CO-OPERATIVE CREDIT SOCIETIES FOR EMPLOYEES WELFARE

INTRODUCTION

With the growth of large scale industries and the introduction of the development projects in different fields of the country's economy, in the last decade, a large section of the population have joined the rank of the urban proletariat. Most of them are the workers or employees in the Govt. or Semi-Govt. organizations and in the commercial or industrial enterprises or otherwise. As the total development of the country depends on the proper growth and extension of the commercial and industrial undertakings, so is the healthy and balanced development of these institutions dependent on the welfare and better standard of living of the working people.

PROBLEMS OF THE WORKERS AND THE EMPLOYEES

In the present day economy a big gap is existing in the wages or earnings of the employees and the cost of basic necessities of life. With their low-rated fixed earnings it has, therefore, become almost impossible on their part to make both ends meet, not to speak of raising their living standard or meeting expenses in other basic needs like medical care or the education of the children. The employees will, therefore, need credit for meeting expenditure on customary events such as-

weddings and funerals. for purchase of or building a house for medical care for education of children and for subsistence of his family at country

In the absence of any institutional credit for the employees they are often to fall back upon the ‘Mahajans' to borrow money at a high rate of interest which, again, heavily cost upon their low-rated fixed earnings. Besides, a major part of their earnings are spent to purchase their daily, necessaries of life; but here in this case also they are often cheated at the hands of the traders in the-absence of any arrangement made for supply of their required materials at fair price. Thus, the fixed income groups are now subject to serious economic hardship or and a good living condition for them is now beyond any imaginary proportion.

CO-OPERATIVE CREDIT SOCIETIES

Co-operative credit society with its programme of Supplying cheap credit and extending service for supplying daily necessaries of life at fair price can successfully meet the problems faced by fixed income group employees. It is, however, first necessary to understand what is

actually meant by “Co-Operation” and more definitely, a credit cooperative.Definition of the Co-operative : "The cooperative is an association of persons, usually of limited means, who have voluntarily joined together to achieve a common economic and through the formation of a democratic controlled business organization, making equitable contribution to the capital required and accepting a fair share of the risks and benefits of the undertaking". The Cooperative, therefore, have considerable freedom to draw up their plan and values; but there are certain principles and practices marking off a co-operative from a private business. The most important of these areas follows :

Membership in the societies must be voluntary and open to everyone All member must have an equal voice in the affairs of the society All members make a contribution to the capital of the society. Interest on loan is restricted and relatively low Surplus must be distributed to members in proportion to the business which they have

done with their society. Consumer's Co-op. Store, agricultural Producers . Co: op., Marketing Society and so on.

FINANCING A CO-OPERATIVE CREDIT SOCIETY

Co-operatives engaged in banking or credit business require practically no fixed capital. Its Operating capital in principle. is provided by the members themselves, Such capital is brought into the Co-operative in the following forms :

A. Non-repayable entrance feesB. Shares which are usually transferable;C. Deposits from members and non-members.

In addition a credit Cooperative may borrow from an outside financial Institution, generally a regional Cooperative Bank.

ROLE OF THE CREDIT SOCIETY IN EMPLOYEES WELFARE:

The employees organized into a credit cooperative, financed out of their own contributions or deposits, assist each other in solving their common problem of credit in times of their need. The employees serving in a big enterprise or in large industries like Textile & Jute Mills have brighter scope of success in this direction.