2 months ago
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Story truthful far: The dire financial crisis India’s cooperative societies are in was connected afloat display on March 10 when Centre informed Lok Sabha that of the 8.48 lakh societies, 2.11 lakh are successful loss, 1.41 lakh non-functional and 47,688 under liquidation. The profit/loss data is not disposable for 99,325 cooperative societies, stated Union Cooperatives Minister Amit Shah in a written reply. Only 3.49 lakh cooperatives are successful profit.
Uttar Pradesh—one of the largest States—has the highest percent of defunct societies at 41.8% (16,997), followed by Madhya Pradesh with 34.4% (18,545), Rajasthan with 31.8% (13,357), Andhra Pradesh with 30.1% (5475) and West Bengal with 27.8% (8,930). The information of smaller States is adjacent worse—Nagaland (72.7%), Delhi (67.1%), Sikkim (55.3%), Manipur (52%) and Chandigarh (46.4%).
In contrast, Maharashtra, which has the highest number of cooperatives (2.26 lakh), has the lowest stock of defunct societies (2,739 oregon 1.21%). A akin pattern emerges in Gujarat, where 6,272 of 86,519 societies (7.25%) are defunct, followed by Karnataka (7.54%) and Haryana (8.23%).
Among the apical 10 States with the highest fig of cooperatives, confederate and occidental States–Maharashtra, Gujarat, Tamil Nadu, Karnataka and Telangana have managed to support astir of their societies afloat. However, West Bengal and the Hindi Belt—U.P., Madhya Pradesh, Rajasthan—have astatine least 25% of their societies defunct.
Functional cooperatives successful loss, liquidation
The presumption of the functional cooperatives is besides dire. On average, 31.75% of the cooperatives in the above-mentioned States are successful loss. Underperformers include Telangana (47.22%), Madhya Pradesh (38%), Haryana (41%) and Tamil Nadu (35.3%), portion Maharashtra stands connected the borderline (31.14%). States like Gujarat (20.02%), Karnataka (25.9%), Uttar Pradesh (28.98%) and Rajasthan (23.53%) fare better.
Apart from those successful loss, 47,688 societies are nether liquidation. The 5 States with the largest fig of cooperatives—Maharashtra (2,25,986), Gujarat (86,519), Telangana (60,858), Karnataka (46,969) and Madhya Pradesh (53,965)—amount to 44,561 (93.44%) of societies under liquidation.
Though the West and Southern States person managed to support much societies afloat, the information clearly indicates that astir of them are either successful loss, under liquidation, oregon information astir their profit/loss presumption is not available. On the different hand, West Bengal and the Hindi Belt have managed to support much societies successful nett than in loss.
Why are cooperatives performing severely successful these States?
A breakdown of the apical 5 States—Maharashtra, Gujarat, Telangana, Karnataka and Madhya Pradesh points to five sectors bringing down their performances—Dairy, Housing, Credit & Thrift, Labour and Women Welfare.
Here’s a look astatine however the numbers stack and what ails them.
Dairy
One of the worst-hit sectors is dairy cooperatives. Defined arsenic a voluntary radical of dairy farmers to collectively procure, process, and marketplace beverage and its products, 14,251 dairy cooperative societies (DCS) in the 5 States are either non-functional oregon nether liquidation. In Madhya Pradesh, of 53,965 societies, 2,793 are non-functional, and 3,952 are nether liquidation, portion Maharashtra and Gujarat, which person the highest fig of dairy cooperatives, are performing better—396 and 271 societies respectively are non-functional oregon nether liquidation.
The dairy assemblage acts as a fiscal buffer for farmers during harvest failures, droughts, floods, and marketplace volatility owed to its dependable income, according to the National Bank for Agriculture and Rural Development (Nabard). However, successful the post-COVID play (2022-23), the dairy manufacture faced pugnacious times owed to the unreasonable fall successful beverage prices, which did not screen farmers’ accumulation costs. Since then, with renewed husbandman engagement and sustainable fodder programmes, the beverage accumulation surged by 25% in the October 2024-March 2025 period, according to a study by financial services steadfast Systematix. But unseasonal rains, geopolitical disturbances successful Asia, and robust festive demand have led to rising milk procurement costs, eating into the cooperatives’ surplus inventory.
The Centre has urged cooperatives to ensure 100% circularity and sustainability successful the dairy assemblage by utilizing tegument and bones of cattle isolated from dung, adding to income of farmers.
Housing
Maharashtra and Gujarat apical the database of non-functional oregon under-liquidation housing cooperatives, with 2,102 and 2,457 societies retired of a full of 8,033 defunct oregon liquidating housing cooperatives. Housing cooperatives are a democratically controlled, legally incorporated radical constituted to conscionable members’ lodging needs and amended surviving conditions. With a higher attraction of lodging cooperatives successful municipality areas, societies in Maharashtra, Gujarat and Telangana are facing a financial crunch mainly owed to depositors losing wealth by investing successful scam-hit cooperative banks like PMC, New India and Mumbai Bank, among others.
Other issues plaguing the lodging cooperatives are non-payment of attraction charges by members, mismanagement of funds by committees and long-drawn redevelopment processes.
Credit & Thrift
Credit and Thrift societies are member-owned fiscal cooperatives which promote the savings, credit, and security needs of their voluntary members. The presumption and conditions of mutual aid are decided by the members themselves. Gujarat, Telangana and Madhya Pradesh have the highest fig of non-functional Credit & Thrift societies, contributing to 4,128 of 4,898 specified cooperatives. In Maharashtra and Madhya Pradesh, 1,452 and 1,424 lodging cooperatives are nether liquidation.
A bulk of specified societies are smaller ones with reserves little than ₹ 1 lakh and are not straight inspected by the Reserve Bank of India (RBI). Due to a deficiency of oversight, the lending and involvement rates are acceptable by these societies and often bash not compensate. High-cost borrowers are offered precocious involvement rates, putting specified societies under severe stress. Scam-hit cooperative banks and mismanagement of credit unions person besides compounded these societies’ issues.
Labour
A worker-owned, democratically run cooperative is a labour society which helps workers in unorganised sectors question just wages, secure contracts, and marque profits done work. Except for Telangana, labour cooperatives in the 5 States constitute a precise small chunk of the non-functional societies. In Telangana, 2,134 labour societies are non-functional while 185 are nether liquidation.
Successful labour cooperatives similar the Indian Coffee House, the Mahila Griha Udyog Lijjat Papad and the Mumbai Tiffin Box Suppliers Trust (Mumbai Dabbawala) person made past by not just adapting, but retaining their customers and providing amended services than commercialized competitors. However, successful Telangana, reports amusement that galore cooperatives involved in operation person been driven to bankruptcy. One such example is Eturu Grama Prajala Isuka Quarry Labour Contract Cooperative Society Limited, which was slapped with a ₹3.4 crore GST liability aft third-party soil miners excavated soil worthy ₹24.5 crore but paid a small amount to the cooperative itself.
Women’s welfare
Managed by women to improve their socio-economic status, the cooperatives help women with job opportunities, easy-access loans, capital, and lines of credit. Across States, women cooperatives are functioning well, except successful Madhya Pradesh, where 8,495 specified societies person go defunct. Ranking second, 562 women cooperatives successful Telangana person go non-functional.
According to a study, limited entree to formal finances, deficiency of vulnerability to concern networks, mobility restrictions and social inhibitions had severely clipped the advancement of women entrepreneurs who were portion of such cooperatives in Madhya Pradesh. The survey states that portion 60% of the women were alert of authorities schemes aiding them, lone 25% benefited from them and relied mainly on self-help groups (SHGs) arsenic a superior root of capital. Lack of enactment astatine location had besides added to the stress 80% of these women faced portion juggling work, household responsibilities and child-care.
What is the roadworthy ahead?
With the rollout of the National Cooperation Policy, 2025, the Centre has shown intent to fortify the cooperative system. Aiming to link 50 crore radical with the sector, Mr. Shah has said that Dalits, Adivasis and women are astatine the halfway of the caller policy. The Centre has already kicked off cooperatives successful taxi services (Bharat Taxi) and plans to expand to insurance and greenish vigor shortly.
Critics, similar workplace national Samyukt Kisan Morcha has stated that the caller argumentation is aimed astatine making cooperatives service firm interests and centralised power with the Union government rather than the States. It stated that the argumentation provided the Rashtriya Swayamsevak Sangh (RSS) and the BJP more power astatine grassroot-levels alternatively than helping societies.
