Welcome to the world of Karnataka State Souharda Federal Cooperative Ltd, the first Apex Body of New generation cooperatives in India. Souharda Federal Cooperative is a democratically elected self-regulatory organization of the cooperatives registered under Karnataka Souharda Sahakari Act, 1997.


India is celebrating centenary celebration of Cooperative Law. The first Cooperative Law of India The Cooperative Credit Societies Act, 1904 was passed on 25th March 1904.


Progressive Growth trends and Innovative Business Practices of
Karnataka State Souharda Federal Cooperative Ltd. (KSSFCL)

1. Brief history of Cooperative movement in India Since the beginning of mankind the concept of ‘co-operation’ has been the foundation for harmonious existence. Mahatma Gandhi once said that “Co-operatives are the gateway for economical development”. By effectively implementing this philosophy Karnataka State Souharda Federal Cooperative Ltd (KSSFCL), has successfully achieved an environment that is conducive for the growth Souharda Co-operatives in Karnataka, India.

In India, as early as 1st century, Shathavahanas adapted the concept of co-operation in the daily life of people. The great economic exponent Acharya Chanakya has propounded the necessity of the cooperative philosophy even in the delivery of justice. The ‘principle of cooperation’ has been the essence of human civilization and way of life through ages, especially in India.

In 1844, “Rockdale Society of Equitable Pioneers’ became the cooperative initiative formed under any cooperative law in the world. In India, it was on 25th March 1904 the Co-operative Credit Societies Act 1904, came into existence. On 8th May 1905, a 12-member society called ‘Agriculture Credit Cooperative Society’ that came into existence under the leadership of Shri Siddannagouda S. Patil at Kanaginahala village in the present district of Gadag in Karnataka, the 1st cooperative society in the country. However, this act was limited to agriculture credit cooperative societies. To overcome this limitation, The Co-operative Societies Act 1912 was formed to include other activities of cooperative, which became the model for the provincial governments to form their own cooperative acts.

Post-Independence, various state governments framed their own independent Cooperative Acts and the Central Government its Multi-State Cooperative Act. Accordingly, Karnataka State Cooperative Societies Act, 1959 (KSCS Act, 1959) has been in practice. A Panchayat, a Cooperative society and a School for every village were considered as the three pillars of the integrated community development. As time passed by, other aspects were included into the Cooperative act thus heralding the resurgence of a new era in cooperative movement.

2. Heralding of new era with “The Karnataka Souharda Sahakari Act, 1997(KSSA, 1997)” The state and the central governments were investing millions of rupees in the form of shares, grants, subsidy, contributions, government support, etc but the expected results couldn’t be achieved in cooperative movements. This condition continued almost until early 1980s.

Keeping this in mind, the Central Government setup a committee under the Chairmanship of Shri Ardhanarishwaran, which submitted its report in 1987. It attributed the failure of the cooperative movement to the excessive interference of the governments. It is also true that the unabated party politics in the co-operative movement is also a big hindrance to its progress.

Realizing the vital role of the cooperative movement in the progress of the society, the Central Planning Commission set up a committee by appointing Shri Chaudari Brahmaprakash as its head & with a task of drafting a ‘Model Cooperative Act’ which will prevent interference of the governments. This committee, after a detailed study of the Cooperative Acts of various states, drafted a ‘Model Cooperative Act’ in 1991 and Central Government recommended the state governments to adopt this.

Accordingly, in 1997 a bill on parallel cooperative act was tabled in the state legislature of Karnataka. Demanding an early approval of this bill by both the houses of Karnataka Legislature, a committee ‘Souharda Samvardhana Samithi’ under the chairmanship of Justice Rama Jois came into existence. It was due to the combined efforts of Sahakara Bharathi Karnataka and Souharda Samvardhana Samithi, “The Karnataka Souharda Sahakari Act–1997 (KSSA, 1997)” was passed in the legislature. With the consent of The President of India, it was enforced from January 2001.

3. Special Features of Karnataka State Souharda Federal Cooperative Ltd. (KSSFCL), Bangalore The formation of Karnataka State Souharda Federal Cooperative Ltd. (KSSFCL), under the aegis of The Karnataka Souharda Sahakari Act – 1997, has been a unique structure in the Indian Cooperative movement, wherein the statutory elected body for the Management of Federal. The KSSFCL has been formed as per provisions of the KSSAct, 1997 itself & it continues to strengthen the Souharda Cooperative movement in Karnataka.

When the souharda cooperatives get registered, the Membership to this Federal is automatic along with registration and there is no need not separate application for membership to KSSFCL. The exiting ‘Federation’ concept of cooperatives becoming members has not been successful on many dimensions, whereas Souharda Cooperatives getting directly nurtured under ‘Federal Structure’ has been a successful experiment and it has been replicated already in 13 states of India.

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The basic guidelines for the formation of Co-operatives under Karnataka Souharda Sahakri Act, 1997 are as follows:

  • Promoters meeting
  • Collecting initial share capital
  • Registration
  • Election to first Board
  • Beginning of activities

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