SAHKAR SE SAMRIDDHI

THE CONTEXT: The Ministry of Cooperation has launched a comprehensive suite of reforms under the “Sahakar Se Samriddhi” initiative to revitalize India’s cooperative ecosystem, focusing on financial inclusion, governance modernization, sectoral diversification, and global market integration. These measures aim to position cooperatives as engines of equitable growth, with transformative impacts visible in Primary Agricultural Credit Societies (PACS), cooperative banks, tax frameworks, and export-oriented national cooperatives, directly aligning with the goals of Aatmanirbhar Bharat.

GOVERNANCE AND INSTITUTIONAL REFORMS IN PRIMARY AGRICULTURAL CREDIT SOCIETIES (PACS)

• • Modernizing Governance through Legal and Digital Interventions: Adopting Model Bye-Lawsacross 32 States/UTs has transformed PACS into multipurpose entities capable of undertaking 25+ activities, including CSC services, PM Jan Aushadhi Kendras, and water scheme operations. This legal framework ensures inclusive governance, mandating representation for women and marginalized communities. Concurrently, the ₹2,516 crore computerization project has digitized 50,455 PACS, enhancing transparency through ERP-based national software integration. By March 2025, 67,930 PACS are expected to join this digital network, streamlining operations and reducing leakages.
  • Economic Diversification and Infrastructure Development: Under the Decentralized Grain Storage Plan, 11 pilot godowns have been completed, leveraging schemes like AIF and PMFME to reduce post-harvest losses by 15–20%. PACS are also diversifying into fuel retail, with 286 applying for petrol/diesel outlets and 56 commissioned after bulk-to-retail conversions1. Healthcare access has expanded through 4,523 PACS-approved PM Jan Aushadhi Kendras, while 8,322 micro-ATMs in Gujarat enable doorstep banking for 23 lakh new accounts.

STRENGTHENING COOPERATIVE BANKING SYSTEMS

• • Regulatory Easing and Financial Inclusion: Urban Cooperative Banks (UCBs) now offer housing loans up to ₹60 lakhand rural banks ₹75 lakh, doubling credit access for low-income households. The RBI extended the Priority Sector Lending (PSL) deadline to 2026, allowing UCBs to align with national financial inclusion targets. Gujarat’s RuPay KCC campaign exemplifies success, issuing 7.44 lakh cards and mobilizing ₹8,329 crore in deposits through DCCBs.
  • Technological Integration and Service Expansion: Aadhaar Enabled Payment System (AePS) fees for cooperative banks are now transaction-linked, reducing operational costs by 30%. Over 6,500 Bank Mitras equipped with micro-ATMs provide doorstep services, including pension disbursements and KYC updates, reaching 1.2 crore rural beneficiaries.

FISCAL REFORMS FOR COOPERATIVE VIABILITY

• • Tax Rationalization and Liquidity Enhancement: Cooperative societies with incomes between ₹1–10 crore now face a reduced surcharge of 7%(down from 12%), freeing ₹1,200 crore annually for reinvestment. MAT parity with corporates at 15% and increased TDS-free cash withdrawal limits to ₹3 crore annually have improved liquidity, enabling PACS to expand credit portfolios by 25%.
  • Incentivizing Manufacturing and Export Growth: New manufacturing cooperatives benefit from a flat 15% tax rate, spurring 450+ registrations in FY 2024–251. The National Cooperative Export Limited (NCEL) has exported 12.5 lakh MT of commodities worth ₹5,099 crore, linking 8,863 cooperatives to global markets.

REVIVING COOPERATIVE SUGAR MILLS THROUGH ETHANOL BLENDING

• • Financial Restructuring and Ethanol Infrastructure: A ₹10,000 crore NCDC scheme has sanctioned 80 loans (₹9,169 crore) to 44 sugar mills for ethanol plants, aligning with the 20% Ethanol Blending Program (EBP)GST on molasses reduced to 5% and tax relief of ₹46,000 crore for pre-2016 sugarcane payments have restored profitability, enabling mills to increase farmer payouts by 18%.
  • Diversification into Multi-Feed Ethanol Production: To mitigate raw material volatility, 60% of cooperative sugar mills are transitioning to multi-feed plants using maize, enhancing annual ethanol output by 2.5 billion liters.

NATIONAL-LEVEL COOPERATIVES FOR SECTORAL TRANSFORMATION

• • Seed and Organic Farming Revolution: The Bharatiya Beej Sahakari Samiti(BBSSL) has mobilized 17,425 PACS, cultivating 57 Rabi crop varieties across 5,596 hectares. Concurrently, the National Cooperative Organics Ltd (NCOL) markets 13 “Bharat Organics” products through 5,184 member societies, targeting ₹500 crore in FY 2025–26 sales.
  • Export-Led Growth via NCEL: NCEL’s procurement of 12.5 lakh MT of agricultural surplus has stabilized prices for 2.1 million farmers, with onion exports alone earning ₹1,200 crore in 2024.

TECHNOLOGY-DRIVEN TRANSPARENCY AND ACCOUNTABILITY

• • National Cooperative Database and Ranking Framework: Mapping 8.2 lakh cooperatives across 30 sectors, the database aids evidence-based policymaking, while the Cooperative Ranking Framework (2025)evaluates audit compliance (85% target) and financial health, fostering competition among 7 key sectors.
  • E-Governance and Procurement Efficiency: Computerization of ARDBs and RCS offices in 35 States/UTs has reduced approval timelines by 40%, while 574 cooperatives onboarded on GeM saved ₹120 crore via bulk procurement.

POLICY INNOVATIONS AND GLOBAL COLLABORATIONS

• • Legal Reforms and International Outreach: The Multi-State Cooperative Societies (Amendment) Act, 2023introduced electoral reforms and a Cooperative Ombudsman, resolving 8,500 grievances since March 2024. For the International Year of Cooperatives (2025), district-level committees will host 5,000 workshops to showcase India’s cooperative model globally.
  • National Cooperation Policy and Sahakar Mitra: The draft National Cooperation Policy, informed by 4 regional consultations, emphasizes SHG integration and youth engagement through Swayamshakti Sahakar, linking 1.2 lakh SHGs to NCDC’s ₹84,673 crore disbursements.

THE CONCLUSION:

India’s cooperative sector stands at the cusp of a transformative era, poised to drive inclusive growth and rural prosperity through technological innovation, policy reforms, and strategic collaborations. By leveraging digital platforms, embracing sustainable practices, and fostering a culture of entrepreneurship within cooperatives, India can unlock the sector’s full potential, creating millions of self-employment opportunities and positioning cooperatives as engines of socio-economic development in the 21st century.

UPSC PAST YEAR QUESTION:

Q. “In the villages itself no form of credit organisation will be suitable except the cooperative society.” – All Indian rural credit survey. Discuss this statement in the background of agriculture finance in India. What constrain and challenges do financial institutions supplying agricultural finances? How can technology be used to better reach and serve rural clients? 2014

MAINS PRACTICE QUESTION:

Q. The cooperative sector in India is undergoing significant transformation under the vision of ‘Sahakar Se Samriddhi.’ Discuss the initiatives taken by the Ministry of Cooperation to revitalize cooperatives, including their role in rural development, financial inclusion, and international market access.

`SOURCE:

https://pib.gov.in/PressReleasePage.aspx?PRID=2112225