Explore India’s cooperative movement in 2025, its reforms, PACS digitalisation, Sahkar Se Samriddhi vision, and global relevance in the International Year of Cooperatives.
India’s Cooperative Movement in 2025: From Collective Ethos to Engines of Inclusive Growth
India’s cooperative movement is deeply rooted in the civilisational philosophy of Vasudhaiva Kutumbakam—the belief that the world is one family. This idea has historically shaped India’s understanding of economic life, where prosperity is meaningful only when it is shared. In 2025, as the world observes the International Year of Cooperatives, India’s renewed policy focus under the vision of “Sahkar Se Samriddhi” marks a decisive effort to reposition cooperatives as drivers of inclusive growth, rural transformation, and grassroots democracy.
This moment is not merely symbolic. It reflects a strategic attempt to align India’s vast cooperative ecosystem with contemporary challenges such as rural distress, market volatility, climate change, and employment generation, while preserving the cooperative spirit of mutual aid and democratic participation.
Why Cooperatives Matter in a Changing Global Context
Cooperatives are fundamentally different from conventional enterprises. They are member-owned, member-controlled, and member-benefiting institutions that combine economic activity with social purpose. The International Cooperative Alliance defines cooperatives as autonomous associations of persons united voluntarily to meet common economic, social, and cultural needs through jointly owned and democratically controlled enterprises.
Their global relevance has gained renewed recognition with the United Nations declaring 2025 as the International Year of Cooperatives, under the theme “Cooperatives Build a Better World”. This declaration highlights cooperatives as critical instruments for achieving the Sustainable Development Goals (SDGs) by 2030—especially goals related to poverty reduction, decent work, gender equality, and sustainable communities.
For India, this global spotlight coincides with a crucial domestic policy phase. With more than one-fourth of the world’s cooperatives and unparalleled rural penetration, the cooperative model fits naturally with India’s development priorities of inclusion, decentralisation, resilience, and local self-governance.
From Colonial Credit Societies to Pillars of Decentralised Development
The cooperative idea in India gained legal recognition during the colonial period with the Cooperative Credit Societies Act, 1904, introduced to address rural indebtedness and exploitative moneylending. After Independence, cooperatives were consciously promoted as tools of decentralised planning, particularly in agriculture, rural credit, and marketing.
Several institutional milestones strengthened this ecosystem:
- The establishment of the National Cooperative Development Corporation in 1963 to support cooperative-based development projects.
- The creation of the National Bank for Agriculture and Rural Development in 1982, which became the apex institution for rural credit and cooperative bank supervision.
A transformative shift came in July 2021 with the creation of a dedicated Ministry of Cooperation, signalling focused national attention to revitalising and reforming the sector. This move recognised cooperatives not as peripheral institutions, but as central actors in India’s development architecture.
The Scale of India’s Cooperative Ecosystem Today
According to the National Cooperative Database, India today has over 8.5 lakh cooperative societies, of which around 6.6 lakh are operational. These institutions collectively:
- Cover nearly 98% of rural India
- Serve about 32 crore members
- Operate across agriculture, dairy, credit, housing, fisheries, handloom, women’s welfare, and services
Iconic cooperatives such as Amul coexist with large national federations like Indian Farmers Fertiliser Cooperative and Krishak Bharati Cooperative, alongside thousands of Primary Agricultural Credit Societies (PACS). Together, they form a dense grassroots network that links farmers, artisans, and workers to markets while anchoring livelihoods at the village level.
Reforming PACS: Transparency, Technology, and Expanded Roles
A cornerstone of recent cooperative reforms has been the effort to make PACS economically viable and institutionally credible. New model bye-laws now enable PACS to:
- Undertake more than 25 business activities beyond credit
- Expand membership to women and SC/ST communities
- Strengthen internal governance and democratic functioning
Most States and Union Territories have aligned their legal frameworks with these reforms, ensuring uniformity and flexibility.
Equally transformative is the digital overhaul of PACS. A nationwide ERP-based computerisation project is integrating PACS with cooperative banks and NABARD. This enables:
- Real-time accounting and auditing
- Online transparency and multilingual access
- Reduction in leakages and delays
This digital push is not merely about efficiency; it aims to rebuild trust and reposition PACS as modern rural service institutions rather than legacy credit outlets.
Cooperatives as Last-Mile Service Delivery Hubs
PACS are increasingly becoming key nodes in the delivery of government services. Across many States, they now function as:
- Pradhan Mantri Kisan Samriddhi Kendras
- Common Service Centres (CSCs)
- Jan Aushadhi Kendras for affordable medicines
- Fuel retail points and fertiliser distribution centres
In many villages, the cooperative has emerged as a one-stop interface for credit, farm inputs, digital services, and welfare schemes. This multipurpose model is complemented by the promotion of Farmer Producer Organisations (FPOs) and Fish Farmer Producer Organisations (FFPOs) within the cooperative framework, strengthening aggregation, processing, and market access while retaining farmer ownership.
Building Resilience through Storage, Dairy, and Agri-Markets
One of the most ambitious initiatives is the world’s largest decentralised grain storage plan in the cooperative sector. By creating godowns, processing units, and fair price shops at the PACS level, the plan aims to address chronic rural storage shortages and reduce post-harvest losses.
Parallelly, White Revolution 2.0 seeks to expand dairy cooperatives into uncovered regions, increase milk procurement, and enhance incomes—especially for women producers, who form the backbone of the dairy economy.
Efforts to link cooperatives with assured procurement of pulses and maize at MSP reflect a broader strategy of using cooperative networks to stabilise farm incomes while encouraging crop diversification and nutritional security.
New National Cooperatives and the Push towards Markets and Exports
The creation of new apex multi-state cooperatives marks a structural shift in India’s cooperative strategy. Institutions such as:
- National Cooperative Exports Limited
- National Cooperative Organics Limited
are designed to aggregate produce, ensure quality standards, and connect cooperatives to domestic and global markets. This represents a transition from subsistence-oriented cooperation to market-integrated, brand-driven cooperative enterprises, capable of competing globally while protecting member interests.
Investing in Capacity, Skills, and Institutional Credibility
Recognising that strong institutions require skilled leadership, India has established its first national cooperative university—Tribhuvan Sahkari University—to professionalise cooperative management through education, training, and research.
Large-scale capacity-building programmes for PACS members and board representatives are addressing long-standing governance gaps. Financial reforms such as tax rationalisation, higher cash transaction limits for PACS, and revival packages for cooperative sugar mills further aim to restore competitiveness and sustainability.
Why the Cooperative Moment Matters for India’s Future
As India aligns its cooperative reforms with the International Year of Cooperatives 2025, the deeper significance lies in reimagining cooperatives for the 21st century. No longer seen as relics of a planned economy, cooperatives are being reshaped into agile, digitally enabled, community-rooted enterprises.
In an era marked by rural stress, climate uncertainty, and employment challenges, the cooperative model offers India a distinctive development pathway—one that blends economic efficiency with social solidarity, market participation with democratic control, and growth with inclusion. If sustained with transparency, professionalism, and member participation, cooperatives can remain one of India’s most powerful instruments for equitable and resilient development.
