Cooperatives are about dedicated leadership; the states which were able to provide that today boast of a thriving cooperative sector. Ghanshyam Amin, Chairman, Cooperative Bank of India, tells Elets News Network (ENN) how cooperative banks make effective use of money of the people for their own welfare
How do you think cooperatives benefit economy?
The cooperative movement in India has been one of the largest such movements in the world. We have six lakh cooperative institutions and 52 crore people, who are members of cooperatives across India. In this context, milk cooperatives in India have turned out to be one of the most successful ones across the world.
The White Revolution, which took place in India, was possible because of the cooperative movement. Amul is one of the best examples, globally. It has done so well that the company could give back 75 per cent of its profits to the farmers. That is the power of cooperatives.
Everybody talks about rural development, but nothing can bring about this development the way cooperative sector can. Even financially, in case a farmer needs loan, cooperative banks are there to help him out. More importantly, these cooperatives do not run on funds given by the government, but the money contributed by its own members.
Ever since the emergence of new-age economic policies, the cooperatives have to compete with the commercial institutions run by MBA graduates and finance experts. Moreover, funding is never a problem for big institutions, but this is not the case with cooperative institutions. The office-bearers in cooperatives work on voluntary basis; even a Chairman, who is a full-time appointee, gets very little pay. But, despite these constraints, the cooperative movement has done more good towards rural development than anything else.
Why do you think cooperative movement has been aggressive in few states unlike most others?
The reason behind it is that in cooperatives, you need a dedicated leadership, which was provided in those states. Along with that, the government should also encourage the growth of cooperatives through its policies. In some states, the government encourages building up of cooperatives, but leaders didn’t emerge to take the lead, so the entire exercise proved futile.
After Independence, Sardar Patel and Mahatma Gandhi had clearly told their followers that real independence will come when the development of the villages will start taking place. Accordingly, their followers went to villages and explained to the farmers how working in cooperatives will empower them and solve their problems. Similarly, the dairy farmers were convinced to work in cooperatives, the result is there for everyone to see.
What are your expectations from the government?
The government must act as a benevolent supervisor, but the day-to-day work of cooperatives should not require permission from government officers. They should definitely do audits, but these must be fair and impartial. Politics should be kept away from cooperatives as its aim is to serve the poor. Even the leaders from the opposition parties should not be treated differently.
There have been instances where the elected body is superseded and a government officer is made administrator. But, this officer has so much work of the government that he cannot concentrate on the work of the cooperative properly. Even if he manages to work for the cooperatives, he can’t take independent decisions for its betterment. So, it is imperative that the government does not try and influence the cooperatives.
There have been examples like Madhavpura scam where the administration of the cooperative banks was found at fault. What is your opinion about it?
Transparency is important in any administration, and with the advancement of technology, that is happening fast. Everything is going online, leaving little scope for foul play.
As for the Madhavpura scam, it was a different story. Many companies are registered under the Companies Act and a lot of these down their shutters after taking money of the investors. But unfortunately, not much has been done for that. However, in cooperatives, whatever we do is a service to the people, and anybody going against the spirit has to face the music. Almost in every institution, scams take place, including the government setups, though they have the best-defined norms of operation. So, it’s time we took lessons from scams like Madhavpura and moved on.
What is your dream project?
Talking on a global scale, there are various cooperatives that are doing better than some of the best cooperatives in India. Here, some cooperatives have registration, but lack professionalism. There should be a strong HRD and professional management mechanism in place. Further, there must be a speedy procedure to resolve people’s issues, only then we can compete with the best.
We can take example of companies like Amul that have given competition to the ones like Nestle and Cadbury. Even government should aim for such things. If a particular cooperative is week, the government should try and strengthen it instead of going for its liquation.
The White Revolution, which took place in India, was possible because of the cooperative movement. Amul is one of the best examples, globally
What best practices can be adopted to ensure progress of cooperatives?
If we talk about the cooperative sector in Gujarat, it is truly the backbone of villages. A few years back, India faced a draught. While some states faced problems like lack of animal fodder and agricultural commodities, the situation was different in Gujarat. With a vibrant cooperative sector in place, people did not have to face much problem.
Just as we have done in case of Milk and Sugar segments, we should also strengthen cooperatives for other agricultural products. For instance, farmers sell potato at two rupees per kg in the market, but the consumers pay a lot more for the by-products like chips. We should make a federation and help farmers get machines to make chips and replicate the model of Amul.
Elets The Banking and Finance Post Magazine has carved out a niche for itself in the crowded market with exclusive & unique content. Get in-depth insights on trend-setting innovations & transformation in the BFSI sector. Best offers for Print + Digital issues! Subscribe here➔ www.eletsonline.com/subscription/