India’s National Cooperative Policy 2025: A 20-Year Roadmap for Rural Development and Economic Growth

India’s Cooperative Sector Poised for Major Overhaul with National Policy 2025

New Delhi: India is set to revitalize its cooperative sector with the upcoming National Cooperative Policy 2025, aiming to foster employment and benefit the nation’s vast population. Union Home Minister Amit Shah has emphasized the policy’s transformative potential, calling for its comprehensive implementation across all states.

The policy targets the establishment of cooperatives in every village within five years, a notable undertaking that includes the goal of setting up 2,00,000 Primary Agricultural Credit Societies (PACS) by Febuary 2026. This initiative was a key discussion point at a recent state cooperation ministers’ meeting, held during the International Year of Cooperatives (IYC) 2025.

discussions at the meeting also delved into strengthening dairy and fisheries cooperatives, alongside the execution of the world’s largest grain storage scheme within the cooperative framework. Shah has mandated that all states announce their own cooperative policies by January 31, 2026, underscoring the government’s commitment to decentralizing cooperative growth.

“Now we have brought cooperative banks under the Banking Act and the Reserve Bank of India has also taken a flexible approach and solved many of our problems,” Shah stated, highlighting a more accommodating regulatory surroundings. He stressed the importance of ensuring no village is left underserved by a cooperative, with the National Cooperative database to be instrumental in achieving this objective.

The groundwork for the new National Cooperative Policy was laid by a 48-member national-level committee, chaired by former Union Minister Suresh Prabhakar Prabhu. This committee comprised a diverse group of stakeholders, including representatives from national and state cooperative federations, various levels and sectors of cooperative societies, central and state government officials, and academicians.

To ensure broad inclusivity, the committee conducted 17 meetings and four regional workshops across ahmedabad, Bengaluru, Gurugram, and Patna. This extensive consultation process led to the review and integration of 648 suggestions from stakeholders into the final policy document.

How dose the National Cooperative Policy 2025 aim to build upon the foundation laid by the 97th Constitutional amendment?

The Core Principles of the 2025 Policy

India’s National Cooperative Policy 2025 represents a notable shift in the nation’s approach to rural development and enduring economic growth. Building upon the 97th Constitutional Amendment (2011) which granted constitutional status and protection to cooperatives, this policy outlines a 20-year vision, focusing on strengthening cooperative societies and integrating them more effectively into the national economy. Key tenets include:

Enhanced Access to credit: Expanding financial inclusion through cooperative banks and credit societies, notably for small and marginal farmers, women entrepreneurs, and rural artisans. This includes streamlined loan disbursement processes and reduced interest rates.

Infrastructure Development: Investing in cooperative-led infrastructure projects like cold storage facilities, warehousing, processing units, and rural transportation networks.

Skill Development & Training: Providing thorough training programs for cooperative members, focusing on modern agricultural practices, business management, and digital literacy.

Promoting Cooperative Marketing: Strengthening cooperative marketing societies to ensure fair prices for agricultural produce and access to wider markets.

Digital Transformation: Leveraging technology to improve the efficiency and openness of cooperative operations, including online platforms for member services and data management.

Sector-Specific Strategies for Cooperative Growth

The policy doesn’t adopt a one-size-fits-all approach. Instead,it outlines tailored strategies for key sectors:

agriculture & Allied Sectors

This remains the cornerstone of the cooperative movement in India. The 2025 policy prioritizes:

1. Farmer Producer Organizations (FPOs): Aggressively promoting the formation and strengthening of FPOs to enhance collective bargaining power and reduce dependence on intermediaries. Government support includes seed funding, infrastructure assistance, and market linkages.
2. Precision Farming & Technology Adoption: Encouraging cooperatives to adopt precision farming techniques, including drone technology, IoT sensors, and data analytics, to improve crop yields and resource efficiency.
3. Organic Farming & Sustainable Agriculture: Supporting cooperatives involved in organic farming and promoting sustainable agricultural practices to enhance soil health and reduce environmental impact.
4. Dairy & Animal Husbandry: Strengthening dairy cooperatives and promoting integrated livestock management practices to increase milk production and improve the livelihoods of livestock farmers.

rural Industries & Handicrafts

Recognizing the potential of rural industries, the policy focuses on:

Cooperative Handicraft Societies: Providing design support, marketing assistance, and access to raw materials for cooperative handicraft societies to preserve traditional skills and create employment opportunities.

Rural Manufacturing Clusters: Establishing cooperative-led rural manufacturing clusters focused on value-added processing of agricultural produce and local resources.

Khadi & Village Industries: Revitalizing Khadi and Village Industries through modernization, design innovation, and marketing support.

Fisheries & Aquaculture

The policy aims to boost the fisheries sector through:

Fishermen Cooperative Societies: Strengthening fishermen cooperative societies to provide access to modern fishing equipment,processing facilities,and marketing channels.

Aquaculture Development: Promoting sustainable aquaculture practices and providing financial assistance for the development of fish farms.

Value Addition & Export Promotion: Encouraging value addition to fish products and promoting their export to international markets.

Financial Mechanisms & investment

Successful implementation hinges on robust financial mechanisms. The policy proposes:

Cooperative development Fund: establishing a dedicated Cooperative Development Fund to provide financial assistance to cooperative societies for infrastructure development, technology upgradation, and working capital requirements.

Credit Guarantee schemes: Expanding credit guarantee schemes to reduce the risk for banks lending to cooperative societies.

Venture Capital & Equity Funding: Attracting venture capital and equity funding for cooperative enterprises with high growth potential.

national Cooperative Bank Strengthening: Reinforcing the National Cooperative Bank (NCB) to act as a apex institution for providing refinance and support to cooperative banks.

Governance & Regulatory Reforms

Strengthening governance and streamlining regulations are crucial. Key reforms include:

Professional Management: Encouraging the appointment of professional managers with relevant expertise to lead cooperative societies.

Transparency & Accountability: Implementing robust accounting and auditing standards to ensure transparency and accountability in cooperative operations.

Multi-State Cooperative societies Act: streamlining the Multi-state Cooperative Societies Act to facilitate the smooth functioning of multi-state cooperatives.

* Digital Governance: Implementing digital platforms for member registration, voting, and grievance redressal.

Case Study: Amul – A Cooperative Success Story

The Amul model, established in 1946, remains a shining example of the power of cooperatives in India. Initially formed to address the exploitation of milk producers by middlemen,Amul transformed the dairy industry in Gujarat and beyond. Its success lies in its member-owned structure, efficient supply chain management, and strong brand building. The National Cooperative Policy 2025 aims to replicate the Amul model across various sectors, empowering rural communities and fostering inclusive growth. The Anand Pattern