Sahkar Se Samriddhi: India’s Cooperative Reforms Explained

Why in News?

The Ministry of Cooperation celebrated its 5th Foundation Day on 6 July 2026, highlighting major reforms aimed at strengthening India’s cooperative ecosystem.The Ministry was established on 6 July 2021 to make cooperatives more transparent, inclusive, digital and future-ready. Its broader vision is guided by “Sahkar Se Samriddhi”, meaning Prosperity through Cooperation.

India’s Cooperative Movement

• India’s cooperative movement is rooted in the idea of collective growth and mutual support. It reflects the spirit of Vasudhaiva Kutumbakam, where economic development is seen not merely as individual profit but as community prosperity.
• Cooperatives have played a major role in rural credit, dairy, fisheries, marketing, housing, storage and livelihood support. They help small producers gain access to credit, markets, inputs, technology and collective bargaining power.

In the present phase, cooperatives are being repositioned as instruments of:

• Inclusive growth
• Rural enterprise
• Women-led development
• Grassroots economic empowerment
• Food security
• Local value addition
• Self-reliant development

This makes the cooperative sector central to India’s vision of Viksit Bharat.

Cooperatives in India: Present Status and Emerging Role

India has one of the largest cooperative systems in the world. The country has more than 8.5 lakh cooperatives, serving nearly 32 crore members across about 30 sectors. Their network reaches almost 98% of rural India, making cooperatives one of the most widespread grassroots institutions in the country.

1. Strong Grassroots Economic Support

Cooperatives play an important role in supporting farmers, dairy producers, fishers, artisans and workers. They help these groups by improving access to credit, markets, storage facilities, livelihood opportunities and essential services.

2. Role in Women-led Development

Cooperatives have become an important platform for women’s empowerment. Nearly 10 crore women are connected with cooperatives through Self-Help Groups. This strengthens household income, financial security and community-level participation.

3. Wide Panchayat-level Presence

The cooperative sector has a strong village-level presence. Primary Agricultural Credit Societies are present in more than 2.55 lakh Gram Panchayats. Dairy cooperatives cover over 87,159 Gram Panchayats, while fisheries cooperatives cover nearly 29,964 Gram Panchayats.

4. Expansion into New Economic Sectors

Cooperatives are no longer limited to traditional rural credit. They are now expanding into retail, storage, healthcare, fuel, digital services, dairy, fisheries, exports, organic products, seeds and mobility services. This reflects their growing role in inclusive rural and economic development.

Revitalising PACS as Rural Growth Centres

• Primary Agricultural Credit Societies form the grassroots foundation of India’s short-term cooperative credit structure.
• Traditionally, PACS were mainly credit institutions. They are now being transformed into multi-service rural growth centres.
• Model bye-laws have enabled PACS in 32 States and Union Territories to undertake more than 25 business activities, including retail, storage, healthcare, fuel and digital services.

As of June 2026:

• 39,177 PACS are functioning as PM Kisan Samriddhi Kendras.
• 54,117 PACS are functioning as Common Service Centres.
• 394 PACS have applied for retail fuel outlets.
• 3 fuel outlets have been commissioned.
• 4,248 PACS have been approved for Jan Aushadhi Kendras.
• 843 Jan Aushadhi Kendras are ready to function.

This diversification improves access to essential services at the village level and makes PACS relevant beyond agricultural credit.

Digital Transformation of PACS

• Technology has become central to improving cooperative governance, transparency and efficiency.
• The financial outlay for computerisation of PACS has been increased to ₹2,925.39 crore in 2025, from the initial allocation of ₹2,516 crore in 2022.
• The timeline for computerisation of 63,000 PACS has been extended up to 31 March 2027.

Key progress includes:

• 79,630 PACS sanctioned for computerisation.
• 63,428 PACS currently using ERP software.
• Hardware delivered to more than 65,000 PACS.
• Online audits completed in more than 42,700 PACS.
• ERP software made available in 14 languages.

Digitalisation helps improve accounting, audits, reporting, transparency and service delivery. It can also reduce leakages and improve member confidence.

Expanding Grassroots Cooperative Coverage

• The government has focused on ensuring that every panchayat is connected to cooperative institutions.
• So far, 37,454 new multipurpose PACS, dairy cooperatives and fisheries cooperative societies have been registered.
• This expansion is important because many underserved areas lack institutional access to credit, inputs, storage, markets and livelihood support.
• A wider cooperative network can help rural communities participate more actively in local economic development.

Decentralised Grain Storage through Cooperatives

• The government is implementing the world’s largest decentralised grain storage plan through cooperatives.
• Godowns have been completed in 145 PACS, creating more than 68,702 metric tonnes of storage capacity.

This initiative can help farmers by:

• Reducing post-harvest losses
• Improving local storage access
• Reducing distress sale
• Enabling better market timing
• Strengthening food-security infrastructure

Decentralised storage also reduces pressure on distant warehouses and improves rural supply-chain efficiency.

Cooperatives and Farmer Producer Organisations

Cooperatives are being integrated with Farmer Producer Organisations to improve aggregation, processing, bargaining power and market access.

So far:

• 1,863 FPOs have been formed in the cooperative sector.
• 1,117 FPOs have been formed through PACS.
• 1,070 fisheries FPOs have been formed.
• ₹98 crore has been disbursed for fisheries FPOs.

This linkage can help small farmers and fishers access larger markets, better prices and improved value addition.

Tax Relief and Ease of Doing Business

Several tax and compliance reforms have been introduced to improve the financial health of cooperatives.

Key measures include:

• Surcharge reduced from 12% to 7% for cooperatives with income between ₹1 crore and ₹10 crore.
• Minimum Alternative Tax reduced from 18.5% to 15%.
• TDS cash withdrawal limit raised from ₹1 crore to ₹3 crore.
• Higher cash transaction limits for PACS and Primary Cooperative Agriculture and Rural Development Banks.

These measures improve liquidity, reduce compliance burden and support cooperative business expansion.

White Revolution 2.0

• The cooperative dairy sector is being strengthened under White Revolution 2.0.
• The initiative aims to increase milk procurement by 50% by 2028–29.
• So far, 25,282 dairy cooperative societies have been registered.

The focus is on:

• Women-led dairy cooperatives
• Wider cooperative coverage
• Better milk procurement systems
• Strengthening rural dairy livelihoods

This is significant because dairy cooperatives have historically played a major role in rural income generation and women’s participation.

New National Cooperative Institutions

Three national-level multi-state cooperative institutions have been established to strengthen exports, organics and seeds.

National Cooperative Exports Limited

• NCEL serves as an umbrella organisation for exporting surplus goods and services produced by cooperatives.
• As of June 2026, it recorded 15.4 lakh metric tonnes of exports worth ₹6,295 crore to 38 countries.

National Cooperative Organics Limited

• NCOL works for aggregation, procurement, certification, testing, branding and marketing of organic products.
• It has 14,286 member cooperatives.

Bharatiya Beej Sahakari Samiti Limited

• BBSSL undertakes production, procurement and distribution of quality seeds through the cooperative network.
• It markets seeds under the “Bharat Beej” brand and has 38,665 member cooperatives.
• These institutions can help cooperatives enter national and global value chains with stronger branding, certification and market access.

National Cooperative Development Corporation

• The National Cooperative Development Corporation has played a major role in financing cooperative growth.
• During FY 2025–26, NCDC sanctioned ₹1.55 lakh crore and disbursed ₹1.27 lakh crore.
• It also disbursed ₹2,320 crore to FPOs and Cluster-Based Business Organisations under the scheme for formation and promotion of 10,000 FPOs.
• This financing support is important for expanding cooperative infrastructure, business activities and rural enterprise.

Cooperative Education and Capacity Building

• The government has established Tribhuvan Sahkari University, India’s first cooperative university.

The university will support:

• Cooperative education
• Research
• Skill development
• Leadership training
• Professional management
• Training is also conducted through the National Council for Cooperative Training and NABARD.
• Capacity building is essential because cooperatives need professional governance, accounting, auditing, digital skills and market knowledge to compete with private players.

Urban Cooperative Banking Reforms

Urban Cooperative Banks are being modernised through digital tools and centralised platforms.

Sahakar CBS:

• A centralised Core Banking Solution for Urban Cooperative Banks.

Sahakar Sahyogi:

• An AI-powered conversational platform to improve banking operations and customer service.
• These reforms can improve customer experience, operational efficiency, transparency and regulatory compliance in Urban Cooperative Banks.

Bharat Taxi: Cooperative Mobility Platform

• Bharat Taxi is India’s first cooperative-based mobility platform under Sahakar Taxi Cooperative Limited.
• It is a driver-centric platform based on the cooperative model. Its objective is to economically empower drivers while offering affordable, safe and reliable transport services.
• It is operational in Delhi-NCR, Gujarat, Lucknow, Chandigarh, Mumbai, Jaipur and Kanpur.
• Its expansion is planned in Ranchi, Patna, Guwahati, Bhopal, Kolkata, Indore and Nagpur.
• This initiative shows that cooperatives are expanding beyond agriculture into modern service sectors and platform-based mobility.

Challenges

• Regulatory overlap creates confusion, weak coordination and supervision gaps.
• Weak governance reduces transparency, accountability and democratic functioning.
• Financial and infrastructure gaps limit access to capital, storage, cold chains and markets.
• Poor digital adoption affects accounting, online services and operational efficiency.
• Social barriers restrict participation of women and marginalised communities.
• Market competition from banks, fintech firms and private players weakens cooperatives.

Way Forward

• Harmonised regulation with better coordination among RBI, NABARD, states and the Ministry of Cooperation is needed.
• Transparent governance through regular elections, audits and active member participation must be ensured.
• Better financial support and investment in storage, cold chains and processing units should be promoted.
• Digital adoption through ERP systems, digital payments, online reporting and e-commerce linkages is necessary.
• Inclusive leadership should encourage women and marginalised communities in decision-making.
• Professional management and branding can improve competitiveness and market reach.

Conclusion

India’s cooperative sector is moving towards digital growth and wider expansion. Reforms in PACS, storage, dairy, fisheries, cooperative banking and models like Bharat Taxi show this change.The success of Sahkar Se Samriddhi depends on good governance, financial strength, technology use and member participation. A modern cooperative movement can support inclusive growth, rural prosperity and Viksit Bharat.