The Constitutional Ninety-Seventh Amendment Act of 2011 deals with cooperatives and aims to stimulate cooperative economic activity, which would assist rural India’s growth. It is anticipated to ensure cooperatives’ independent and democratic operation and the management’s responsibility to members and other stakeholders.
The 97th Constitutional Amendment Act of 2011 granted protection to cooperative society and gave constitutional status to a cooperative society. The Constitution has amended this in two ways:
- Article 19 provides the basic right for cooperative societies to organize.
- It created a new section of the Constitution called “The Cooperative Societies” (Article IX-B).
Brief About Cooperatives Society:
A cooperative society is a group of people who work together to promote economic growth. All the members work together to earn some profit and they never leave the group before earning something like profit. Their main motive is to promote the growth of cooperative societies. They always work for their self-help; they are not dependent on others.
Different types of cooperative societies exist, including:
- Housing Society
- Agricultural Marketing Society
- Producer’s Society
- Consumers Society
- Co-operative Bank Federal Society
Cooperative Societies now have constitutional standing and security thanks to the 97th Amendment of the Constitution in 2011. The promotion of cooperative organizations is now covered by a new Article 43B inside this Directive Principles of State Policy Part IV. Its purpose is to guarantee the democratic, independent, and effective operation of cooperatives. It aims to handle important cooperative empowerment issues through voluntary organization, independent operation, democratic control, and expert management to make sure elections, general body sessions, and professional audits are conducted regularly and on time.
97th Amendment Act, 2011:
The following are the modifications made to the Constitution as a result of the Amendment:
- After the words “or unions,” the words “Cooperative Societies” were inserted in Article 19(1)(c) of Part III of the Constitution.
- Part IV received a new Article 43B, which states, “The state must endeavor to foster voluntary creation, independent functioning, democratic control, and professional administration of cooperative organizations.”
- Part IXB (The Cooperative Societies) of the Constitution was added after Part IXA. This outlines specific checks and balances on incorporation, member term, board member election, audit of accounts, and penalties of a cooperative society.
Special Features Added by the Part IXB of the Constitution:
- Every cooperative society’s board of directors should have one seat reserved for SC/STs and two for women.
- Cooperatives might establish an election commission.
- Provisions for cooperative organizations’ formation, regulation, and dissolution based on democratic principles, with a maximum number of directors of twenty-one.
- Establishing an independent professional audit.
- Provides members of cooperative groups with the right to information.
- For the elected members of the board and its office bearers, a set term of five years from the election date is provided.
- Establishing a six-month maximum suspension period for the board of directors of a cooperative society.
Conclusion:
The Ninety-Seventh Amendment Act 2011 of the Indian Constitution was a major step for the Indian government to formalize the Cooperative society in India. This amendment made the right to form a cooperative society under a fundamental right. However, with a few exceptions in some sections and states, the cooperative sector, particularly cooperative credit societies, has been chaotic. The interests were used as personal fiefdoms and ladders to political power and personal aggrandizement.