What prompted changes in the State Co-operative Societies Acts?

Question

Question

This question was previously asked in

RRB NTPC Graduate Level CBT-I Official Paper (Held On: 09 Jun, 2025 Shift 1)

Answer 1

The correct answer is Poor quality of functioning.

Key Points

The changes in the State Co-operative Societies Acts were prompted by the poor quality of functioning of several co-operative societies.
Many co-operative societies faced issues like inefficiency, mismanagement, and lack of accountability, which necessitated reforms in their governance structures.
The poor performance of co-operative societies led to inadequate service delivery to their members and stakeholders.
To address these challenges, the State Co-operative Societies Acts were modified to introduce measures such as better financial monitoring, improved governance, and stricter audit processes.
These reforms aimed to restore trust and improve the operational efficiency of co-operative societies across the states.

Additional Information

Co-operative Societies:
- Co-operative societies are organizations formed by individuals with a common interest, primarily to meet their economic, social, and cultural needs.
- They are governed by the Co-operative Societies Act, 1912, and respective State Acts.
- Their core principles include voluntary membership, democratic decision-making, and equitable distribution of benefits.
Common Issues in Co-operative Societies:
- Lack of professionalism and skilled management often results in inefficient operations.
- Instances of corruption and political interference have led to misuse of resources.
- Inadequate financial oversight and poor audit mechanisms result in fraudulent practices.
Reforms in Co-operative Sector:
- Efforts like the 97th Constitutional Amendment Act, 2011, sought to improve transparency and democratic governance in co-operatives.
- Provisions were added to ensure regular elections, proper audits, and member empowerment.
- State-level reforms often focus on reducing political interference and improving operational efficiency.
Role of NABARD:
- The National Bank for Agriculture and Rural Development (NABARD) provides financial and technical support to co-operative institutions.
- It also works on capacity building and institutional strengthening of co-operatives.