Are Cooperatives Really Alive?
An Institution in the Records. What Does It Mean in People’s Lives?
An inquiry by a cooperative-sector practitioner into West Bengal, India and the international experience of measuring institutional life beyond registration and administrative labels.
A cooperative may remain registered while its economic activity weakens. Members may no longer participate as they once did. Governance can become fragile, audits may fall behind, and records and institutional memory may erode. Yet the same society may still appear as “functional” in an administrative database.
This is not a merely semantic question. India’s cooperative movement is an enormous institutional landscape—not simply a count of societies or members. According to the National Cooperative Database (NCD) snapshot dated 15 July 2026, India had 853,430 registered cooperative societies. Around 662,811–662,812 were classified as functional, 141,442 as non-functional and 49,177 as under liquidation. Among functional societies, 355,680 were reported as profit-making, 250,442 as loss-making, while financial information was unavailable for 56,689. Government releases may differ by one in the reported functional total; the underlying source should be checked when reproducing the figure.
Source: Government of India, Ministry of Cooperation / Press Information Bureau, NCD snapshot dated 15 July 2026.
1. From counting cooperatives to understanding institutional life
The National Cooperative Database has strengthened the ability to view India’s cooperative sector as a structured institutional population. Ministry of Cooperation information describes the NCD as collecting and updating parameters such as status, membership and activities, with work also progressing towards integration with state Registrar systems.
This is a substantial advance. But a database classification and an institution’s lived condition are not the same thing. A society can be legally registered but operationally inactive; operational but financially weak; commercially active but thin on member participation; or formally governed by a board whose democratic and institutional vitality has diminished.
2. “Functional” matters—but it is not the whole picture
The 2026 NCD snapshot also highlights an audit distinction: government information reported about 595,000 functional societies as audited and about 68,000 as unaudited. These figures should be read within the scope and date of the relevant release.
Functional does not automatically mean financially healthy. “Functional” is an administrative classification. On its own, it does not fully describe profitability, audit completion, governance quality, member participation or institutional continuity.
To understand a society’s condition, further questions are needed:
- Is it actually providing services or conducting member-facing activities?
- What do its financial activities and performance show?
- Are audits completed regularly, and are accounts current?
- Are the General Body and governance mechanisms active in practice?
- Do members participate in decision-making?
- Are annual returns and statutory records up to date?
- Has the institution preserved its records and administrative memory?
3. The law recognises that registration is not perpetual institutional life
In West Bengal, Section 108 of the West Bengal Co-operative Societies Act, 2006 includes grounds for the Registrar to initiate dissolution proceedings in circumstances such as a society failing to commence work within 24 months of registration, or failing to carry on business or function for two consecutive years.
A critical legal distinction must be maintained. It would be inaccurate to say that a society automatically becomes legally dissolved the moment it stops working for a long period. The Act provides a statutory process, including notice and consideration before a dissolution order. Operational inactivity and formal legal dissolution are therefore not the same event.
4. Dormant and dissolved are not synonyms
The reporting framework in the West Bengal Co-operative Societies Rules, 2011 distinguishes categories such as viable, potentially viable, defunct and dormant in particular contexts, especially for PACS/FSS/LAMPS. In the relevant reporting note, “dormant” refers to a society that was non-working during the year, while “defunct” refers to a society marked for liquidation.
Non-functional ≠ under liquidation
These are not merely differences in wording. A database label and a formal legal process represent different kinds and levels of information.
5. An international question: what, exactly, are we measuring?
This is not only an Indian problem. The International Labour Organization (ILO) adopted an international statistical standard on cooperative statistics in 2018. Its second-edition guide, published in 2025, addresses cooperative types, statistical units, work in and around cooperatives, and methods for comparable data collection, tabulation and analysis.
The ILO notes that reliable and comparable statistics on cooperatives remain limited in many countries. The next stage of cooperative statistics is therefore not simply to collect more numbers. It also requires clarity about definitions, statistical units and the evidence used to measure them.
6. The problem is larger than “inactive cooperatives”
It may be tempting to call all 141,442 non-functional societies “dead cooperatives”. Research should resist that shortcut. One society may remain legally registered but inactive; another may be in a formal liquidation process; another may retain a realistic possibility of revival.
The research question should instead be: How many distinct institutional conditions are concealed within the administrative categories functional, non-functional, dormant and under liquidation?
7. A cooperative may be vital in one dimension and weak in another
Institutional life should be understood as multidimensional. A cooperative may have legal existence but little operational activity; it may conduct transactions without being economically sustainable; it may remain economically active while democratic participation deteriorates.
This article proposes an analytical framework called Cooperative Institutional Vitality. It is not a statutory category, official government index or validated score. It is a proposed model for research and discussion.
8. Why this framework is not being presented as a “new theory”
Cooperative scholarship already contains important research on organisational life cycles, degeneration, regeneration, governance, identity and institutional sustainability. A 2026 semi-systematic review mapping 90 studies of worker cooperatives published between 1983 and 2025 identified four analytical dimensions for degeneration and regeneration: institutional environment; organisational governance; organisational culture and leadership; and member identity.
The potential contribution here is not the claim that cooperatives have life cycles or can degenerate and regenerate—those ideas are already present in the literature. The contribution is a measurement-oriented question: Is administrative status enough to understand a cooperative’s institutional vitality, or must legal, operational, economic, governance and continuity evidence be read together?
9. Administrative status is not the same as institutional state
The NCD may classify a society as functional. A legal record may show that its registration remains in force. Audit records may show whether accounts have been audited. Financial statements may reveal economic condition. General Body records may provide evidence about member participation.
Read together, these sources can support a more robust assessment of institutional condition. No single field can fully represent the life of an institution. This distinction does not invalidate administrative categories; it clarifies what they can—and cannot—tell us.
10. The NCD should not be underestimated
The limits of administrative classification do not reduce the importance of the NCD. On the contrary, it creates a major research opportunity by offering a structured national picture of a very large cooperative population. If integration with state Registrar systems advances, including through API-based approaches, researchers may eventually be able to study institutional trajectories rather than relying only on static snapshots.
11. Time may be one of the most important variables
Imagine two societies that are both classified as non-functional today. One stopped operating six months ago; the other has been inactive for twenty years. The administrative label is the same, but their institutional conditions may be profoundly different.
Future research therefore needs more than current status. It should ask:
| Research question | Evidence needed |
|---|---|
| What is the current position? | Current administrative and legal status |
| For how long? | Duration of inactivity or the current status |
| What came before? | Previous status and operating history |
| Why did the change occur? | Cause and institutional context, where evidence exists |
| What happened next? | Revival, continued inactivity, liquidation or dissolution |
12. What might a future Cooperative Institutional Vitality dataset contain?
| Dimension | Potential evidence |
|---|---|
| Legal | Registration, legal status, dissolution and liquidation proceedings |
| Operational | Transactions, services, production, procurement and member-facing activities |
| Economic | Revenue, surplus or loss, assets and liabilities |
| Governance | General Body meetings, board, elections and member participation |
| Audit | Audit completion, pending years and audit classification |
| Compliance | Annual returns and statutory filings |
| Continuity | Records, management continuity and administrative capacity |
| Temporal | Dates of status changes and institutional trajectory |
| Recovery | Revival or reactivation after inactivity |
This is a proposed analytical structure for future research, not an official government dataset.
13. Why West Bengal could be an important research setting
West Bengal’s Act and Rules offer a useful statutory lens for examining institutional status. The Rules contain reporting distinctions for certain categories of cooperatives, while the Act recognises prolonged non-functioning as a possible statutory ground for dissolution after due process.
This creates scope for a longitudinal study tracing a pathway such as:
If researchers can track which societies revive, which remain dormant for long periods and which move towards liquidation, the empirical understanding of cooperative institutional life could become much stronger.
14. A policy principle: diagnosis before decision
The evidence does not support a blanket conclusion that every non-functional society should be closed, or that every one should be revived. Institutional causes may differ. A society may have become inactive because of a temporary governance problem; another may face a substantial audit backlog; another may retain a viable membership base; yet another may have an economic purpose that is no longer realistic.
The policy question should be: Why has this society stopped functioning, for how long, what institutional capacity remains, and is there a realistic pathway to revival?
15. From the fascination with numbers to institutional evidence
India is entering a new phase in cooperative statistics. But larger numbers do not automatically produce deeper understanding. A database can count a society; it cannot automatically read the institutional life inside it. A classification can report status; it cannot by itself explain the history behind that status.
Institutional context must therefore accompany statistics. The ILO’s work on cooperative statistics similarly underscores the need for reliable, coherent and internationally comparable data.
16. What is the institutional life of a cooperative?
A cooperative is not merely a registered legal entity. It is also an organisation, an economic institution, a member-owned structure, a governance system, a custodian of records and, in many places, part of local institutional history.
When a cooperative becomes inactive, the consequences may extend beyond the cessation of transactions. Member relationships may weaken, local knowledge may disappear, reconstructing records may become difficult, and years of institutional memory may be fragmented. That is why institutional vitality must be examined beyond legal existence alone.
17. The central proposition
A cooperative’s full institutional life cannot be understood from legal registration or a single functional/non-functional classification alone. Assessing institutional vitality requires the combined consideration of legal, operational, economic, governance and institutional-continuity evidence.
This proposition does not seek to abolish existing administrative categories. It is an attempt to clarify what those categories can tell us, what they leave unanswered, and how a more evidence-rich assessment might be developed. The proposed framework requires empirical testing and validation before it can be used as a measurement instrument.
18. The question needs to change
India has built a vast cooperative institutional landscape. The National Cooperative Database has made that landscape more visible at the national level. The next research step should not be limited to collecting more numbers; it should also seek to understand the institutional realities inside those numbers.
The next advance in cooperative statistics may lie here: not merely counting institutions, but understanding their institutional life.
Research limitations
This article does not treat NCD administrative classifications as equivalent to institutional health. Cooperative law, reporting practice, sector composition and classification may vary between states; therefore, state-level raw counts have not been used to rank jurisdictions as “better” or “worse”. NCD snapshots are not interpreted here as longitudinal trends, because historical comparability requires separate verification of coverage and classification consistency.
“Cooperative Institutional Vitality” is a proposed analytical framework, not a government statutory category, official index or validated score. Its next stage would require empirical operationalisation, testing and validation. The numerical figures cited above reflect the identified government snapshot and should be checked against the original releases before reuse in formal research.
Sources and research notes
- Ministry of Cooperation / Press Information Bureau, Government of India: National Cooperative Database snapshot, 15 July 2026.
- Ministry of Cooperation / Press Information Bureau: Government release on audit status of cooperative societies.
- Government of West Bengal: West Bengal Co-operative Societies Act, 2006.
- Government of West Bengal: West Bengal Co-operative Societies Rules, 2011.
- International Labour Organization: Measuring Cooperatives: An information guide on the ILO Guidelines concerning Statistics of Cooperatives, 2nd edition, 2025. DOI: 10.54394/PJNI8698.
- International Cooperative Alliance: Cooperative Identity.
- Comptroller and Auditor General of India: Kerala CAG Report No. 11 of 2025. The cited dormant-society observations relate to selected/test-checked Kerala taluks and must not be generalised to West Bengal or India as a whole.
This article combines public administrative data, statutory material and a proposed research framework. Interpretive propositions are identified as such; they should not be mistaken for official classifications or validated empirical findings.