On July 24, 2025, Union Home and Cooperation Minister Amit Shah unveiled the National Cooperative Policy 2025 at Atal Akshay Urja Bhawan, New Delhi, replacing the 23-year-old 2002 policy. Drafted by a 48-member committee led by Suresh Prabhu, the policy aims to modernize India’s 8.54 lakh cooperative societies serving 31 crore members (2025 data). It aligns with the UN International Year of Cooperatives 2025, themed “Cooperatives Build a Better World,” and supports Viksit Bharat 2047 by fostering inclusive growth, digital adoption, and rural empowerment.
- Launched: July 24, 2025, by Union Minister Amit Shah in New Delhi.
- Vision: “Sahkar se Samriddhi” (Prosperity through Cooperation) for Viksit Bharat 2047.
- Replaces the 2002 policy, addressing globalization and technological advancements.
Six Pillars of the Policy
Key Points:
- Focuses on strengthening foundations, vibrancy, future-readiness, inclusivity, sectoral expansion, and youth engagement.
- Targets one cooperative per village and 2 lakh new PACS by 2026.
- Aims to triple the sector’s GDP contribution by 2034 and engage 50 crore members.
The National Cooperative Policy 2025 rests on six pillars to transform the cooperative sector:
- Strengthening Foundations: Modernizes governance with legal amendments and Tribhuvan Sahkari University for training (founded July 2025, Anand, Gujarat).
- Promoting Vibrancy: Enhances transparency through digital tools and regular audits.
- Future Preparedness: Integrates AI, blockchain, and data analytics for efficiency (only 45% of members are digitally literate, per 2025 data).
- Enhancing Inclusivity: Prioritizes women, Dalits, tribals, and youth, with 5 model cooperative villages per tehsil (NABARD-led).
- Expanding Reach: Targets one cooperative per village and 2 lakh new Primary Agricultural Credit Societies (PACS) by February 2026.
- Youth Engagement: Promotes cooperative education in secondary curricula (per Shah’s advocacy).
These pillars aim to boost the sector’s GDP share from 5% to 15% by 2034 and engage 50 crore active members, supporting rural economies and employment generation.
Historical Context of Cooperatives in India
Key Points:
- 1904: Cooperative Credit Societies Act formalized cooperatives post-Edward Law Committee.
- 1912: Cooperative Societies Act expanded scope, leading to Madras Cooperative Union (1914).
- Post-Independence: Cooperatives gained prominence in Five-Year Plans, with Amul (1946) revolutionizing dairy.
India’s cooperative movement began with the Cooperative Credit Societies Act 1904, addressing rural debt after the Indian Famine Commission (1901). By 1911, 5,300 societies had 3 lakh members. The 1912 Act broadened cooperative scope, followed by the Maclagen Committee (1914) for transparency. The Government of India Act 1919 made cooperatives a provincial subject, with the Bombay Cooperative Societies Act 1925 as the first provincial law. Post-Independence, Amul (1946), led by Verghese Kurien, made India the world’s largest milk producer (239 million tonnes, 2023–24). The 2002 National Cooperative Policy under Atal Bihari Vajpayee set initial guidelines, now overhauled by the 2025 policy.
97th Constitutional Amendment (2011)
Key Points:
- Added Part IXB (Articles 243ZH–243ZT) for cooperative governance.
- Article 19(1)(c): Right to form cooperatives as a fundamental right.
- Article 43B: Promotes cooperatives as a Directive Principle of State Policy.
The 97th Constitutional Amendment (2011) granted constitutional status to cooperatives, reinforcing their role in inclusive growth. Key provisions include:
- Fundamental Right: Article 19(1)(c) includes the right to form cooperative societies.
- Directive Principle: Article 43B mandates states to promote cooperatives.
- Part IXB: Governs cooperative elections, audits, and management, limiting boards to 21 directors with 5-year terms, reserving seats for SC/ST and women.
- Multi-State Cooperatives: Governed by the Multi-State Cooperative Societies Act 2002, amended in 2023 for transparency.
The Supreme Court (2021) clarified that Part IXB applies only to multi-state cooperatives, with states regulating state cooperatives under Entry 32, State List.
Key Features and Objectives
Key Points:
- Digitalization: ₹2,516 crore project digitized 15,000 PACS (2024 data).
- Financial Support: National Cooperative Exports Limited (NCEL) secured ₹5,000 crore in export orders (2024).
- New Sectors: Expands into taxi services, tourism, insurance, and green energy.
The National Cooperative Policy 2025 aims to modernize and expand the cooperative sector through:
- Digital Adoption: National Cooperative Database and 300+ e-services via PACS as Common Service Centers.
- Financial Stability: ₹2,000 crore NCDC bonds and RBI-regulated cooperative banks.
- Sectoral Expansion: New cooperatives in taxi, tourism, insurance, and green energy, alongside agriculture, dairy, and housing.
- Model Villages: Five model cooperative villages per tehsil to showcase best practices.
- Training: Tribhuvan Sahkari University for professional management.
- Transparency: 10-year legal review cycle and social audits.
The policy targets 2 lakh new PACS by 2026, integrating schemes like DIDF, NPDD, PMMSY, and FIDF, and aims to make cooperatives competitive with private businesses.
Significance for UPSC Preparation
Key Points:
- Relevant for GS-2 (Polity) and GS-3 (Economy, Agriculture).
- Links to UN International Year of Cooperatives 2025 and Viksit Bharat 2047.
- Potential questions on 97th Amendment, PACS, and rural development.
The National Cooperative Policy 2025 is critical for UPSC Prelims and Mains due to its alignment with polity, economy, and rural development. Key areas for study include:
- Polity: 97th Amendment, Ministry of Cooperation (2021), and Multi-State Cooperative Societies Act 2023.
- Economy: Cooperatives’ role in GDP growth, employment (e.g., 5 lakh jobs via Maharashtra sugar cooperatives), and financial inclusion.
- Current Affairs: UN International Year of Cooperatives 2025, Tribhuvan Sahkari University, and NCEL’s ₹5,000 crore exports.
- Essay/Mains: Impact on rural women, tribals, and sustainable development, linking to NEP 2020’s vocational education and Supreme Court’s 2025 mental health guidelines.
The policy’s focus on digitalization, inclusivity, and new sectors makes it a high-yield topic for UPSC 2025–26.
Challenges and Public Sentiment
Key Points:
- Challenges: Politicization, low digital literacy (45% of members), and regional imbalances (57% cooperatives in Maharashtra, Gujarat, etc.).
- X Sentiment: Praises rural focus but flags rural connectivity and funding concerns.
- Solutions: Merge weak societies, promote multipurpose cooperatives, and enhance training.
X posts commend the policy’s rural empowerment and job creation potential but highlight challenges like poor digital infrastructure in rural areas and political interference (e.g., @SDJ9191, @MinOfCooperatn). Key issues include:
- Politicization: Local leaders influence cooperative management, undermining democracy.
- Digital Gap: Only 45% of members are familiar with digital tools (2025 data).
- Regional Imbalance: Northeastern and eastern states lag in cooperative development.
- Proposed Solutions: Merge weak societies, promote multipurpose PACS, and train via Tribhuvan Sahkari University.
The policy’s 83 reform intervention points (58 implemented by 2025) aim to address these, ensuring transparency and sustainability.
Impact and Alignment with Viksit Bharat 2047
Key Points:
- Impacts 31 crore members across 8.54 lakh cooperatives.
- Supports Amul, IFFCO, and KRIBHCO, among world’s top 300 cooperatives.
- Drives rural industrialization and self-reliance by 2047.
The National Cooperative Policy 2025 strengthens India’s cooperative ecosystem, contributing 20% to agricultural loans, 35% to fertilizer distribution, and 31% to sugar production (2024 data). By targeting 50 crore members and one cooperative per village, it fosters rural industrialization, women’s empowerment, and job creation. Success stories like Amul (3.6 million milk producers) and IFFCO (world’s largest fertilizer cooperative) highlight its potential. Aligned with NEP 2020’s skill development and Viksit Bharat 2047, the policy positions cooperatives as a pillar of inclusive growth and economic self-reliance.
