Aug 2, 2025
15
mins read
The National Cooperation Policy 2025 is a comprehensive framework to revitalize India’s cooperative sector. It replaces the 23-year-old policy (second Cooperation Policy) of 2002 and sets ambitious targets for inclusive growth. The policy is built on India’s cooperative legacy (dating back to pre-independence and the 97th Constitutional Amendment Act of 2011, which made coops a fundamental right), and it charts a future-ready vision aligned with “Sahkar se Samriddhi”. Over the next 20 years, it aims to expand cooperatives into every village, boost rural employment, and harness coops for small producers, women, Dalits and tribals. Key goals include tripling the cooperative sector’s GDP share by 2034 and activating 50 crore new members in coops. Its launch during the UN’s International Year of Cooperatives underscores cooperatives’ role in India’s path to becoming a developed nation. (2025 is a crucial UPSC topic due to its national importance.)
Objectives of the policy:
To triple the cooperative sector’s share in GDP by 2034.
Ensure active participation of 50 crore members.
Establish at least one cooperative in every village.
Enhance transparency, financial sustainability, and digital integration.
Empower rural women, tribals, Dalits, and youth through cooperatives.
Build a self-reliant and employment-rich cooperative ecosystem by 2047.
On 24 July 2025, Union Home Minister (Cooperation) Amit Shah unveiled the National Cooperation Policy 2025, replacing the 2002 policy.
This 20-year policy (2025–2045) aligns with PM Modi’s vision of “Sahkar Se Samriddhi” (Prosperity through Cooperation) and aims to build a Viksit Bharat by 2047.
Its launch coincides with 2025 being declared the International Year of Cooperatives by the UN (“Cooperatives Build a Better World” theme), highlighting global recognition of the cooperative movement.
Table of content
A cooperative (or co-op) is an organization or business that is owned and operated by a group of individuals who share a common interest, goal, or need.
These individuals, known as members, participate in the cooperative’s activities and decision-making process, typically on a one-member, one-vote basis, regardless of the amount of capital or resources each member contributes.
The main purpose of a cooperative is to meet the economic, social, or cultural needs of its members, rather than to maximize profits for external shareholders.
Grassroots Collective Enterprises:
Cooperative societies are member-owned organizations where individuals pool capital and effort for common economic benefit.
Each member’s liability is limited to their share, protecting them financially.
Membership is voluntary, and decisions follow the one-member-one-vote principle.
Service Motive & Fair Returns:
Unlike profit-driven firms, coops exist for members’ welfare.
They offer better bargaining power, reduce middlemen, and ensure fair prices.
For example, farmer coops like dairies, sugar mills or spinning mills (e.g. the Amul dairy model) allow producers to process and market collectively.
This empowers small farmers, artisans, women and labourers.
Economic Backbone:
Cooperatives underpin India’s rural economy. Over a third of rural Indians are members of coops.
PACS (Primary Agricultural Credit Societies) alone serve as the first point of credit in villages.
Coops provide credit, inputs, marketing and infrastructure, strengthening the rural economy and inclusive development.
Democratic Control:
Coops are democratically run by elected committees, emphasizing transparency and accountability.
Their collective actions help marginal groups participate in the economy and improve their livelihoods.
The cooperative sector currently contributes significantly to India’s rural economy
20% of the total agricultural credit
35% of fertiliser distribution
Over 30% of sugar and 10% of milk production
Over 21% of the fishing sector
13% of wheat and 20% of paddy procurement
New Ministry (2021):
The independent Ministry of Cooperation was created in July 2021 to focus on the cooperative sector, driving inclusive rural growth.
It gave legislative form to India’s cooperative tradition, overseeing policy, regulation and reforms.
Co-operative minister of India: Ministry of Cooperation is headed by Shri Amit Shah.
5Ps Framework:
The Ministry’s strategy centers on the Five Ps:
People
PACS
Platform
Policy
Prosperity
This means:
putting people (especially farmers, women, youth) at the center;
strengthening PACS (primary agricultural credit societies); building digital platforms and databases for coops
enacting supportive policies; and ensuring prosperity reaches all members.
Transparency & Technology:
Under this approach, the Ministry emphasizes transparency, adoption of digital technology and a member-centric mindset.
Initiatives include a National Cooperative Database and digitalisation of PACS(primary agricultural credit societies).
Sector Diversification:
It is encouraging coops in new areas (taxi services, insurance, tourism, green energy) so that profits benefit members directly.
For example, the “Sahkar Taxi” service was launched to give drivers cooperative ownership of profits.
Coops are also being promoted in insurance and renewable energy to broaden impact.
Financial Empowerment:
The Ministry has empowered scheduled cooperative banks to operate on par with commercial banks, and plans to form 2 lakh new multipurpose PACS by 2026.
These moves aim to ensure accessible credit and services across all villages.
There are six strategic pillars of National Cooperation Policy 2025:
Strengthening the foundation:
Enact timely legal and regulatory reforms to improve ease-of-doing-business for coops.
Focus on autonomous governance, good cooperative governance and accessible financing.
Expand linkages among coops and their geographic reach.
Promoting Vibrancy:
Build a robust cooperative ecosystem by encouraging business-oriented coops, cooperative federations and multi-dimensional expansion (including international trade).
This includes boosting exports through the new National Cooperative Exports Limited (NCEL).
Preparing cooperative societies for the future:
Drive technology adoption (cloud accounting, AI, blockchain) for transparency and efficiency.
Encourage professional management while staying true to cooperative principles. Support capacity-building and innovation to prepare for future challenges.
Enhancing inclusivity and expanding reach:
Ensure coops reach every corner of the country and population.
Emphasize coops as a people’s movement by involving women, youth and marginalized groups (SC/ST) in leadership roles.
Expanding into new sectors:
Encourage coops to venture into non-traditional sectors (e.g. insurance, e-commerce, green energy) where collective ownership can add value.
Examples: cooperative taxi-aggregators and organic-farming coops for supply chain integration.
Preparing the younger generation for cooperative development:
Invest in cooperative education and experiential learning for youth. Notably, India laid the foundation for its first national cooperative university (Tribhuvan Sahkari University) in Anand, Gujarat.
This will train thousands of cooperative professionals, ensuring succession and innovation in the sector.
Model Cooperative Villages:
A flagship Model Cooperative Village initiative aims to develop 5 model villages per tehsil through PACS-centric programs.
These villages demonstrate how cooperative-led development can boost rural incomes and provide livelihood opportunities household by household.
NABARD coordinates these pilots, initially in Gujarat, to make villages ‘Atmanirbhar Gaon’ via coops.
Expanding Membership:
The policy seeks to activate 50 crore currently inactive or non-member citizens into active coop membership.
This includes setting up at least one cooperative unit (like a PACS, dairy, or consumer society) in every village and PACS in every panchayat.
Professionalization & Training:
Cooperatives are being encouraged to adopt modern management (professional CEOs, audits, modern IT).
The new cooperative university (TSU) and affiliated institutes will conduct diploma/degree programs and short courses to prepare 2 million co-op professionals (grassroots workers to managers) over five years.
National Cooperative Exports Limited (NCEL):
To boost rural incomes, NCEL was created (under the 2023 Multi-State Societies Act) to market cooperative produce globally.
Within months, NCEL secured export orders worth ₹5,000 crore for rice and wheat, opening international markets to farmers.
Marketing and Value Addition:
The policy promotes marketing coops (e.g. farmer-producer organizations) to help producers sell directly to consumers, reducing intermediaries.
It also supports coops for seed production and organic branding; three national-level coops have been set up for export, seeds and organic products.
A “White Revolution 2.0” initiative is planned for dairy, with special emphasis on women’s participation.
Inclusive Infrastructure:
Existing PACS are being expanded into new services (Jan Aushadhi health kiosks, LPG distribution, fuel stations, e-gov services), leveraging coop networks for rural infrastructure.
This enhances rural self-reliance and service delivery.
Inclusive Growth Engine:
By pooling small contributions, the cooperative sector can achieve large-scale impact.
The policy asserts coops uniquely drive inclusive development (rural and emerging sectors), enabling millions of small farmers and producers to gain market access and fair returns.
Employment Generation:
Coops in dairy, agriculture, fisheries, handicrafts, etc. create local jobs.
The policy’s targets (e.g. millions of jobs in coops, skilling youth) will boost rural employment and entrepreneurship.
Empowerment of Marginalized Groups:
A central goal is member-centric growth.
Women, youth, Dalits and tribals are prioritized as beneficiaries – through leadership roles, targeted programs and direct profit-sharing (e.g. profits from cooperatively run services go to the workers).
Steady Sectoral Growth:
The policy mandates periodic legal updates (every decade) so cooperatives evolve with time.
This dynamic approach aims to triple the coop GDP share by 2034 and ensure sustainable growth up to the 2047 centenary.
By 2047, a strong cooperative sector is expected to underpin “Sahkar Se Samriddhi” for all of India.
To ensure efficiency and transparency, the policy mandates:
- Full computerisation of PACS operations
- Technology-driven governance for all types of cooperatives
- Cluster monitoring systems for institutional tracking
- Legal reviews every 10 years to keep policy aligned with evolving needsAs of 2025, over 83 intervention points have been identified for reform, 58 implemented, three completed, and others underway.
Additionally, a nationwide cooperative university (Tribhuvan Sahkari University) has been established for professional training and capacity building.
Launch of ‘Sahkar Taxi’ to ensure profit-sharing with drivers.
Establishment of three national-level multi-state cooperative societies for, Export promotion, Seed production and Branding and marketing of organic products.
Expansion of PACS into Jan Aushadhi Kendras, fuel distribution, LPG delivery, and rural infrastructure services.
UN International Year of Cooperatives 2025:
The United Nations declared 2025 the International Year of Cooperatives with the theme “Cooperatives Build a Better World”.
This global spotlight reinforces the relevance of the policy, aligning India’s national initiatives with international cooperative goals (such as SDGs).
The 97th Constitutional Amendment Act 2011 empowers cooperatives (fundamental right to form coops).
It established the right to form cooperative societies as a fundamental right (Article 19).
It included a new Directive Principle of State Policy on the Promotion of Cooperative Societies (Article 43-B).
It added a new Part IX-B to the Constitution titled “The Co-operative Societies” (Articles 243-ZH to 243-ZT).
It authorizes the Parliament to establish relevant laws in the case of multi-state cooperative societies (MSCS) and state legislatures in the case of other cooperative societies.
The recent Multi-State Cooperative Societies Act 2023 now governs cross-state coops.
These provide a robust legal base for new reforms.
Despite its transformative vision, the cooperative sector faces several deep-rooted and emerging challenges that must be addressed for the National Cooperative Policy 2025 to succeed:
Fragmented Legal and Regulatory Framework
Cooperative societies fall under both state and central jurisdictions, leading to conflicting laws, delays, and inconsistent policy execution.
Uniform reforms (especially for multi state cooperative societies) are often slowed down due to state-level autonomy issues.
Limited Financial Autonomy & Credit Access
Many cooperative societies, particularly PACS, lack adequate access to financial capital, hampering service delivery and expansion.
Coops often rely heavily on government aid and face restrictions from state cooperative banks and commercial lenders.
Weak Professional Management and Capacity
Most cooperative units lack trained staff and modern governance systems.
Inadequate technical skills and absence of professional management hinder transparency, innovation, and competitiveness.
Inadequate Technological Adoption
Low digital literacy among members and poor IT infrastructure impede technology-driven reforms.
Many cooperative societies are yet to adopt digital accounting, cloud services, or e-governance tools, limiting efficiency and transparency.
Political Interference and Governance Issues
Frequent political control and interference in cooperative society elections, fund allocations, and management appointments reduce autonomy.
This weakens democratic functioning and member confidence.
Awareness and Inclusivity Gaps
A large portion of rural and urban poor remain unaware of cooperative society benefits.
Women, Dalits, and tribal communities are still underrepresented in cooperative leadership and decision-making roles, despite policy intentions.
Lack of Skilled Youth Participation
While the policy targets youth engagement, cooperatives are often seen as outdated or rural-focused, discouraging young professionals from participating.
Capacity-building efforts are still in early stages.
Collaborative Effort: Success requires active participation from cooperative members, elected bodies, state governments and private-sector partners. Regular monitoring and feedback will be key.
Focused Growth: States and local bodies must strengthen PACS and other primary coops, ensuring each village has cooperative access.
Youth and Education: Continued emphasis on the cooperative university and skilling will create a pipeline of trained leadership.
Sustained Reform: Building on this policy’s framework, the government should continue enacting supportive laws and leveraging technology. Overcoming bureaucratic hurdles and political interference in coops will be crucial.
Monitoring Impact: The ambitious targets (e.g. tripling coop GDP share, major membership boost) must be tracked. If effectively implemented, the policy can transform the cooperative landscape into a robust ecosystem for inclusive, sustainable growth.
Q.What is the National Cooperation Policy 2025?
A.A new 20-year framework (2025–2045) to modernize and expand India’s cooperative societies. It replaces the 2002 policy and aims to strengthen coops for inclusive growth.
Q.What are the key goals of National Cooperation Policy 2025?
A.To triple the cooperative sector’s GDP share by 2034, increase cooperative societies by ~30%, establish at least one co-op in every village, and induct 50 crore new members into coops.
Q.How does the Ministry of Cooperation support coops?
A.Formed in 2021, the Ministry drives reforms under a ‘5Ps’ model: People, PACS, Platform, Policy, Prosperity. It promotes PACS expansion, digital co-op platforms, legal reforms, and profitability for members.
Q.What does “Sahkar se Samriddhi” mean?
A.It means “Cooperation to Prosperity.” The policy uses this motto to emphasize that cooperative action is meant to bring shared wealth and well-being to the entire society, not just individuals.
Q.Which initiatives boost rural development under National Cooperation Policy 2025?
A.Key measures include creating Model Cooperative Villages (cluster development via PACS), setting up the cooperative university (TSU) for skill-building, and launching co-op schemes in agriculture, dairy and allied sectors to increase rural incomes.
The National Cooperation Policy 2025 is a visionary blueprint to mainstream cooperatives as engines of inclusive and sustainable development. It aims to empower over 130 crore Indians by making cooperatives more vibrant, transparent and far-reaching. By strengthening legal frameworks, digitizing operations and expanding coops into new sectors, the policy seeks to triple the cooperative contribution to GDP and involve tens of crores of new members. The ultimate goal is a “Viksit Bharat” (Developed India) by 2047, realized through “Sahkar se Samriddhi”. Achieving this will require coordinated efforts from the government, cooperatives and communities. If the strategy is effectively implemented and monitored, the cooperative sector could emerge as a key pillar of India’s growth story, fulfilling its promise of shared prosperity and self-reliance.
Internal Linking Suggestions
How to Begin Your UPSC Preparation : The Ultimate Guide For Beginners
UPSC Previous Year Question Papers with Answers PDF - Prelims & Mains (2014-2024)
40 Most Important Supreme Court Judgements of India : Landmark Judgements UPSC
Article 32 of the Indian Constitution: Right to Constitutional Remedies, 5 Writs, Significance
Parliamentary Committees in India: Functions, Types & Significance, UPSC Notes
GST Council (Goods and Services Tax Council): Constitutional Provisions, Functions, Way Forward
External Linking Suggestions
UPSC Official Website – Syllabus & Notification: https://upsc.gov.in/
Press Information Bureau – Government Announcements: https://pib.gov.in/
NCERT Official Website – Standard Books for UPSC: https://ncert.nic.in
