Part IXB: The Co-operative Societies

Article 243ZI: Incorporation of Co-operative Societies

Original Article:

Subject to the provisions of this Part, the Legislature of a State may, by law, make provisions with respect to the incorporation, regulation, and winding up of co-operative societies based on the principles of voluntary formation, democratic member control, member-economic participation, and autonomous functioning.

Explanations:

Article 243ZI provides the framework for the incorporation, regulation, and dissolution of co-operative societies by State Legislatures. It emphasizes principles such as voluntary membership, democratic control, and economic participation by members, ensuring autonomy in their functioning. This article empowers co-operatives to act as vehicles of socio-economic development, particularly in rural and semi-urban areas.

These principles enable the societies to operate with transparency, encourage member participation, and focus on achieving collective goals while upholding democratic values.

Clause-by-Clause Explanation:

Incorporation: States can create laws to establish co-operative societies, ensuring they function as legal entities for collective benefit. Example: The Gujarat State Cooperative Act enabled the establishment of societies like Amul Dairy Cooperative.

Regulation: State laws define operational guidelines, accountability measures, and governance frameworks for co-operatives, promoting transparency and accountability. Example: Maharashtra Cooperative Societies Act provides detailed governance frameworks for sugar cooperatives.

Winding Up: Specifies procedures for orderly dissolution, ensuring members' interests are safeguarded. This helps protect stakeholders and avoid conflicts. Example: Guidelines under the Kerala Cooperative Act provide a framework for dissolving non-functional societies.

Historical Significance:

The 97th Amendment incorporated this article to address the growing need for a standardized yet flexible framework for co-operatives, recognizing their potential in promoting self-reliance and local development.

This constitutional recognition elevated co-operatives, transforming them into instruments of economic inclusion and rural development, especially after India's independence.

Legislative History:

Article 243ZI was introduced as part of the 97th Constitutional Amendment, enacted in 2011 and effective from 2012. It sought to harmonize state laws and provide a unified framework for the governance and regulation of cooperative societies. This addressed inconsistencies in laws governing cooperatives across states.

Debates and Deliberations:

During the drafting of Article 243ZI, several members of Parliament emphasized the importance of maintaining the autonomy of co-operatives while ensuring their accountability. Concerns about political interference in co-operative societies were raised, leading to provisions that prioritize democratic governance and minimize external control.

The debates also highlighted the potential of co-operatives to bridge economic disparities in rural areas and foster self-reliance among marginalized groups.

References:

• The Constitution (97th Amendment) Act, 2011.
• Ministry of Cooperation, Government of India.
• Case Studies on Successful Cooperatives in India.
• Commentary on Indian Constitutional Law by D.D. Basu.