Union Home and Cooperation Minister Amit Shah has announced that the central government is formulating a new policy to streamline the liquidation process for cooperatives, specifically targeting Primary Agricultural Credit Societies (PACS) that have become defunct. The announcement, made on May 18, 2025, at a 'Sahkari Mahasammelan' in Ahmedabad, underscores the government's commitment to revitalizing the cooperative sector and ensuring its long-term viability.
The core objective of this policy is to facilitate the swift settlement of PACS that have gone into liquidation, paving the way for the registration and establishment of new, functional societies in their place. This initiative is part of a broader strategy to strengthen the cooperative infrastructure across the country, with a vision to establish two lakh new PACS by 2029. These PACS will be connected to 22 different types of businesses, diversifying their operations and bolstering their financial resilience.
The government aims to prevent registered PACS from becoming financially distressed. The strategy involves connecting PACS to diverse business activities and ensuring that robust mechanisms are in place to safeguard their financial health. Amit Shah expressed confidence that these measures would significantly reduce the risk of PACS falling into financial sickness.
The new policy will likely outline a clear and efficient procedure for liquidating defunct cooperatives. This process will likely involve the appointment of a liquidator by the Registrar of Cooperative Societies, who will then take control of the society's assets and liabilities. The liquidator will be responsible for settling accounts, distributing assets, and formally ending the society's legal existence. A standard operating procedure (SOP) mandates that liquidators must complete the process within 15 days after taking custody of the properties, records, and documents, and requires state officials to identify defunct PACS within seven days.
Furthermore, the government is emphasizing the importance of transparency, training, and awareness within the cooperative sector. By promoting these principles, the government aims to foster a culture of accountability and efficiency, ensuring that cooperatives are well-managed and responsive to the needs of their members.
In addition to streamlining liquidation processes and preventing financial distress, the government is also exploring innovative ways to promote a circular economy within the cooperative sector. One such initiative involves establishing cooperative societies that utilize the skin, bones, and horns of deceased animals, transforming waste into valuable resources. Another initiative involves involving a cooperative-owned company in manufacturing equipment for the dairy sector, such as those for making ice cream, cheese and 'paneer'.
The focus on strengthening the cooperative movement aligns with the Prime Minister's vision of "Sahakar Se Samriddhi" (Prosperity through Cooperation). The establishment of the Ministry of Cooperation in July 2021 underscores the government's commitment to this vision.
The minister also highlighted the Gujarat model of Cooperatives and urged cooperative leaders to focus on economic strengthening the cooperatives, use of technology to bring transparency in the cooperative system and encourage cooperative training in order to expand the cooperative network in the country. He also advocated the four layer cooperative model for the sustainability of cooperatives.
