Recasting India’s Cooperative Movement for Inclusive Growth

Cooperative Idea and India’s Development Vision

Recasting India’s Cooperative Movement for Inclusive Growth: India’s cooperative movement is deeply rooted in collective welfare and community ownership. In 2025, the global focus on cooperatives offers India a strategic moment to strengthen this model for inclusive growth. The declaration of International Year of Cooperatives 2025 underlines the relevance of cooperatives in achieving balanced and participatory development.

Static GK fact: Cooperatives are member-owned, democratically governed institutions based on the principle of one member, one vote.

Historical Evolution of Cooperatives in India

The legal foundation of cooperatives in India was laid with the Cooperative Credit Societies Act, 1904. After Independence, cooperatives became instruments of decentralised planning, particularly in agriculture, credit and rural development. They were seen as tools to reduce exploitation and promote self-reliance.

Institutional support expanded over time with the creation of key financial and regulatory bodies. These steps integrated cooperatives into India’s broader development architecture while retaining their grassroots character.

Static GK Tip: Cooperatives fall under the State List, but multi-state cooperatives are governed by central legislation.

Institutional Strengthening and Policy Push

A major policy shift occurred with the establishment of the Ministry of Cooperation in July 2021. This move signalled focused national attention on reforming governance, improving transparency and resolving long-standing operational issues in the cooperative sector.

The guiding vision of Sahkar Se Samriddhi emphasises cooperation as a pathway to prosperity. It seeks to balance autonomy of cooperatives with professional management and regulatory clarity.

Scale and Reach of the Cooperative Ecosystem

India has over 8.5 lakh cooperative societies, with nearly 6.6 lakh operational units. These institutions reach about 98% of rural India and serve around 32 crore members across agriculture, dairy, fisheries, housing and women-centric activities.

Large national cooperatives coexist with thousands of village-level societies, ensuring last-mile economic participation. This scale gives cooperatives a unique advantage in delivering inclusive growth.

Static GK fact: India accounts for nearly one-fourth of the world’s cooperative institutions.

Reforming PACS for Modern Roles

Primary Agricultural Credit Societies (PACS) form the backbone of rural cooperatives. Recent reforms allow PACS to undertake more than 25 business activities, expand membership to women and marginalised groups, and adopt model bye-laws for better governance.

Digitalisation through ERP-based computerisation is linking PACS with cooperative banks and oversight institutions. This shift improves transparency, real-time accounting and multilingual service delivery.

Cooperatives as Service Delivery Platforms

PACS are increasingly functioning as multi-service rural hubs. Many operate as centres for agricultural inputs, digital services and welfare scheme delivery. This approach reduces transaction costs and strengthens the cooperative’s relevance in daily rural life.

Such integration also supports aggregation through producer collectives, improving market access while retaining farmer ownership.

Market Integration and Capacity Building

New national-level cooperative bodies have been created to support exports, organic produce and value addition. These institutions aim to move cooperatives from subsistence operations to competitive market participation.

Capacity building is being addressed through structured training and the establishment of a national cooperative university. Professionalisation is expected to improve governance quality and financial sustainability.

Static GK Tip: Education and training are core cooperative principles recognised globally.

Future Significance of the Cooperative Model

India’s alignment of cooperative reforms with International Year of Cooperatives 2025 reflects a broader reimagining of the sector. Digital tools, expanded mandates and institutional support are reshaping cooperatives into modern, community-rooted enterprises.

In the face of rural distress and economic uncertainty, cooperatives offer a model that combines growth with equity and participation.

Static Usthadian Current Affairs Table

Recasting India’s Cooperative Movement for Inclusive Growth: