Achievements of Cooperatives in India

• 20 Jan 2026

For Prelims: Cooperative Sector, United Nations, National Co-operative Exports Limited (NCEL), National Cooperative Organics Limited (NCOL), National Cooperative Development Corporation (NCDC), National Cooperation Policy (NCP) 2025, White Revolution 2.0, Farmer Producer Organization, Kisan Credit Card (KCC), MAT, Sahakar Taxi, GeM Portal, 97th Constitutional Amendment Act, 2011, Capital Adequacy, MUDRA, CGTMSE,  NABARD, MSMEs.             

For Mains: Current status of cooperatives in India and provisions regarding cooperatives. Key achievements of cooperatives, associated challenges and way forward. 

Source: PIB 

Why in News?

India’s achievements in the cooperative sector gained global recognition when the United Nations proclaimed 2025 as the International Year of Cooperatives (IYC) under the theme “Cooperatives Build a Better World.” 

• India’s cooperative movement is inspired by "Vasudhaiva Kutumbakam"—the world as one family—and is driven by the vision of "Sahkar Se Samriddhi" (Prosperity Through Cooperation), focusing on collective well-being and community-centric development. 

Summary 

• India's vast cooperative network is being modernized via digital PACS, new national co-ops (NCEL, NCOL), and a dedicated Ministry. 
• It faces deep-rooted governance, regulatory, and financial challenges that hinder inclusive growth. 
• Success hinges on technological integration, financial innovation, and resolving regulatory fragmentation to achieve "Sahkar Se Samriddhi." 

What is the Current Status of Cooperatives in India? 

• Massive Scale and Deep Penetration: India has over 8.5 lakh cooperatives that serve nearly 32 crore members across 30 sectors and cover about 98% of rural India. 
  • Nearly 10 crore women are linked to cooperatives through Self-Help Groups (SHGs), highlighting the sector’s role in women-led development. 
• Strategic Expansion into New Areas: The registration of over 32,000 new multipurpose, dairy, and fisheries cooperatives demonstrates a significant push to expand the sector beyond traditional credit.  
  • This expansion is strategically reinforced by establishing national-level cooperatives—such as National Co-operative Exports Limited (NCEL), National Cooperative Organics Limited (NCOL), and Bharatiya Beej Sahakari Samiti Limited (BBSSL)—to integrate Indian cooperatives into high-value supply chains. 
• Strong Financial and Institutional Support: National Cooperative Development Corporation (NCDC) disbursements are massive (over Rs 95,000 crore annually), providing the necessary capital for growth.  
  • Policy focus is further strengthened by the new Ministry of Cooperation and by leveraging cooperatives for large-scale national projects, such as the world's largest decentralized grain storage plan. 

What are the Key Initiatives and Achievements in India's Cooperative Sector? 

Strategic Area	Key Initiative	Major Achievement / Current Status
Policy & Governance	Launch of National Cooperation Policy (NCP) 2025	Provides a decadal strategic roadmap for revitalizing and modernizing cooperatives.
Expansion & Diversification	White Revolution 2.0 (Dairy Expansion)	20,070 new Dairy Cooperative Societies registered across 31 States/UTs.
	Formation of Fish Farmer Producer Organization (FFPOs)	NCDC has facilitated the formation of 1,070 Fish Farmer Producer Organization (FFPO).
Financial Strengthening & Inclusion	RuPay Kisan Credit Card (KCC) Pilot in Gujarat	Over 22 lakh KCCs issued; Rs 10,000+ cr loans disbursed to farmers.
Market Linkages & Exports	National Cooperative Organics Ltd. (NCOL)	Markets 28 products under "Bharat Organics".
	Bharatiya Beej Sahakari Samiti Ltd. (BBSSL)	31,605 member coops; distributes "Bharat Beej" seeds.
Infrastructure Development	Decentralised Grain Storage Plan (World's Largest)	Godowns built in 112 PACS; 68,702 Metric Tonne capacity created; expanded to all cooperative societies.
Atmanirbharta in Agriculture	Atmanirbharta Abhiyan for Pulses & Maize	54.74 lakh farmers & 56,673 PACS/FPOs registered; 9.08 LMT pulses & 45,105 MT maize procured.
Institutional Development	Tribhuvan Sahkari University (TSU)	India's first national cooperative university established; academic programs launched.
Innovative Projects	Sahakar Taxi Cooperative Ltd.	First cooperative-led mobility platform; 1.5 lakh drivers & 2 lakh customers registered in trial.
	Cooperatives on GeM Portal	721 cooperatives onboarded as buyers; Rs 396.77 cr in transactions completed.

Cooperatives 

• About: A cooperative is a voluntary and democratic organization that fulfills the shared economic, social, and cultural needs of its members through a jointly-owned enterprise, operating on the principle of “one member, one vote.” 
• Constitutional Recognition: The 97th Constitutional Amendment Act, 2011 gave cooperatives constitutional status by introducing key provisions: 
  • Article 19(1)(c): Grants citizens the right to form cooperative societies. 
  • Article 43B: Directs the State to promote cooperative societies as a part of the Directive Principles of State Policy (DPSPs). 
  • Part IXB (Articles 243ZH–243ZT): Establishes a governance framework for cooperatives. 
• Legal Structure and Regulatory Oversight: India's cooperatives are regulated under a dual constitutional and administrative structure.  
  • State-level cooperatives fall under the State List and are governed by individual State laws under the supervision of State Registrars. 
  • Multi-state cooperatives fall under the Union List and are regulated by the central Multi-State Cooperative Societies (MSCS) Act, 2002 under the supervision of the Central Registrar. 
• Geographic Distribution: It has a concentrated geographical spread. Maharashtra alone accounts for over a quarter of all cooperatives. Collectively, the top five states, Maharashtra, Gujarat, Telangana, Madhya Pradesh, and Karnataka, constitute 57% of the national total. 
• National Cooperation Policy 2025: It replaces the 2002 policy and provides a long-term roadmap for cooperative growth from 2025 to 2045. Key objectives include: 
  • Establishing 2 lakh new multipurpose Primary Agricultural Credit Societies (M-PACS). 
  • Leveraging schemes like Dairy Infrastructure Development Fund (DIDF), PM Matsya Sampada Yojana (PMMSY), and the National Programme for Dairy Development (NPDD). 
  • Promoting cooperative education through Tribhuvan Sahkari University (Anand, Gujarat). 
• Notable Cooperatives in India: AMUL (Anand Milk Union Limited), IFFCO (Indian Farmers Fertiliser Cooperative), Lijjat Papad (Shri Mahila Griha Udyog Lijjat Papad), etc.

What are the Primary Challenges Faced by the Cooperative Sector in India? 

• Regulatory Fragmentation: A major conflict exists where the Registrar of Cooperatives (state authority) manages incorporation, administration, and liquidation, while the Reserve Bank of India (RBI) controls banking licenses and prudential norms like capital adequacy. This leads to jurisdictional disputes, inconsistent supervision, and regulatory gaps. 
• Governance Deficits: A lack of transparency and genuine democratic practice in many cooperatives leads to elite control, poor accountability, and the marginalization of member voices. E.g., the Punjab and Maharashtra Cooperative (PMC) Bank collapse in 2019 was directly linked to financial irregularities and internal control failures. 
• Financial Constraints and Underdeveloped Infrastructure: Many institutions fail to maintain sufficient capital buffers, impairing their ability to absorb losses, withstand economic stress, or fund expansion. A critical shortage of storage facilities, processing units, and market linkages hampers the growth and competitiveness of agricultural and rural cooperatives. 
• Operational and Technological Hurdles: A significant digital divide exists, with many rural cooperatives lacking modern digital accounting, ERP systems, and e-commerce platforms.  Poor physical connectivity and weak logistics in states like Uttar Pradesh and Bihar limit the efficiency and geographic expansion of cooperative networks. 
• Socio-Cultural Barriers: Pre-existing social hierarchies, caste-based divisions, and structural inequalities create barriers to equitable participation and representation within cooperatives, contradicting their inclusive ethos. 
• Intense Market Competition: Cooperatives struggle to retain customers against commercial banks, small finance banks, and fintech companies that offer more sophisticated products and services. 

What Measures are Needed to Strengthen Cooperatives in India? 

• Technological Integration: Implement mobile banking, online account opening, and digital payment systems to attract tech-savvy members and improve operational efficiency. Roll out common ERP software, digital financial reporting systems, and e-commerce integration (with platforms like ONDC and GeM) to streamline operations and expand market reach. 
• Financial Deepening: Financial cooperatives should move beyond basic savings/credit to offer investment products, insurance, and financial literacy programs, helping members achieve comprehensive financial health.  
  • Formally link cooperatives to existing government schemes like MUDRA, CGTMSE, and NABARD initiatives to improve credit flow to member MSMEs. 
• Institutional Strengthening: Implement structured training, skill-building workshops, and clear career pathways to build a cadre of professional managers for cooperatives. 
• Value Chain Development: Prioritize public and cooperative investment in infrastructure like warehouses, cold storage, and Common Facility Centers to reduce waste and improve market access. Furthermore, establishing member-owned logistics cooperatives can reduce supply chain costs and enhance efficiency. 
• Branding and Diversification: Develop and promote strong umbrella brands (e.g., "CoopMade" or "Bharat Organics") with certification to command premium prices and ensure quality. Actively promote cooperative models in eco-tourism, renewable energy, cutting-edge agriculture (like hydroponics), and digital services to reposition them as innovative hubs. 

Conclusion 

India's cooperative sector is undergoing a transformative digital and strategic expansion. To realize its full potential for inclusive prosperity, it must urgently address persistent challenges in governance, finance, and competition while leveraging policy, technology, and member participation. 

Drishti Mains Question

Examine the major challenges faced by the cooperative movement in India and suggest institutional reforms.

Frequently Asked Questions (FAQs) 

1. What is the International Year of Cooperatives 2025? 
The UN designated 2025 as the International Year of Cooperatives to highlight cooperatives’ role in sustainable development under the theme “Cooperatives Build a Better World.” 

3. What is the constitutional status of cooperatives in India? 
The 97th Constitutional Amendment (2011) granted cooperatives constitutional recognition by adding Article 19(1)(c) and Article 43B, and introducing Part IXB (Articles 243ZH–243ZT) for governance. 

3. What is the National Cooperation Policy 2025? 
The National Cooperation Policy 2025 provides a roadmap for cooperative growth till 2045, aiming to establish 2 lakh new M-PACS and strengthen cooperative education and infrastructure. 

UPSC Civil Services Examination, Previous Year Question (PYQ)  

Prelims 

Q. With reference to ‘Urban Cooperative Banks’ in India, consider the following statements: (2021)

1. They are supervised and regulated by local boards established by State Governments.  
2. They can issue equity shares and preference shares.  
3. They were brought under the purview of the Banking Regulation Act, 1949, through a 1966 Amendment.  

Which of the above statements are correct? 

(a) 1 only  

(b) 2 and 3 only  

(c) 1 and 3 only  

(d) 1, 2 and 3 

Ans: (b)

Q. In India, which of the following have the highest share in the disbursement of credit to agriculture and allied activities? (2011) 

(a) Commercial Banks   

(b) Cooperative Banks   

(c) Regional Rural Banks   

(d) Microfinance Institutions  

Ans: (a)

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Mains 

Q. “In the Indian governance system, the role of non-state actors has been only marginal.” Critically examine this statement. (2016)

Q. “In the villages itself no form of credit organisation will be suitable except the cooperative society.” – All India Rural Credit Survey. Discuss this statement in the background of agricultural finance in India. What constraints and challenges do financial institutions supplying agricultural finance face? How can technology be used to better reach and serve rural clients? (2014)