Co-operatives and Rural Development in India

This paper characterises and distinguishes co-operatives from other forms of organisations and highlights the important place they occupy in India‘s rural economy. It examines their contribution to rural development that is broadly defined as a set of desirable societal goals such as increase in real per capita income, improved income distribution and equitable access to education, heath care, and employment opportunities. It also identifies and briefly discusses some contemporary issues in the management of co-operatives and outlines strategies for their resolution. The authors assert that despite their overwhelming importance in India‘s rural economy, most of the co-operatives suffer from a variety of internal and external problems. The major constraints identified by the authors include the lack of professionalism in management; an archaic co-operative law, excessive control and interference by government; v lack of good elected leadership; small size of business and hence inability to attain financial viability; lack of performance-based reward systems; and internal work culture and environment not congenial to the growth and development of co-operatives as a business enterprise. It is argued in the paper that rural co-operatives need to be democratically governed by Boards of Directors elected by their members in good standing, unshackled from the archaic co-operative laws, liberated from unnecessary government controls, and managed professionally, if they are to survive and grow in the new era characterised by deregulation, privatisation and globalization