The Indian government is set to launch a comprehensive national cooperative policy spanning from 2025 to 2045. This initiative aims to revitalize the cooperative movement within the country and generate employment opportunities for its 1.4 billion citizens. A key component of this policy is to establish at least one cooperative in every village in India within the next five years, supported by the creation of 200,000 Primary Agricultural Credit Societies (PACS) by February 2026.
Union Home Minister Amit Shah announced the upcoming policy, emphasizing its critical role in transforming the cooperative sector into a significant economic pillar. He urged states to formulate their own cooperative policies by January 31, 2026, aligning them with the national vision.
The establishment of 200,000 new PACS by February 2026 is a central focus, as these grassroots institutions are vital for ensuring financial access and agricultural support in rural areas. To meet this goal, the target for the financial year 2025-26 should be completed by February next year.
Recognizing the factors that have weakened the cooperative movement in India, Shah pointed out three main issues: outdated laws, a lack of expansion and adaptation in cooperative activities, and nepotism in recruitment. To address these challenges, the government has amended the laws and conceptualized the Tribhuvan Sahkari University (TSU) to develop skilled manpower for the cooperative sector. Every state should have at least one cooperative training institution affiliated with TSU.
The government is promoting the computerization of PACS to improve efficiency, accountability, and transparency, ultimately enhancing profitability. This involves integrating all functional PACS onto a unified Enterprise Resource Planning (ERP) platform. In the initial phase, 5,754 PACS have been selected for computerization, connecting them with NABARD, State Cooperative Banks (StCBs), and District Central Cooperative Banks (DCCBs). Approximately 2,900 PACS are expected to be fully computerized in the coming weeks, with all PACS in the state functioning as e-PACS within six months. The computerization scheme will equip PACS with essential hardware and software.
The initiative to computerize PACS is expected to enhance the speed, transparency, and accountability of operations. It will also improve both credit and non-credit services for members, enable timely detection of financial irregularities, boost the efficiency of PACS staff, and expand financial inclusion.
Special attention is being given to urban cooperative banks and credit societies. Cooperative banks have been brought under the Banking Regulation Act, and the Reserve Bank of India (RBI) has adopted a flexible approach to address their problems.
The National Cooperative Policy will promote natural farming, encouraging state cooperation ministers to work with agriculture ministers to safeguard public health and the environment. The policy aims to bring discipline, innovation, and transparency to the cooperative sector nationwide through the Model National Cooperative Policy Act. The government aims to ensure that every village in the country has a cooperative within the next five years, utilizing the National Cooperative Database to achieve this objective.
