Five reasons why cooperatives perform better


With the capitalist powers grabbing control of the economic machinery of India, the poor are getting poorer day by day. While the capitalists focus on maximizing output using minimum manpower, the issue of empowerment gets overshadowed. What India needs is a strong democratic setup in the market to address the issue. And for that, cooperatives become important.

Besides promoting empowerment, they play an integral role in the nation building process, especially by assisting in building a sustained economy. These are the five features which help cooperatives not only to empower people but help in developing an advanced self-sustainable economy.

1. Open and Voluntary membership: There are no strict rules in joining and leaving a cooperative. Individuals with a common goal and interest get together and set up a cooperative. Moreover, religion, caste, and sex do not play a part in setting up a cooperative.

2.  Finances controlled by members: All members make small contributions to building up a cooperative, which cumulatively becomes substantial. This process allows individuals to collectively set up businesses that provide mutual support to each other, who otherwise are constrained with their meager finances. Later they also approach banks and other financial institutions for loans.Thus, an individual is not under financial pressure due to loans as the burden is all divided.

3. Democratic control: There is no single boss to manage the administration of the cooperative. A committee elected by the members looks after the functioning of the cooperative. While business organizations are autocratic in nature, a cooperative is run by the devolution of power, quite akin to a democracy.

4. Distribution of surplus: The cooperative bodies are not profit-oriented enterprises and the surplus is divided among the members. However, a certain percentage is always retained for the advancement of the cooperative.

5. The motive of service: The main objective of a cooperative is to increase the living standards of the members. The main objective is never to maximize the profit of an individual. So empowerment and creating jobs opportunities is a noble service that the cooperatives aim at. (image courtesy: