Cooperative Institutions In India: Causes Of Failure And Reform Imperatives

Povzetek

This paper synthesises empirical and case‑based evidence to explain why many Indian cooperatives fail and why a minority endure or prosper. It integrates institutional economics and governance frameworks with multi‑sector empirical findings to identify recurring failure pathways—governance capture, contractual inefficiencies, insufficient equity and working capital, weak managerial capacity, and adverse regulation—while contrasting them with the institutional design of successful dairy cooperatives. Using studies on sugar, dairy, primary agricultural credit societies (PACS), farmer producer organisations (FPOs), producer companies and multipurpose marketing cooperatives, the analysis shows that: (a) poor board and management incentives systematically undermine recovery and operational discipline; (b) ownership and contracting structures create monopsony or free‑rider distortions that reduce producer supply and cooperative viability; and (c) size, membership commitment and access to capital determine the capacity to invest in markets and technology. The paper offers prioritised, actionable policy and design recommendations—strengthened member equity and patronage rules, transparent board selection and performance metrics, targeted professionalisation and capacity building, calibrated fiscal support, and streamlined regulatory oversight—for restoring cooperative viability. The contribution lies in assembling cross‑sector empirical regularities across recent Indian literature, linking them to governance and institutional theory, and proposing operational reforms tailored to the Indian policy environment.