 30th June 1967, there were 7 Purchase and Sale Co-operative Societies in this district of which three were at Wardha, two at Arvi and two at Hinganghat. The total number of members belonging to these societies was 1,969 during the same year. The details of the progress made by these societies during the same year are given in the table below.

TABLE No. 8.

WORKING OF PURCHASE AND SALE SOCIETIES IN WARDHA DISTRICT

(Figures of Rs. in lakhs).

The Government has selected Wardha district for bringing about an intensive development of labourers and workers co-operative societies.

A labourers' and workers' co-operative society has accordingly been established at every marketing centre in the district. By June 1967, there were 38 co-operative societies of this type working in the district at different marketing centres. Besides, there were 30 societies including two electrical societies for other areas in the district. The following table gives the statistics about these societies from 1961-62 to 1965-66.

TABLE No. 9.

STATISTICS AND WORKING OF THE LABOURERS' AND WORKMEN'S CO-OPERATIVE SOCIETIES IN WARDHA DISTRICT.

(Figures of Rs. in lakhs).

Processing Societies.

The Processing societies are important in that they break the monopoly of private firms and individuals in regard to the processing of agricultu ral produce. As a result, they not only earn better profits for themselves but also establish a co-operative link between the factors of production and distribution thereof. The State encourages the formation of cooperative societies and offers incentives for undertaking more and more processing work. The processing societies in this district have been formed only in the field of cotton ginning and pressing and Dal milling. By 1966 there were seven cotton ginning and pressing societies working in the district. They had 1415 members and during this period their capital from all sources amounted to Rs. 5.78 lakhs. The value of the cotton ginned and processed by them came to Rs. 25.818 lakhs. The progress and working of these societies is shown in the table below:—

TABLE No. 10.

WORKING AND PROGRESS OF THE CO-OPERATIVE GINNING AND PRESSING SOCIETIES IN WARDHA DISTRICT.

Other Processing Societies.

By 1966-67 there was only one co-operative processing society working in the district viz., the co-operative Dal mill. The membership of the mill increased from 63 in 1963-64 to 142 in 1965-66 and its working capital from Rs. 11,616 in 1963-64 to Rs. 37,000 in 1965-66.

Co-operative Farming Societies.

The idea of organising co-operative farming societies was first thought of in 1946-47 to rehabilitate ex-soldiers and to decide the allied land- tenure and land utilisation problems. The main object behind their organisation is to increase agricultural production, create opportunities for gainful employment and rehabilitate landless labour on Government land. Through farming societies can also be achieved consolidation of scattered and fragmented holdings and improvement of fallow and waste lands. This is done by soil conservation, reclamation and development of land.

Of the co-operative farming societies only two categories had developed in the district by 1964-65 viz., the joint farming societies and the collective farming societies. In the following year, however, only one of the above two viz, collective fanning societies operated in the district. The following table gives the details of the co-operative farming societies in the district.

TABLE No. 11.

STATISTICS AND WORKING OF THE CO-OPERATIVE FARMING SOCIETIES IN
WARDHA DISTRICT.

By 1967 there were 20 co-operative farming societies in this district. Of these 18 belonged to the category of joint farming and two to collective farming. Together these societies had a membership of 231. Their share capital during that year was Rs. 62,000 of which Rs. 39,000 represented government capital and Rs. 3,61,000 working capital. The societies had occupied an area of 1908 acres out of which the area under production was only 1730 acres. The total value of production during the same year amounted to Rs. 2,00,000. Some societies earned a profit of Rs. 25,000, while others sustained a loss of Rs. 7,000.

Dairy societies.

The importance of co-operative dairy societies can hardly be exag- gerated. The dairies not only bring about distribution of the supply of milk but also help the owners of cattle get fair price for the products, especially milk. Dairies, however, serve as a subsidiary means of livelihood to a number of agriculturists.

By 1967 there were in this district 48 co-operative primary dairy societies. Of these societies 25 were at Wardha, 20 at Arvi and 3 at Hinganghat with a membership of 360, 363 and 92, respectively. The details of the working of these societies are given below:—

TABLE No. 12.

STATISTICS REGARDING THE WORKING OF THE DAIRY SOCIETIES IN WARDHA DISTRICT.

(Rs. in lakhs).

Co-operative Fisheries Societies.

Like milk, fish too, forms a subsidiary diet for the people. As Wardha  is not a coastal district there is little scope for carrying out fisheries development here. Whatever fish can be collected comes mainly from the inland water surfaces. There is a proposal for storage as well as for the purchase and sale of fish in the district. The Government extends help to form fisheries societies on co-operative lines to bring about development of fisheries in the district. The following table gives the details of the cooperative fisheries societies in the district in 1966-67.

TABLE No. 13.

WORKING OF THE CO-OPERATIVE FISHERIES SOCIETIES
IN WARDHA DISTRICT, 1966-67.

(Rs. in thousands).

Cattle Breeding Societies.

There was only one cattle-breeding society in Wardha district by 1967 with a membership of 60. All the members are from Hinganghat tahsil only. The society had a share capital of Rs. 2,27,000 and an equal amount as working capital.

Industrial Co-operatives

Except three textile mills and two oil mills there are no other large industrial units in the district. Agriculture is the main occupation in the district. The non-agricultural employment leans towards village and cottage industries. In 1968 there were co-operative societies in different industries like handloom, oil ghanis, carpentry, bamboo works, bidi production, patravali production, brick manufacturing, and neera production. The types of these societies and their number are given below:—

*Patravali.—A trencher or plate formed of leaves tacked together.

The working of the weavers societies for the year 1967 is given in the following table.

TABLE No. 14.

WEAVERS CO-OPERATIVE SOCIETIES IN WARDHA DISTRICT IN 1967.

(Rs. in thousands.)

Co-operative Housing Societies.

The exodus of population from villages to towns and cities in search of the means of living has added to the pressure of population which has been mounting from year to year due to increase in the birth-rate. This has created the problem of housing all over the country. The problem is more acute in cities and towns than in villages. The demand for houses is also due to the people's preference for new and better houses. The State proposes to solve this problem by encouraging the formation of co-operative housing societies and extending them financial assistance through loans and subsidies.

In Wardha district, which is not much industrialised, the problem of housing is not acute. It is felt mostly in towns and the tahsil headquarters. By 1967 there were 44 co-operative housing societies established in the district. Out of these, 22 were from Wardha tahsil, six from Arvi and 16 from Hinganghat tahsils. The following table gives the details of the housing societies in the district in 1967.

TABLE No. 15.

WORKING OF THE CO-OPERATIVE HOUSING SOCIETIES
IN WARDHA DISTRICT IN 1967.

The number of housing societies as well as their activities from 1961-1962 to 1965-66 are given in the statement below:—

Consumers' Co-operative Societies

Among the other types of co-operative societies the consumers' co-ope-ratives play an important part. The necessity of forming such societies was felt during the Second World War when the supply of essential commodities became scarce and their prices began rising. The consumers co-operatives help the proper distribution of their goods to consumers at reasonable prices. They are thus very much useful to hold the price line in times of inflation. The co-operative stores are run by consumers themselves almost on non-profit basis.

The following table gives the details of these societies from 1961-62.

TABLE No. 16.

WORKING OF THE CONSUMERS' CO-OPERATIVES IN WARDHA DISTRICT FROM 1961-62 TO 1965-66.

(Rs. in lakhs).

Forest Labourers Societies.

The forest labourers societies form an important group of the industrial co-operatives in the district. By 1967 there were in the district 12 forest labourers co-operative societies of which two were in Wardha tahsil, 9 in Arvi and one in Hinganghat tahsil. Their membership increased from 571 in 1967 to 676 in 1968. The share capital amounted to Rs. 47,000, of which the Government's share alone came to Rs. 30,000. The working capital of the societies during the year was Rs. 73,000. The total value of the work which the societies carried out came to Rs. 10,16,000, and their profits amounted to Rs. 69,000.

Co-operative Presses.

There were three co-operative presses in Wardha district by 1967. Of these, two were at Wardha proper and one at Arvi. Their membership was 104 (84 and 20, respectively) during the same year; it was 106 in the year 1966. The societies together had Rs. 36,000 as share capital including the Government's share of Rs. 10,000 and Rs. 1,00,000 as working capital. The societies earned profits to the tune of Rs. 5,000.

Other Industrial Co-operatives.

Besides the industrial co-operatives mentioned above there were 49 other societies of industrial workers. They included 33 from Wardha, 9 from Arvi and 7 from Hinganghat tahsils. The following table gives their details for the year 1966-67.

TABLE No. 17.

STATISTICS REGARDING INDUSTRIAL CO-OPERATIVES IN WARDHA DISTRICT.

Co-operative Motor Transport Sotieties.

By 1967 there were only two co-operative motor transport societies in the district. They had 117 members and their share capital and working capital amounted to Rs. 8,000 and Rs. 44,000, respectively.

Electricity Co-operative societies.

Similarly, there were two electricity workers societies. They had 82 members by 1967 and their share capital and working capital amounted to Rs. 4,000 and Rs. 6,000, respectively.

District Co-operative Board.

This board is situated at Wardha, the district headquarters. Its membership by 1967 was 367 recording a rise of 49 over that of the pre- vious year. Its income and expenditure during the same year amounted to Rs. 11,000 each. The Board is required to carry out propaganda work in order to spread the co-operative movement. In this purpose the board organises agricultural shows and exhibitions for the benefit of the rural folk in order to impress upon them the importance of co-operation.

Co-operative Supervising Unions.

There were seven supervising unions in this district in 1967. They had 433 members. Their income amounted to Rs. 2,91,000 and their expenditure to Rs. 2,28,000 during the same year. To these unions are affiliated the agricultural co-operative credit societies in the district.

Federations of Co-operative Societies.

Three federations of co-operative societies functioned in the district in 1967. They had 85 members. Their income and expenditure amounted to Rs. 55,000 and Rs. 40,000, respectively.

It will be seen that there had been a vast growth in the co-operative field under the Three Five Year Plans. At the beginning of the First Five Year Plan there were only 266 co-operative societies. Their number increased to 654 by June 1963 and their membership to 5635 from 3493.

The planned development under the Five Year Plans has laid more emphasis on the development of agriculture. This is to be realised by introducing new agricultural implements, new cultural practices, use of improved seeds and so on. The co-operative movement is regarded as the means through which the State tries to achieve this object.

Co-operative Industrial Estat.

It was proposed to establish an industrial estate on Co-operative basis at Borgaon near Wardha during the 3rd Five Year Plan. For this purpose a land admeasuring 10.14 acres and costing about Rs. 10,000 was acquired. In addition 0.34 acres of land belonging to Government was acquired. During 1962-63, the membership of the estate was 15. The main object of establishing the industrial estate is to provide common facilities to the members so as to enable them to start their own industrial units and thereby accelerate the process of industrialisation. The common facilities included (1) sheds and plots, (2) roads within the estate, (3) electricity, (4) water supply and (5) sanitation. The total investment of the estate was estimated to be Rs. 10 lakhs, of which Rs. 2 lakhs were to be raised by the society and Rs. 2 lakhs were to be Government contribution in the form of interest-free loan recoverable in 15 years. The rest of the amount was secured as a loan from the Life Insurance Corporation against the Government guarantee.

The details of the development cost of the estate are given below:—

The following industries are proposed to be established in the estate after its completion:—

(1) Cotton seed processing, crushing and solvent extraction plant;

(2) Manufacture of polythene products;

(3) Manufacture of automobile parts and truck body;

(4) Ice plant;

(5) Hosiery plant;

(6) Cold storage and fruits and vegetables preservation plant;

(7) Manufacture of brass, copper and aluminium utensils;

(8) Manufacture of surgical instruments out of stainless steel;

(9) Manufacture of fractional electric meters and other electrical accessories;

(10) Dal mills;

(11) Automobile servicing workshop; and

(12) Engineering workshop.

By. 1967, the estate had 14 members, its share capital during the year amounted to Rs. 1,00,000 and working capital to Rs. 1,85,000. No units were established in the estate till 1967.

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