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.


The earliest co-operatives were set-up among the weavers, in other words workers in cottage industries, who were the first and the hardest hit by the development of the mercantile economy and the industrial revolution.


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. Agricultural Credit Cooperative Society, of Kanaginahal village of Gadag District in Karnataka was the first cooperative Society formed under First Cooperative law of India. This was launched on 8th July 1905 by the villagers of Kanaginahal under the leadership of Shri Siddanagowda SannaRamanagaowda Patil with the initial share capital of Rupees two thousand.

But this had very limited scope covering just the credit cooperative Societies. Later in 1912, the British government enacted The Cooperative Societies Act, 1912 which had wider scope for other types of cooperative Societies to function. When the cooperatives were brought under the list of Provincial Governments in 1919, the Act of 1912 was a model for all provinces to enact their own Cooperative Act.

Although in pre-independence India, co-operative movement was spontaneous, various princely states did support the movement as engine for social and economic development. Predominant among these are the states of Mysore and Baroda. British India also followed suit. In post-independence India, co operative sector was considered as essentially to be faster for all-round economic growth, especially in rural and agrarian sectors.

In the post independence period, crores of rupees were spent on popularizing the Cooperative Movement and make it a successful venture. The Central Planning Commission realized that the cooperative sector failed with much less drastic change that was expected. The effort did not yield desired results due to:

  • Excessive dependence on State patronage
  • Uniform models without taking into account local and geographical factors
  • Interference fro bureaucracy
  • Political interference in election and organizational matters
  • Dictates of policy from national and international financial institutions

Because of this, the effort and the funds invested on cooperative sector went in vain and as this was realized, Committee on Cooperative Law (Ardhanareshwaran Committee) was formed. The Committee in its report in 1987 after studying declared that the Cooperative Movement has failed in the Country because of the heightened intervention of the Government in the affairs of the cooperatives.

Realising the need for the growth of the sector that promotes the economic development of the people requiring the voluntary participation in the affairs the planning commission formed another Commission under the able leadership of Sri. Choudhary Brahm Perkash. This Commission presented a model Cooperative Act in 1991. The Central Government circulated this model Act to all states with an advice to incorporate the same as it ensures more power to the members, more member participation and less government intervention in the affairs of the Cooperatives. The self regulatory mechanism is advised.

As a consequence of these ideas, the State Governments started legislating separate laws for such mutually aided autonomous co-operatives. Andhra Pradesh was the first state to enact such legislation (Mutually Aided Cooperative Societies Act, 1995) and Karnataka followed by promulgating the Karnataka Souharda Sahakari Act in 1997. (Karnataka Act 17 of 2000). The act came into force with effect from January 1 st , 2001

Although Karnataka was not the first state to legislate, it was in this state that cooperators enthusiastically embraced the new legislation. The first self-regulatory organization for such cooperatives was formed. We are proud to say that we are the first such self regulatory body for cooperatives in the country.

The central Government replaced Multi State Cooperative Societies Act, 1984 with Multi State Cooperative Societies Act, 2002, which is in the lines of Model Act.

Till date following states have the parallel cooperative Acts in their states:

  • Jammu and Kashmir
  • Uttaranchal
  • Orissa
  • Bihar
  • Jharkhand
  • Madhya Pradesh
  • Chhattisgarh
  • Andhra Pradesh


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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