In the summer of 2012, a dairy farmer in Anand district, Gujarat, was told by a local cooperative officer that his society’s board could no longer have more than 21 directors. The farmer — a member of his village milk cooperative for over fifteen years — had never heard of the 97th Constitutional Amendment. Nobody explained what it meant for his voting rights, his access to audited accounts, or the five-year election cycle that was now supposedly guaranteed by the Constitution itself. A decade later, most cooperative society members across India still do not know what this amendment promised them, and fewer still know that the Supreme Court struck down its most critical provisions.
I have spent years covering India’s cooperative movement, and this remains one of the most consequential — yet least discussed — legal developments affecting over 29 crore cooperative members nationwide. Let me walk you through what actually happened, why it matters in 2026, and what every cooperative member deserves to understand.
Why a Constitutional Amendment for Cooperatives Was Deemed Necessary
By the mid-2000s, India’s cooperative sector was plagued by well-documented dysfunction. State governments routinely superseded elected cooperative boards, appointing bureaucrats or political loyalists to run societies. Elections were delayed for years — sometimes decades. In many states, cooperative societies had not been audited in over five years. Members had virtually no legal mechanism to demand transparency or accountability.
The Vaidyanathan Committee, which reviewed the revival of short-term rural cooperative credit structures, flagged deep governance failures. The National Policy on Cooperatives (2002) acknowledged the problems but lacked constitutional teeth. The idea of a constitutional amendment began gaining traction during UPA-I, and the 111th Constitution Amendment Bill was introduced in 2011. It was passed by Parliament and received Presidential assent on 12 January 2012, becoming the 97th Constitutional Amendment Act, 2011.
What the 97th Amendment Actually Promised Members
The amendment did three significant things. First, it modified Article 19(1)(c) of the Fundamental Rights chapter, adding the word “cooperatives” alongside unions and associations — effectively making the right to form cooperative societies a fundamental right. Second, it inserted Article 43B into the Directive Principles, directing the State to promote voluntary formation, autonomous functioning, and democratic control of cooperatives. Third — and this was the most ambitious part — it inserted an entirely new Part IXB into the Constitution, spanning Articles 243ZH to 243ZT.
Part IXB laid down detailed governance norms for every cooperative society in the country. Here is what it mandated:
| Provision | What It Meant for Members |
|---|---|
| Maximum 21 directors on any board | Prevented bloated, politically packed boards |
| Fixed 5-year term for elected boards | Guaranteed regular elections — no indefinite supersession |
| Elections within 6 months of board dissolution | Ended the practice of years-long administrator rule |
| Independent election authority in every state | Removed government control over cooperative election processes |
| Right to access books and records | Gave ordinary members a transparency mechanism |
| Mandatory annual audit | Required audited accounts within 6 months of financial year end |
| Reservation for SC/ST and women on boards | Brought social inclusion mandates to cooperative governance |
| Professional management for large cooperatives | Cooperatives with certain turnover required professional CEOs |
On paper, this was transformative. For the first time, a cooperative member in a Primary Agricultural Credit Society (PACS) in rural Bihar had the same constitutional governance guarantees as a member in a wealthy urban cooperative bank in Maharashtra.
The Supreme Court Ruling That Changed Everything
Here is where the story takes a turn that most cooperative members never heard about. In July 2021, a Supreme Court bench led by Justice Rohinton Fali Nariman delivered a landmark judgment that struck down Part IXB in its entirety — the very heart of the 97th Amendment’s governance framework.
The reasoning was procedural but devastating. Cooperative societies fall under Entry 32 of the State List in the Seventh Schedule. Any constitutional amendment that impacts subjects in the State List requires ratification by at least half the state legislatures under Article 368(2). When Parliament passed the 97th Amendment, this ratification was never obtained. The court ruled that Part IXB was therefore unconstitutional and void from inception.
The court, however, upheld the amendments to Article 19(1)(c) and Article 43B — meaning the right to form cooperatives as a fundamental right and the directive principle remain intact. But all the specific governance protections — term limits, mandatory elections, audit requirements, member access rights — vanished overnight.
What This Means for Members on the Ground in 2026
The practical consequences have been severe and largely invisible. Without the constitutional mandate for timely elections, several state governments have reverted to superseding boards and appointing administrators. According to NABARD‘s reports, approximately 30% of PACS across certain states were functioning without elected boards as of 2024. The Ministry of Cooperation, established in 2021, has pushed for reforms, but these remain legislative and policy-driven rather than constitutionally guaranteed.
Members of cooperative societies in states like Jharkhand, Bihar, and parts of Uttar Pradesh have reported that audit compliance has slipped. Without the constitutional backstop, state cooperative acts — many of them outdated — govern the sector unevenly. A sugar cooperative member in Maharashtra operates under a vastly different governance framework than a fisheries cooperative member in Odisha. The 97th Amendment was supposed to create a national floor of governance standards. That floor no longer exists.
The Gujarat Contrast: When Cooperative Governance Works
Gujarat offers an instructive counter-example. Even before the 97th Amendment, the state had relatively strong cooperative governance norms embedded in its state legislation. Amul and the broader Gujarat Cooperative Milk Marketing Federation (GCMMF) network had institutionalised regular elections, professional management, and audited transparency long before any constitutional mandate. When Part IXB was struck down, Gujarat’s cooperatives were barely affected — their state-level governance architecture was already robust.
Compare this with cooperatives in states where governance was entirely dependent on the constitutional provisions. In parts of Madhya Pradesh and Rajasthan, the striking down of Part IXB removed the only credible pressure point members had to demand elections and transparency. The lesson is uncomfortable: constitutional provisions matter most where governance is weakest, and those are precisely the places most affected by the Supreme Court’s ruling.
What Comes Next: The Multi-State Cooperative Societies Amendment Act
The central government has been active in filling the vacuum. The Multi-State Cooperative Societies (Amendment) Act, 2023 introduced stronger governance norms for cooperatives operating across state boundaries. The National Cooperation Policy, which has been under discussion, aims to create model guidelines that states can adopt. The Ministry of Cooperation has also been pushing the computerisation of PACS — approximately 63,000 PACS are targeted — which brings digital transparency even where legal mandates are weak.
Yet none of this replaces a constitutional guarantee. There have been murmurs within policy circles about a fresh constitutional amendment — one that follows the proper ratification procedure this time. Whether Parliament and at least fifteen state legislatures can align on cooperative governance norms remains an open question in 2026. The political will exists at the Centre, but states guard their cooperative sector jurisdiction fiercely.
What Every Cooperative Member Should Do Now
Back in Anand, the dairy farmer I mentioned at the start continued supplying milk to his village cooperative through all of these legal shifts. He told a local journalist in 2023 that he never understood why elections suddenly stopped being guaranteed or why the society’s audit reports became harder to access. His experience is not unique — it is the default experience across India’s cooperative landscape.
If you are a cooperative society member, I urge you to do three things. First, understand your state’s cooperative act — it is now the primary law governing your rights, not the Constitution’s Part IXB. Second, demand audited financial statements at every annual general meeting; this remains your right under state law in most jurisdictions. Third, engage with your district cooperative federation and push for elected governance. The 97th Amendment’s promise was sound. The procedure failed. But the principles it enshrined — transparency, accountability, democratic elections, member access — are not dead. They simply need cooperative members to fight for them through the institutions that remain.