SOCIAL CAPITAL CREATION IN INDIAN RURAL COOPERATIVES IN THE ERA OF GLOBALIZATION

In an era of globalization and the concomitant movement of capital to the most profitable destinations, Indian grassroots level, rural cooperatives-the Primary Agricultural Credit Societies - have been sought to be re-structured as subsidiaries of organised banking structures. The rationale for such restructuring lies in their evaluation as loss-making units in terms of financial metrics. This paper calls for assessing such cooperatives by using a different metric- that of Social Capital Creation. It seeks to study the social capital creation by Indian PACS for the period 1999-2011, by considering a macro-level, community-based interpretation of social capital, with its three important concepts being the degree of civic norms, trust and cohesion among members. Using two regression models, it was found that civic norms, trust and cohesion can indeed explain social capital creation in Indian PACS. The paper provides a starting point towards developing a different paradigm for assessment of cooperatives.