Sahkar Se Samriddhi: Five Years of Cooperative Reforms in India

Source: PIB
GS II: Government Policies and Interventions, GS III: Agriculture, Storage, Transport and Marketing of Agricultural Produce and Issues and Related Constraints, Inclusive Growth

Overview

1. News in Brief
2. Ministry of Cooperation: Objectives and Significance
3. Transforming Primary Agricultural Credit Societies
4. Decentralized Grain Storage and Farmer Empowerment
5. Strengthening Farmer Producer Organizations and Dairy Cooperatives

Why in the News?

The 5th Foundation Day of the Ministry of Cooperation was celebrated on July 6 2026.

News in Brief

• The Ministry of Cooperation marked five years since its establishment in 2021, to strengthen India’s Cooperative Movement.
• The Ministry showcased key reforms and achievements aimed at modernising and expanding the cooperative sector across the country.
• The initiatives are guided by the vision of “Sahkar Se Samriddhi ” (Prosperity through Cooperation), focusing on inclusive rural development, farmer empowerment and economic growth through cooperatives.

Ministry of Cooperation: Objectives and Significance

• The Ministry provides focused policy support to strengthen cooperative institutions across India.
• It promotes cooperative-led economic development by improving the ease of doing business, encouraging professional management, and modernizing cooperatives through digital technology, transparent governance, and capacity building.
• Its objective is to build competitive, financially sustainable cooperatives that meet the economic needs of rural communities.

Cooperative Movement in India

• A cooperative is a voluntary association where members jointly own and democratically manage an enterprise to meet common economic, social, and cultural needs.
• Unlike profit-driven business models, cooperatives are based on the principles of voluntary membership, democratic control, equality, self-help, and mutual benefit, promoting inclusive growth, social equity, community welfare, and grassroots democracy.
• In India, they play a vital role in sectors such as agriculture, dairy, fisheries, housing, rural credit, marketing, consumer services, fertilizers, and sugar, while improving financial inclusion, market access, and rural livelihoods.

Transforming Primary Agricultural Credit Societies

• One of the Ministry’s major achievements has been the modernization of Primary Agricultural Credit Societies (PACS).
• The introduction of e-PACS, digitization through computerization, Enterprise  Resource planning systems (ERP), digital accounting, and online auditing has improved transparency, accountability, and operational efficiency.
• The availability of digital platforms in multiple Indian languages has further enhanced accessibility for members across diverse regions.
• These reforms have reduced delays, improved financial management, and strengthened public trust in cooperative institutions.

PACS as Multi-Service Rural Institutions

• The role of PACS has expanded significantly beyond providing agricultural credit.
• They are now emerging as integrated rural service centres offering banking facilities, agricultural inputs such as fertilizers and seeds, retail services, fuel distribution, healthcare support, storage infrastructure, and digital public services.
  • The adoption of model bye-laws by States and Union Territories has facilitated this diversification.
• Integration with initiatives such as Common Service Centres, Jan Aushadhi Kendras, and agricultural service centres has enabled PACS to become important institutions for delivering essential services at the village level.

Expanding the Cooperative Ecosystem

• The Ministry has focused on expanding the reach of cooperatives by encouraging the establishment of new multipurpose societies, dairy cooperatives, and fisheries cooperatives.
• This expansion has significantly increased cooperative coverage across rural India and strengthened grassroots institutions in villages.
• The growing network of cooperative societies promotes financial inclusion, supports rural entrepreneurship, creates employment opportunities, and improves access to agricultural inputs, markets, and public services.
• It also strengthens community participation in local economic development.

Decentralized Grain Storage and Farmer Empowerment

• An important initiative has been the promotion of decentralized grain storage through cooperative institutions.
• The creation of modern storage facilities at the village level helps reduce post-harvest losses, improve food security, and minimize distress sales by farmers.
• Enhanced storage capacity enables farmers to store their produce until market conditions become favourable, thereby improving their bargaining power and ensuring better price realization.
• The initiative also strengthens India’s food supply chain and contributes to efficient agricultural marketing.

Strengthening Farmer Producer Organisations and Dairy Cooperatives

• The Ministry has promoted cooperative-based Farmer Producer Organisations (FPOs) to improve collective farming and market competitiveness.
• These organizations help farmers aggregate produce, undertake processing and value addition, access larger markets, and negotiate better prices.
• As a result, farmers benefit from reduced transaction costs and higher incomes.
• Similarly, the vision of White Revolution 2.0 aims to strengthen dairy cooperatives by increasing milk procurement and expanding the cooperative dairy network.
• Special emphasis has been placed on promoting women-led dairy cooperatives, thereby enhancing women’s participation in economic activities and improving household incomes.

Institutional, Financial and Digital Reforms

• The Government has strengthened cooperative institutions through tax reforms, higher transaction limits, and simplified financial procedures, improving their financial viability and operational flexibility.
• Specialized national cooperative institutions
  • National Cooperative Exports Limited (NCEL) – promote agricultural exports,
  • National Cooperative Organics Limited (NCOL)- organic farming,
  • Bharatiya Beej Sahakari Samiti Limited (BBSSL) – quality seed production, and cooperative branding, enhancing farmers’ income and agricultural value chains.
• Digital initiatives, including centralized core banking solutions (Sahakar CBS), AI-based customer support (Sahakar Sahyogi), and dairy supply monitoring systems, have improved governance, transparency, financial inclusion, service delivery, and promote technology-driven rural development.

Challenges

• Political interference often affects autonomous functioning and democratic governance.
• Weak institutional capacity, shortage of professional management, low digital literacy among members, and financial constraints limit operational efficiency.
• Regional disparities in cooperative development and limited competitiveness in evolving markets also hinder the sector’s full potential.

Way Forward

• The cooperative movement requires greater autonomy, professional management, and transparent governance.
• Capacity building, wider digital adoption, and stronger auditing will improve institutional performance.
• Integrating cooperatives with Farmer Producer Organisations (FPOs), Self-Help Groups (SHGs), digital agriculture, climate-resilient farming, and modern value chains will strengthen rural livelihoods, resilience, and inclusive economic growth.

Key Takeaways

UPSC Prelims and Mains Practice Question

Consider the following statements regarding the Ministry of Cooperation:

1. It was established in 2021.
2. It functions under the Ministry of Agriculture.
3. It aims to strengthen the cooperative movement.

Choose the correct answer:

(A) 1 and 3 only
(B) 2 and 3 only
(C) 1 only
(D) 1, 2 and 3

Answer: A) 1 and 3 only

Mains Practice Question

Q. “The cooperative movement is a key pillar of inclusive rural development in India.” In this context, examine the role of the Ministry of Cooperation in strengthening the cooperative sector. Discuss the major reforms and challenges in achieving the vision of ‘Sahkar Se Samriddhi’ (Prosperity through Cooperation). (15 Marks, 250 Words).

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