Cooperative Movement in India — Amul, IFFCO, NAFED, 97th Amendment, and Cooperative Banks

The cooperative movement is a vital part of India’s economic structure, especially in agriculture, dairy, and banking. The 97th Constitutional Amendment (2011) gave cooperatives constitutional status. This is a frequently tested PSC topic.

1. History of Cooperatives in India

Year	Event
1904	Cooperative Credit Societies Act — first cooperative law in India (enacted under Lord Curzon)
1912	Cooperative Societies Act — extended to non-credit cooperatives (marketing, consumer, etc.)
1919	Cooperatives became a state subject (Montague-Chelmsford Reforms)
1929	Royal Commission on Agriculture (Linlithgow Commission) — recommended strengthening cooperatives
1942	Cooperative Planning Committee (R.G. Saraiya) — recommended multi-purpose cooperatives
1946	Cooperative Societies became a State subject under the Government of India Act
1954	All-India Rural Credit Survey Committee (A.D. Gorwala) — recommended state partnership in cooperatives
1958	National Cooperative Development Corporation (NCDC) established
2002	Vaidyanathan Committee — recommended reform of rural cooperative credit
2011	97th Constitutional Amendment Act — gave constitutional status to cooperatives
2021	Ministry of Cooperation created (separate ministry under Amit Shah as first minister)

2. Constitutional Provisions for Cooperatives

Provision	Detail
97th Amendment (2011)	Added Part IXB (Articles 243ZH to 243ZT) to the Constitution
Article 19(1)(c)	Right to form cooperatives (added by 97th Amendment) — Fundamental Right
Article 43B	State shall endeavour to promote cooperatives (DPSP — added by 97th Amendment)
Part IXB	Detailed provisions on cooperative societies — incorporation, elections, audit, governance
Cooperatives in State List	Entry 32, List II (State List) of Seventh Schedule
Multi-State cooperatives	Governed by Multi-State Cooperative Societies Act, 2002 (Central Act)

PSC Favourite: “Which amendment gave constitutional status to cooperatives?” — 97th Amendment (2011).

3. Structure of Cooperative Credit in India (Three-Tier)

Short-Term Credit Structure

Level	Institution	Function
National (Apex)	NABARD (National Bank for Agriculture and Rural Development)	Refinancing, supervision, development
State	State Cooperative Banks (SCBs)	Apex credit institution in the state
District	District Central Cooperative Banks (DCCBs)	Intermediate credit; channels funds to PACS
Village	Primary Agricultural Credit Societies (PACS)	Grassroots level; provides crop loans to farmers

Long-Term Credit Structure

Level	Institution
State	State Cooperative Agriculture and Rural Development Banks (SCARDBs)
Primary	Primary Cooperative Agriculture and Rural Development Banks (PCARDBs)

4. Major Cooperative Organisations in India

Amul (Anand Milk Union Limited)

Aspect	Detail
Founded	1946 (as a movement); Amul brand launched 1955
Founder	Tribhuvandas Patel (with support of Sardar Vallabhbhai Patel)
Architect of Amul model	Dr. Verghese Kurien — “Father of White Revolution”
Location	Anand, Gujarat
Parent organisation	Gujarat Cooperative Milk Marketing Federation (GCMMF)
Model	Three-tier: Village Dairy Cooperative Societies - District Unions - State Federation
Operation Flood	Launched 1970 by NDDB (National Dairy Development Board); replicated Amul model nationally
NDDB Chairman (first)	Dr. Verghese Kurien
Impact	Made India the world’s largest milk producer

IFFCO (Indian Farmers Fertiliser Cooperative)

Aspect	Detail
Founded	1967
Headquarters	New Delhi
Type	Multi-State Cooperative
Products	Urea, NPK, nano-fertilisers
Plants	Kalol and Kandla (Gujarat), Phulpur and Aonla (UP)
Distinction	World’s largest fertiliser cooperative
IFFCO Nano Urea	Launched 2021 — liquid nano urea; first of its kind globally

NAFED (National Agricultural Cooperative Marketing Federation)

Aspect	Detail
Founded	1958
Headquarters	New Delhi
Role	Procurement, marketing, and export of agricultural produce
Key functions	Operates Minimum Support Price (MSP) procurement; manages buffer stocks of pulses and oilseeds
”NAFED Bazaar”	Retail outlets for quality agricultural products

NCDC (National Cooperative Development Corporation)

Aspect	Detail
Established	1963 (under NCDC Act, 1962)
Headquarters	New Delhi
Role	Financial assistance to cooperative societies; planning and promotion of programmes for cooperatives

Other Important Cooperatives

Organisation	Sector	Key Fact
KRIBHCO (Krishak Bharati Cooperative)	Fertiliser	Hazira plant (Gujarat); urea production
NCCF (National Cooperative Consumer Federation)	Consumer goods	Operates Jan Aushadhi stores
Indian Farmers Fertiliser Cooperative (IFFCO)	Fertiliser	World’s largest fertiliser cooperative
ICCOA (Indian Cooperative Coffee Houses)	Coffee/hospitality	Network of coffee houses across India
Lijjat Papad	Women’s cooperative	Founded 1959, Mumbai; 45,000+ women members
SEWA (Self Employed Women’s Association)	Women workers’ cooperative	Founded 1972 by Ela Bhatt, Ahmedabad

5. NCUI (National Cooperative Union of India)

Aspect	Detail
Founded	1929
Headquarters	New Delhi
Role	Apex body representing the cooperative movement in India; conducts training, research, and awareness
International affiliation	International Cooperative Alliance (ICA)
Cooperative principles	Voluntary membership, democratic control, member economic participation, autonomy, education, cooperation among cooperatives, concern for community

6. Types of Cooperatives in India

Type	Example	Function
Credit cooperatives	PACS, Urban Cooperative Banks	Providing loans
Marketing cooperatives	NAFED, State marketing federations	Marketing agricultural produce
Consumer cooperatives	Kendriya Bhandar, Super Bazaar, Apna Bazaar	Retail goods to consumers at fair prices
Dairy cooperatives	Amul, Nandini (Karnataka), Milma (Kerala)	Milk collection, processing, marketing
Sugar cooperatives	Maharashtra sugar cooperatives	Sugar production
Housing cooperatives	State housing cooperative federations	Affordable housing for members
Fisheries cooperatives	Matsyafed (Kerala)	Fish marketing and welfare
Labour cooperatives	Construction worker cooperatives	Providing organised labour
Farming cooperatives	Joint farming societies	Collective agriculture
Industrial cooperatives	Weavers’ cooperatives (Handloom)	Textile production

7. 97th Amendment — Detailed Provisions (Part IXB)

Article	Provision
243ZH	Definitions
243ZI	Incorporation of cooperative societies
243ZJ	Number and term of members of board (max 21; term 5 years)
243ZK	Election of board members — by State Election Commission
243ZL	Supersession (max 6 months)
243ZN	Audit of accounts (within 6 months of close of financial year)
243ZO	Right of member to get information
243ZP	Returns to be filed
243ZQ	Offences and penalties
243ZR	Application to multi-state cooperatives
243ZS	Application to Union Territories
243ZT	Continuation of existing laws

8. Problems of Cooperatives in India

Problem	Detail
Political interference	Board elections are often controlled by political parties
Mismanagement	Lack of professional management; corruption
Overdependence on government	Many cooperatives are financially unviable without government support
Limited coverage	Cooperatives cover only a fraction of rural credit needs
NPAs in cooperative banks	High level of non-performing assets
Urban bias	Urban cooperative banks sometimes used for money laundering
Dormant societies	Many cooperatives exist only on paper
Regional imbalance	Cooperatives are strong in Maharashtra, Gujarat, and Kerala but weak in many eastern and northeastern states

9. Ministry of Cooperation (2021)

Aspect	Detail
Created	July 2021
First Minister	Amit Shah
Purpose	Separate ministry to provide dedicated focus to the cooperative movement
Previously under	Ministry of Agriculture and Farmers Welfare
Key goals	Strengthen cooperative structure, promote new cooperatives, reform PACS

10. Previous Year PSC-Style Questions

Question	Answer
First Cooperative Societies Act in India?	1904
97th Amendment relates to?	Cooperatives (Part IXB)
Father of White Revolution?	Dr. Verghese Kurien
Amul is headquartered at?	Anand, Gujarat
IFFCO was established in?	1967
NAFED was established in?	1958
Cooperatives are in which list of the Constitution?	State List (Entry 32)
Article 19(1)(c) guarantees?	Right to form cooperatives
NDDB was established by?	Dr. Verghese Kurien
Ministry of Cooperation was created in?	2021
Multi-State cooperatives are governed by?	Multi-State Cooperative Societies Act, 2002
Lijjat Papad is an example of?	Women’s cooperative
NCUI stands for?	National Cooperative Union of India
PACS stands for?	Primary Agricultural Credit Societies