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Co-operative movement

The co-operative movement in Kerala has a long history. The movement started in Kerala long before the attainment of independence. In 1946 there were 1669 co-operative societies with a share capital of 32 lakhs of rupees.

There are at present about 14000 co-operative societies under the Registrar of Co-operative Societies. Of these 10,503 societies function satisfactorily. They include the apex institutions like the State Co-operative Bank, the State Agricultural and Rural Development Bank, 14 District Co-operative Banks, 60 Urban Banks, 48 Primary Agricultural and Rural Development Banks and 1602 primary Lending Societies. The total deposit in the co-operative sector is 40,000 crores. About 75% of this is distributed as loans.

Co-operative institutions were developed in Kerala as a result of mass struggles and peoples' participation. Compared to the movements in other States, the co-operative movement in Kerala is more comprehensive and creative. Land reforms have played a great role in Kerala's development. Along with this co-operative movement has played a great role in freeing the people from the clutches of illicit money lenders who extracted heavy interests.

Apart from functioning as a service sector, the co-operative movement also serves as an employment sector also. About 40,000 persons are employed in the co-operative societies coming under the jurisdiction of the Registrar of Co-operative Societies. If all the employees working in the entire co-operative sector are taken together, it may exceed one lakh. It has great importance as a sector which employs an enormous number of employees both directly and indirectly.

The co-operative sector in Kerala is a wide spread one. It plays its role in the traditional, money lending, marketing, consumer, housing, women's welfare, educational, heath and construction sectors. The functioning of these institutions help to provide the people services of various kinds at low cost. The CPI (M) has formulated policies to encourage this sector. Whenever the CPI (M) led governments come to power, progressive measures were adopted to protect this sector. It was the CPI (M) led government which enacted the Kerala Co-operative Amendment Act in 1999. It is an important step forward. This Act had modernized the co-operative sector and raised it to a level where it can overcome the challenge of new times.

The State Government is intervening effectively to take the co-operative sector forward and extend its service to the people. Loans upto an amount of Rs. 2 lakhs of those farmers who committed suicide were written off. Remission of interest amounting to Rs. 270 crores has been given as part of one-time settlement. The policy that interest shall not exceed the principal amount was implemented. An amount of Rs. 2000 crores was written off during this period. During the time of agricultural disaster the rate of interest was reduced from 9% to 5.5% / 6% . As a result the farmers were benefited to a total amount of Rs. 170 crores. Interest-free loans were given for the promotion of paddy cultivation. The co-operative societies effectively intervened to arrest price rise of essential commodities. An amount of Rs. 130 crores was spent towards distributing essential commodities at low price.

The Central Government tries to implement the policies of globalisation in the co-operative sector also. Like in all other sectors the Nehruvian policies are discarded in this field also. Nehru has adopted a stand that the co-operative sector had a great role in maintaining the self reliance of the countryas did the public sector. Therefore, it was considered to be the duty of the government to strengthen the co-operative sector. But all these policies are being amended now.

It was as part of this policy that the central government had appointed a task force under the leadership of A. Vaidyanathan. The report of this committee was discussed in detail at the National Development Council and at the meeting of the co-operative ministers of the states. The central government was forced to modify the report as a result of strong protest. However, there are still certain provisions in it which hamper the co-operative sector. The report of the Central Planning Commission is also harmful to this sector.

The policy to impose service tax in the co-operative banks and the ban to use the word 'bank' by the co-operative societies will push this sector to great difficulty. It is very difficult to overcome many such structures of the Central Government.

Designed and Developed by AKG Centre for Research and Studies
Copyright: CPI(M) Kerala State Committee 2012