National cooperative policy 2025: driving India's growth via 'sahkar-se-samriddhi'

In a landmark move to revitalize one of the world’s largest people’s movements, the Union Minister of Cooperation has unveiled the new National Cooperative Policy, 2025. This forward-looking policy, based on the recommendations of a national-level committee headed by Suresh Prabhu, replaces the two-decade-old policy of 2002. It aims to create a robust framework to realize the vision of “Sahkar-se-Samriddhi” (Prosperity through Cooperation) and position cooperatives as pivotal drivers for achieving the goal of Viksit Bharat 2047.

The policy’s drafting follows the establishment of the dedicated Ministry of Cooperation in July 2021, a move designed to provide a distinct administrative and legal framework to strengthen the cooperative movement. The new policy is the result of extensive nationwide consultations and aims to address long-standing challenges while preparing the sector for future opportunities.

Fun Fact: The Indian cooperative movement is the largest in the world, with over 8 lakh cooperative societies covering almost 98% of rural India.

What are Cooperatives?

A cooperative is an autonomous association of persons who voluntarily unite to meet their common economic, social, and cultural needs through a jointly-owned and democratically-controlled enterprise. The core principle is “one member, one vote,” ensuring an equitable governance structure.

India’s cooperative journey began formally with the Cooperative Credit Societies Act, 1904. Today, the sector is a powerhouse, with over 30 crore members and a dominant presence in sectors like dairy, housing, and agricultural credit.

Illustrative Analogy: Think of a cooperative like a community-owned toolkit. Instead of each person buying their own expensive tools, the community pools its resources to buy a high-quality set that everyone can use and manage together, sharing both the costs and the benefits.

Constitutional and Legal Framework

The 97th Constitutional Amendment Act, 2011, granted constitutional status to cooperative societies, embedding them into India’s governance fabric:

• Fundamental Right: It made the right to form cooperative societies a fundamental right under Article 19(1)(c).
• Directive Principle: It introduced Article 43B under the Directive Principles of State Policy, mandating the state to promote voluntary formation, autonomous functioning, democratic control, and professional management of cooperative societies.
• New Constitutional Part: It added a new Part IXB (Articles 243ZH to 243ZT) to the Constitution, detailing the governance, elections, and auditing of cooperatives.

Governance is divided: cooperatives operating within a single state are governed by respective State Cooperative Societies Acts, while those operating across multiple states fall under the central Multi-State Cooperative Societies (MSCS) Act, 2002.

Key Pillars of the National Cooperative Policy 2025

The policy is built on a foundation of strategic pillars designed to create a holistic and enabling ecosystem.

Mnemonic for Key Pillars: To remember the core focus areas, use the acronym “LET-FIT”: Legislative Reforms, Ecosystem Development, Training, Financial Empowerment, Inclusivity, Technology.

Critical Policy Appraisal

Captivating Stat: Cooperatives are a major force in the Indian economy, distributing around 35% of all fertilizers and accounting for over 30% of sugar production.

Analytical Lens: UPSC Focus (Mains & Prelims)

Conceptual Basis: The legal and constitutional backbone of the cooperative movement is the 97th Constitutional Amendment Act, 2011, which introduced Part IXB into the Constitution of India.

UPSC Integration: Connecting the Dots

• GS Paper 2 (Polity & Governance): The topic is a classic example of federalism in action, highlighting the interplay between the Union (Ministry of Cooperation, MSCS Act) and the States (State Cooperative Acts). It is also central to decentralization and participatory governance.
• GS Paper 3 (Economy): Cooperatives are critical for financial inclusion (PACS, cooperative banks), agricultural reforms (doubling farmers’ income, Amul model), and fostering a model of inclusive growth.
• GS Paper 1 (Social Issues): The role of cooperatives like SEWA (Self-Employed Women’s Association) is a key case study for women’s empowerment and organizing the informal sector.

Future Impact & Policy Relevance: The long-term vision of this policy is to transform cooperatives from mere subsidy-distribution channels into vibrant, self-reliant economic enterprises. If implemented effectively, it can unlock immense potential in the rural economy, formalize grassroots economic activity, and serve as a powerful tool for achieving Sustainable Development Goals (SDGs) like No Poverty, Zero Hunger, and Gender Equality. The success will hinge on genuine devolution of power and effective capacity building at the ground level.

Prelims Practice Question (MCQ):

Which of the following provisions were added to the Constitution of India by the 97th Amendment Act, 2011?

1. The right to form cooperative societies as a Fundamental Right.
2. A Directive Principle of State Policy to promote cooperative societies.
3. A new part in the Constitution dedicated to the functioning of Municipalities.
4. Making the right to property a legal right.

Select the correct answer using the code given below: (a) 1 and 4 only (b) 1 and 2 only (c) 2 and 3 only (d) 1, 2, 3 and 4

Answer: (b) 1 and 2 only Explanation: The 97th Amendment Act of 2011 made the right to form cooperative societies a Fundamental Right under Article 19(1)(c) and added Article 43B as a Directive Principle. Part IXA (Municipalities) was added by the 74th Amendment, and the right to property was changed by the 44th Amendment.

Mains Sample Question (15 Marks):

The National Cooperative Policy 2025 aims to transform cooperatives from passive entities into vibrant economic drivers for a ‘Viksit Bharat’. Critically analyze the policy’s potential to address the long-standing structural challenges in India’s cooperative sector and achieve the vision of ‘Sahkar-se-Samriddhi’.

Mind Map Outline (Revision Structure)

• National Cooperative Policy
  • Core Vision & Context
    • Slogan: ‘Sahkar-se-Samriddhi’
    • Goal: Viksit Bharat 2047
    • Replaces: National Policy on Cooperatives, 2002
    • Genesis: Suresh Prabhu Committee recommendations
  • Constitutional & Legal Framework
    • 97th Constitutional Amendment Act, 2011
      • Fundamental Right: Article 19(1)(c)
      • DPSP: Article 43B
      • New Part: Part IXB (Articles 243ZH-243ZT)
    • Statutory Acts
      • State Cooperative Societies Acts
      • Multi-State Cooperative Societies (MSCS) Act, 2002
  • Key Features of the New Policy (LET-FIT)
    • Legislative & Governance Reforms
      • Amending State Laws
      • Enhancing Transparency & Autonomy
    • Ecosystem Development
      • ‘Bharat Brand’ for products
      • Promoting Exports
    • Training & Education
      • National Cooperative University
    • Financial Empowerment
      • Reducing Taxes
      • Cooperative Development Fund
    • Inclusivity
      • Youth & Women Participation
    • Technology & Modernization
      • National Cooperative Stack
      • Digitalization of PACS
  • Significance of Cooperatives in India
    • Economic Impact
      • Rural Economy & Financial Inclusion (PACS)
      • Farmers’ Income (Amul Model)
    • Social Impact
      • Women Empowerment (SEWA)
      • Community Building
  • Challenges & Critical Appraisal
    • Structural Issues
      • Politicization & Bureaucratic Control
      • Financial Dependency
      • Lack of Professional Management
    • Policy Opportunities
      • Promoting Autonomy
      • Building Financial Self-Reliance
      • Infusing Professionalism