Maharashtra Board Class 11 Cooperation Chapter 3 Principles of Co operation PDF Download

Principles Of Co-operation

3.1 Introduction

To make human life smooth, planned, social and successful, there must be some rules for living life and behavior which will make human life happier. Such rules of the life are known as Principles of life.

While thinking of concept of co-operation, co-operation means helping each other, working together for welfare of society. For social welfare and economic development of weaker section of the society concept of co-operation came into existence. In co-operation importance is given for service and for social development of society, co-operative movement must move in proper direction. The economically weaker peoples of society come together and form co-operative society for their development. For smooth working of co-operative society some rules are necessary. This rules and conditions are known as Principles of co-operation. Due to co-operative principle, the aims, objective and goals of co-operative society can be achieved. For achieving success of co-operative movement and development of co-operative society there is need of co-operative principles.

Principle means certain rule and guidelines for conducting any activities. The rules accepted for achieving aims and objective of co-operative society and for growth and development of the co-operative society are known as Co-operative principles.

After second world war, many nations got independence. For rapid economic development planning was necessary. Lot of changes took place in social, political and economical sector. Accordingly, in October 1964 under the Chairmanship of Dr. D. G. Karve a committee was appointed by International Co-operative Alliance (ICA) to restructure the principles of co-operation and following co-operative principles were formulated which were universally accepted in the International conference held at Vienna in 1966. According to the Dr. Ivan MacPherson study committee's recommendation in the year 1995 the International conference held at Manchester, England the seven principles of co-operation were restructured and approved.

Teacher's Note

Co-operation means helping each other to reach goals. Think of a dairy cooperative in your village where farmers work together.

Exam Trick

Remember: 1964 is when basic principles were made. 1995 is when they were restructured. Write these two dates in your exam.

Points to Remember

Co-operation means helping and working together.
Principles are rules for running a cooperative society.
Seven basic principles were made in 1964.
These principles were changed in 1995.
Without principles, cooperatives cannot work well.

3.2 Meaning And Definition Of Co-operative Principles

Meaning

Principle means certain guideline, rule for conducting the activities, plans or programmes of any organization, which helps in achieving goals, aims and objectives of the organization. The guidelines or set of rules formulated for conducting the business activities of co-operative societies are known as Co-operative principles. Co-operative principles give guidelines, roadmaps and are the means which help to achieve the aims and objectives, goals of co-operative societies. Without these principles the co-operative society cannot conduct its activities successfully. The success or failure of co-operative society is based on the use of the co-operative principles.

Definition

1) In 1966 the International Co-operative Alliance (ICA) have defined the cooperative principles as under:

"To achieve the goals of co-operative movement the needful and practical rules are the co-operative principles".

2) Dr. D. G. Karve - defines co-operative principles as

"The rules framed to achieve objectives of co-operative movement and to regulate co-operative organization are known as co-operative principles".

Teacher's Note

Principles are like rules in a school. Just as school rules help students and teachers work together, cooperative principles help members work together.

Exam Trick

Remember: ICA is the International Cooperative Alliance. They made the definition in 1966. Write this name in your answers.

Points to Remember

Principles are guidelines for doing activities.
ICA defined principles in 1966.
Dr. D. G. Karve also gave a definition.
Principles help achieve cooperative goals.
Without principles, cooperatives fail.

3.3 Principles Of Co-operation

According to the change in time some principles have been changed but the basic principles remain same. The Principles of co-operation can be classified in two types:

Restructured Basic Principles of Co-operation

General Principles of Co-operation

3.3.1 Restructured Basic Principles Of Co-operation

Generally, all the co-operative societies in the world follows restructured basic principles of co-operation which were approved in the year 1995 at the International conference held at Manchester, England.

Following are the Restructured Basic Principle of Co-operation:

1. Open and Voluntary Membership

2. Members Democratic Control

3. Members Economic Participation

4. Autonomy and Independence

5. Education, Training and Information

6. Co-operation among Cooperatives

7. Social Commitment (Concern for Community)

1. Open And Voluntary Membership

The membership of co-operative society is open and voluntary for all. Any person can become a member of co-operative society. There is no force or compulsion for membership in co-operative society on any person. To become a member or leave membership of co-operative society is totally on the wish of the member. The membership of the co-operative society is open to all citizens residing in the working area of the co-operative society. The membership cannot be denied to any person on the basis of caste, creed, religion, gender, language, colour, economic condition, etc. A person who fulfils the conditions of membership can become the member of co-operative society.

2. Members Democratic Control

Co-operative society is a democratic organization which is controlled by the members of the co-operative society. According to this principle the working of co-operative society must be conducted in democratic manner. 'One member one vote' principle is applicable in the co-operative society. The management of co-operative society is conducted by Managing Committee which is elected by members of co-operative society. All the decisions in co-operative society are taken collectively. The final decision is taken in Annual general meeting by the members. This means members democratic control.

3. Members Economic Participation

In co-operative society the members equally contribute to the capital of the society and control it in democratic manner. The return (interest) which is received by the member on capital invested in co-operative society is limited. It means the dividend which is given on the capital has limitations. According to the co-operative societies Act, the co-operative societies can declare dividend only up to 15% and minimum 25% profit of the co-operative society must be transferred to general reserve every year. Hence, there is limit on return on capital. The dividend is declared in Annual general meeting by the members on the basis of the recommendations of Managing Committee.

4. Autonomy And Independence

The co-operative society is a democratic organization it must have autonomy and independence. All the members of the co-operative society must be resident of working area of society. The co-operative societies must have freedom to conduct business activities. They must have freedom and autonomy for planning, organizing, implementing their plans and programs. They must have freedom to take their own decision and be independent in conducting the activities of co-operative society.

5. Education, Training And Information

Member's education is one of the basic principles of co-operative form of business organization. The co-operative societies are formed by poor or weaker section of society, majority of the members are illiterate or uneducated. Education and training should be given to the Members, Office Bearers, Directors and Public. So, it is the responsibility of co-operative society to educate the members by giving them guidance, knowledge or information. Co-operative societies must educate their members by providing knowledge of working of co-operative societies, its byelaws, business, Co-operative Act, etc. Hence, members education is one of the basic principle of co-operative society.

Teacher's Note

Open membership means anyone can join. Like a village milk cooperative where any farmer can become a member if they have a cow.

Exam Trick

Remember: "One member one vote". This means all members are equal. Each person has only one vote in meetings.

Points to Remember

Open membership means no one is refused.
One member one vote means all are equal.
Members must contribute money equally.
Dividend cannot be more than 15 percent.
25 percent profit goes to reserve fund.

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