Article 243ZI gives the central government power to control co-operative societies.

It actually empowers *State* legislatures, not Parliament, since co-operative societies are mainly a State subject under the Constitution.

This Article and the rest of Part IXB are fully in force today exactly as written.

The Supreme Court in Union of India v. Rajendra N. Shah (2021) struck down most of Part IXB as applied to State (non-multi-State) co-operative societies for lack of required ratification by States, limiting its practical effect.

The Constitution of India

Article 243ZI

Incorporation of co-operative societies

Subject to the provisions of this Part, the Legislature of a State may, by law, make provisions with respect to the incorporation, regulation and winding up of co-operative societies based on the principles of voluntary formation, democratic membercontrol, member-economic participation and autonomous functioning.§

Why this exists

Co-operative societies (like farmers' credit unions, milk co-operatives, or housing societies) have long been important to India's rural and local economy, but many were criticized for government interference, weak elections, and poor member control. The 97th Constitutional Amendment (2011) added Part IXB (Articles 243ZH–243ZT) to give co-operatives constitutional protection and to push States to run them on democratic, autonomous, and member-driven lines, similar to how Panchayats and Municipalities got their own constitutional Parts.

How courts read it

In Union of India v. Rajendra N. Shah (2021), the Supreme Court examined the 97th Amendment that introduced Part IXB. The Court held that because 'co-operative societies' is a State subject (Entry 32, List II), provisions of Part IXB dealing with co-operative societies confined to a State needed ratification by half the States under Article 368(2), which had not been obtained. The Court struck down most of Part IXB's provisions to the extent they applied to State (non-multi-State) co-operative societies, while upholding them for multi-State co-operative societies, which fall under Union legislative competence. This ruling significantly affected how Article 243ZI and related Articles are understood and applied today.

Common misconceptions

Myth: Article 243ZI gives the central government power to control co-operative societies.
Fact: It actually empowers *State* legislatures, not Parliament, since co-operative societies are mainly a State subject under the Constitution.
Myth: This Article and the rest of Part IXB are fully in force today exactly as written.
Fact: The Supreme Court in Union of India v. Rajendra N. Shah (2021) struck down most of Part IXB as applied to State (non-multi-State) co-operative societies for lack of required ratification by States, limiting its practical effect.