Cooperatives: The New Face of Rural India

On a dusty afternoon in Chiloda village, Ahmedabad, Umaid Thakore sat under a neem tree outside the local panchayat office. His weathered hands gripped the loan approval letter from the local mandali or the village’s Primary Agricultural Credit Society (PACS). “This is more than money,” he said. “It’s freedom from moneylenders, debt, and uncertainty.” And all of it came without any middlemen or hidden charges. In Odisha’s Keonjhar district, the transformation takes on a different shade. Sumati Mundari, a tribal woman once unsure if her family would make ends meet, now earns Rs 1.64 lakh annually through her poultry and dairy enterprise. With the support of her cooperative-linked Self-Help Group (SHG), she secured a Rs 4 lakh loan in 2019, which helped her build her business—and her daughter’s future. Today, her daughter is a diploma engineer. Mundari’s success earned her the title of Lakhpati Didi—one among over 1.15 crore such women across India empowered through cooperatives.

What connects Thakore and Mundari? They are part of a seismic, silent transformation that is sweeping rural India led by the Ministry of Cooperation under Union Minister Amit Shah.

India’s cooperative sector is no stranger to success. Titans like Amul and IFFCO have been global leaders for decades. In 2024, both were ranked first and second respectively in the world based on their turnover-to-GDP-per-capita ratio by the International Cooperative Alliance. That success, once confined to marquee brands, is now being democratized down to the last mile, thanks to the initiatives under the relatively new but deeply strategic department established by Prime Minister Narendra Modi’s government. Carved out in July 2021, the Ministry of Cooperation was tasked with breaking away from the fragmented and outdated governance that had long plagued the sector. Previously, cooperatives were spread across multiple ministries with conflicting jurisdictions and overlapping regulations. This lack of focus resulted in delays, dysfunction, and disinterest. But today, under Amit Shah, the Ministry is pursuing a coherent, modernized, and data-driven model focused on prosperity through cooperation (Sahkar se Samriddhi). And the numbers speak volumes. The Ministry of Cooperation has completely reimagined its role to bring about human-centric change. With an investment of Rs 2,516 crore, over 67,000 PACS are being computerised. These PACS are being transformed into Common Service Centres, offering more than 300 government services, from Aadhaar updates to railway ticket bookings. Loan disbursals from the National Cooperative Development Corporation (NCDC) have jumped fivefold in just three years, from Rs 25,000 crore in 2021 to Rs 1.28 lakh crore in 2025. A centralized database now maps over 8 lakh cooperatives and nearly 30 crore members, ensuring policy is finally driven by insight.

India’s cooperative universe is vast, comprising about 8.5 lakh societies that touch nearly 30 crore lives. They account for 20 per cent of agricultural credit, 35 per cent of fertiliser distribution, and 31 per cent of sugar production, and contribute 4.5 per cent to India’s GDP through dairy cooperatives alone. By 2030, they are projected to add over 11 crore jobs—both direct and self-employment opportunities. The Ministry’s ambitions extend beyond rural credit. Plans are underway for a cooperative taxi service, where driver-members co-own the business, ensuring profits are equitably shared and services remain affordable. A cooperative insurance company is also on the anvil, one that will ensure other cooperatives and aims to become India’s largest private sector insurer. The roadmap ahead is both ambitious and inclusive. The Ministry has set a target of establishing 2 lakh new PACS to ensure that every panchayat in India has access to grassroots financial and livelihood services. These cooperatives are being aligned with flagship government schemes like PM Kisan, crop insurance, and rural skilling, creating a web of empowerment that reaches the most remote corners of the country. Another key thrust area is integration. The convergence of PACS with digital governance tools and local institutions is enabling seamless delivery of services. From property verification and e-KYC to scheme enrolments and grievance redressal, these modernized PACS are becoming the digital and developmental nerve centres of every village. This marks a paradigm shift—from cooperatives as transactional units to cooperatives as engines of participatory governance and rural prosperity. The government’s vision of building entrepreneurial, inclusive, and hyper-local self-reliant communities is now being hardwired into policy. As India gears up to become a USD 5 trillion economy, cooperatives are no longer peripheral players. They are central to the country’s growth story. With the United Nations declaring 2025 the International Year of Cooperatives, India is poised to lead not just in scale, but in substance.

The writer is an economic and political analyst and columnist. Views expressed are personal