Expectation from Co-operative Movement during the Eleventh-Five Year Plan

To be launched from April-2007, the Eleventh Five Year Plan (2007-12) envisages a growth rate of 8.5-10 per cent of GDP (Gross Domestic Product) per annum. An eight per cent growth rate has been our track record during the past three years and today we are only next to China as a fast-developing economy. Our Corporate Houses are on a global taking-over spree and the demand for Indian goods in the international market has been going up. In spite of all this, quite a sizable number of our people are still far way behind having no feel of the shine. Sadly, India is the home of one-third of the world’s total poor and deprived. More than seventy-five per cent of Indians live in villages and of them, more than sixty-five per cent take to farming, poultry and cottage industries for their livelihood. Average land holding per family being less than 1.40 hectares, most of them are either small or marginal farmers. The big farmers, who account for about fifteen per cent, mostly leave their lands to share-croppers except a tiny few. Our vast water resources remain untapped and a large chunk of lands continues to be starved of water due to lack of capital and above all, will power. The Green Revolution and the White Revolution of the seventies have at best made us somehow secure in food grains although they were supposed to make us self-reliant in food and milk production. The benefits accrued in the agricultural sector remains limited to certain pockets of the country only. The use of latest know-how in food production tells the same story too. The fact that we had to import wheat and sugar from abroad in the recent past speaks for itself where we stand today. Average growth rate of about eight per cent may look grand, but the share of agriculture is a mere two per cent, that too in the past consecutive ten years. Services and industries account for the rest and it is difficult to increase them, beyond a certain point. As a result, there is a big urban-rural divide and urban per capita income is about five times of the rural income. Farmers are deserting their villages, overcrowding cities or slums or committing suicides. Easy farm loans and doubling of credit limit so as to ensure the interest of the farmers coupled with agro-marketing, employment guarantee schemes and Action Plans like “Bharat Nirman” with stress on facilities like drinking water, irrigation, housing, roads, power, telecommunication, universal education and health for all have a long way to go to improve the living standards of the common people though the Tenth Plan is nearing its end.

Against this backdrop, the Draft Eleventh Five Year Plan seeks to achieve social justice for all so as to enable everybody to reap the benefits of development. In order to achieve this goal, the Draft Plan focuses on “Inclusive Growth”.

According to National Sample Survey, only forty-nine per cent of Indian families have access to bank and insurance services whereas it is about ninety-two per cent in the US and 83-98 per cent in Europe. Again, fifty-seven per cent of Indian farmers avail of bank or institutional loans while the remaining forty-three per cent depend on non-institutional sources and surprisingly twenty-nine per cent of them on greedy money lenders. And this leaves room for NGOs and MFIs to charge 25-30 per cent interest from them. The Grameen Bank of Bangladesh that was awarded the coveted Nobel Prize for Peace recently also charges 20-25 per cent interest from its loanees. At the recently concluded All India Bankers Meet at Hyderabad (Nov 3-4, 2006), the Union Finance Minister and the RBI Governor said that NGOs would continue to charge 25-30 per cent interest in Micro credit unless and until each and every family avails of banking facilities. And this has to be endured as something is always better than nothing. Investigations reveal that exorbitant interest rates and high handedness of money lenders are behind the suicides of most farmers. Considering all this, the Eleventh Five Year Plan gives top priority to “Inclusive Growth” that the benefits trickle down. And Banks have a major role to play in this regard by motivating every family to open bank accounts coupled with credit cards and insurance cover.

It is said that adversity paves the way for opportunity. Lately, the Union Govt. has asked the banks to finance the farmers and weavers at seven per cent interest and commercial banks as well as Gramya Banks are following the guidelines. But three-tier Co-operative Banks find it difficult to follow suit as their deposits are mobilized at a relatively high price. Nor is easy NABARD money forthcoming. This forces Co-operative Banks to lend at twelve per cent interest and that too, to a lesser number of persons. Even some of them are simply unable to cope with. The Govt. of Orissa is taking steps to provide thirty-three crore rupees as grant to Co-operative Banks with the twin objectives of easy finance to farmers at seven per cent interest and at the same time, rescuing the banks from incurring loss. The State Govts. of Maharastra, Punjab, Karnataka, Andhra Pradesh have thus helped their farmers get easy loans from Co-operative Banks this year by releasing such grants. But the solution lies somewhere else. Co-operative Banks have to mobilize every rural adult to open No Frill Accounts with zero account and no introduction. This can fetch enough cheap capital from rural areas and this can be financed at seven per cent interest. Besides, general credit cards can be provided so as to enhance credit facilities.

Apart from the Co-operative Banks, Service Co-operative Societies should come forward to set up agro-markets, go-downs, cold storages, sugar mills, oil mills and cottage textile industries and other processing units. Consumer Co-operatives and Housing Co-operatives have ample scope to do business and provide services in this regard. Production oriented and services providing Co-operative Societies can do wonders as so many educated and skilled youth in the state are really interested in self-employment considering the fact that the Self Help Co-operative Act has been enacted in Orissa. The objectives and strategies of the Eleventh Five Year Plan can be achieved only through Co-operative structure and this warrants a strong political will and a firm commitment on the part of the Co-operative leadership.