Cooperatives are crucial for advancing the Decent Work Agenda in India

Inaugural address by Dagmar Walter, Director, ILO DWT/CO-New Delhi at the Multistakeholder Consultation on Cooperatives in India, hosted by ILO, CII and IRMA.

Statement | Online Meeting | 02 March 2022
Esteemed government reprsentatives, employers & cooperatives, and social partners;
Members of CII and IRMA,
Ladies and gentlemen,

A very warm welcome to everyone present here. I am delighted to deliver this address on behalf of the ILO to this Multistakeholder Consultation on Cooperatives in India, a joint undertaking with CII and IRMA.

At the ILO, we view cooperatives as an important lever in improving the living and working conditions of women and men globally. Cooperatives feature prominently at the United Nations and the UN task force on the Social and Solidarity Economy (SSE). Providing for some 280 million jobs globally, cooperatives have a proven track record of creating and sustaining employment, contributing to promoting decent work and advancing sustainable development goals. Additionally, cooperatives can foster economic growth and improve productivity by providing affordable financial services and training opportunities for their members, enabling them to make investments, upgrade technologies and diversify their income sources. Thus, they can significantly support in 'leaving no one behind'.

The ILO's activities are guided by the international standard on cooperatives, which is the Promotion of Cooperatives Recommendation, No.193 from 2002. We work in partnership with the International Co-operative Alliance (ICA) and are also a member of the Committee for the Promotion and Advancement of Cooperatives (COPAC).

Cooperatives operate at the national and grassroot levels to help people harness the power of collective bargaining, thus protecting the financial interests of disadvantaged and underrepresented sections of society; hence they have played a significant role in addressing the developmental needs of the underprivileged sections of India.

India has more than 8 lakh (800,000) registered cooperative societies, especially in the agricultural, banking and housing sectors. In agriculture, cooperative dairies, sugar mills, are some examples, formed to process and sell the pooled produce of farmers. Cooperative institutions are also spread across the banking and finance sector, in rural and urban areas, which help provide credit that may otherwise be unavailable from the commercial banking sector.

A recent Bain Report shows the growing demands and change in the rural economy landscape. Sectors that comprise India's rural economy contribute to nearly half of the nation's GDP and are growing steadily, supported by the government and private sector's improvements to the physical and digital infrastructure. Companies addressing inefficiencies throughout the value chain will have significant growth potential. As a new generation of farmers take the reins, technology will figure prominently in the agriculture value chain. The sector also needs faster and better access to financing. Capacity building, transparent and reliable data, and building trust with farmers for adopting new practices are factors that will influence the future of India's rural economy.

However, the success story of India's cooperatives has been mixed, with some cooperatives, like dairy, performing exceptionally well, while others have not performed as expected.

Cognisant of the expected growth in India's economic landscape, the Government of India has agreed to further promote cooperatives by establishing a Ministry of Cooperation, which can help India realize its dream of becoming an inclusive economy and achieve the vision of 'Aatma Nirbhar Bharat'.

Therefore, against this backdrop, and factoring in the country's needs, we view cooperatives as having great potential to advance decent work by formalizing the informal economy, which forms 90 per cent of the workforce, by cre¬ating economies of scale, collective voice and negotiation power.

Based on the cooperative principle of open and voluntary membership, they can also be inclusive enterprises that enable some of the most vulnerable groups, such as low-income women workers, unemployed youth, persons with disabilities, indigenous people, migrants and refugees, to participate in the formal economy actively.

Cooperatives are democratically run and focus on the needs of their members. They often provide competitive pay, prioritize job security, and also invest in the community by helping establishing health clinics and schools. Coop¬eratives have a proven record of providing stable employment even in times of economic downturn. They are often the business model of choice for preserving jobs in enterprise restructuring through worker cooperatives.

Today, the world of work is undergoing a massive overhaul – from the onward march of technology and the impact of climate change to the changing character of demographics, production and employment. Cooperation, through cooperative and other forms of social and solidarity economy enterprises, is emerging with viable and sustainable responses to these transformations – from renewable energy and platform cooperatives to social care cooperatives and worker buyouts. Moreover, it has a unique opportunity to make an impact, given the growing global quest for new forms of business and growth models.

For example, in countries like India, Brazil, Colombia, and South Africa, there exist waste picker cooperatives in waste management systems in urban areas. From agriculture to energy, cooperatives are also increasingly greening their operations. In the renewable energy industry, they have several competitive advantages, including democratic local control over energy production and use, the capacity to create local employment, and reasonable pricing.

After creating the Ministry of Cooperation, the revival of interest in cooperatives has initiated public consultations and dialogues. But there is a need for generating research-based or evidence-based knowledge on what more the country must do to make cooperatives an integral pillar of economic progress. Cooperatives in India have to emerge as a vital sector with many checks and balances. Therefore, it's not going to be an easy journey. There are multiple challenges that the government has to address. Partnerships and sectoral alliances alongside Government efforts will be critical and the preferred pathway for this movement to gain ground and achieve the desired outcome of inclusive, equitable growth and development.

Against this background, ILO, CII and IRMA have organized this round table to foster a dialogue on the issues, challenges and key strengths of the cooperatives in India. This event is envisaged to provide an opportunity to discuss the need to strengthen the policy environment to boost the cooperative movement in India, as this also contributes to improving the ease of doing business for cooperatives.

CII, with its industry network, IRMA with its sector-specific knowledge and research capability, and ILO, with its international instruments and framework for enabling sustainable enterprises and promoting global best practices at workplaces, together will bring to the table a unique proposition that will help government and all stakeholders achieve this goal.
This consultation proposes to do two things. First, to identify key issues and challenges that have held back the sector to reach its full potential in the country. Second, to chart a pragmatic approach that can leverage the strengths and identify interventions that will enable and trigger the sector's growth.

The ILO's contribution to this debate is by share knowledge base and understanding of opportunities for cooperation in the areas mentioned; and to introduce existing tools and training material on cooperative development to the benefit of all our constituents and stakeholders.

I thank you for your kind attention and wish everyone a fruitful roundtable discussion ahead.