Vision To Reality: How The Modi Government Is Reinventing India's Cooperative Sector
With Amit Shah at the helm, India's cooperative sector is witnessing unprecedented modernisation, inclusivity, and empowerment, ushering in a new era of rural prosperity
On July 6, 2021, Prime Minister Narendra Modi took an unprecedented step that signalled a structural shift in India's approach to rural development: the creation of a dedicated Ministry of Cooperation. This wasn't just administrative tinkering; it was a visionary move rooted in the age-old Indian philosophy of collective prosperity: Sahkar se Samriddhi. For the first time in independent India's history, cooperatives were given their rightful place at the centre of the policy map.
This bold reorganisation acknowledged a long-standing truth, that India's cooperative sector, which had been operating under the shadow of the Ministry of Agriculture, required focused attention, tailored governance, and independent innovation. PM Modi's decision, often underrated in media narratives, has over the past three years begun to radically transform India's rural economic landscape.
At the heart of this transformation stands Union Home Minister and Minister of Cooperation Amit Shah, a leader with deep ideological and administrative roots in Gujarat's cooperative ecosystem. His dual role in managing both internal security and cooperative development is not a contradiction; it reflects the Modi government's belief that rural empowerment and national strength are deeply intertwined.
A Strategic Institutional Shift
Before 2021, India's vast network of over 800,000 cooperatives functioned under a fragmented policy regime, underfunded, poorly digitised, and devoid of strategic direction. The Ministry of Cooperation swiftly altered this situation. No longer were cooperatives just a rural relic; they were recast as engines of growth for a $5 trillion economy.
One of the most far-reaching reforms has been the computerisation of 63,000 Primary Agricultural Credit Societies (PACS). Often the first point of contact for farmers needing credit, PACS had historically been plagued by inefficiency and opaque bookkeeping. Under Shah's stewardship, digitisation introduced transparency and accessibility. Farmers now access services ranging from crop loans to insurance and digital transactions at the local level.
Consider the case of Gujarat's Panchmahal and Banaskantha districts. Here, over 400,000 new bank accounts were opened through PACS-linked micro ATMs, leading to deposits exceeding Rs 500 crore and 24 lakh digital transactions. Nationally, deposits in cooperative banks have surged by Rs 4,000 crore. These are not just statistics; they reflect a tectonic shift in trust and engagement with formal banking among rural citizens.
From Credit Societies To Multi-Service Hubs
But digitisation is only one pillar. The diversification of PACS services has perhaps been the most socially transformative element. These entities are now being linked with ration shops, generic medicine outlets, petrol pumps, and even LPG distribution centres. In effect, PACS are becoming multi-service rural hubs, reducing dependency on private middlemen and injecting autonomy into village economies.
Amit Shah's ambition to establish two lakh PACS in every panchayat isn't mere bureaucratic expansion; it is a visionary bid to create a cooperative backbone for rural India. Each PACS becomes a node in a decentralised but connected economy, fuelling rural entrepreneurship and enabling last-mile delivery of goods and services.
Empowering Women And The Dairy Revolution 2.0
A particularly impactful initiative has been White Revolution 2.0, which places women at the forefront of dairy cooperatives. Drawing inspiration from the Amul model, this campaign supports women-led self-help groups to boost milk production, storage, and marketing.
This gendered approach to rural development is not incidental. By tying dairy cooperatives to natural farming and animal husbandry, both major priorities of the Modi government, the ministry has created sustainable income avenues for women farmers. The convergence of women's empowerment, natural farming, and cooperative finance embodies a truly holistic model of rural progress.
Cooperatives Go Global
In 2023, another landmark development unfolded: the creation of the National Cooperative Export Limited (NCEL). Its mandate is simple yet transformative—enable small producers to access international markets. Farmers and artisans who once sold their goods only locally can now tap into global demand, with NCEL functioning as a bridge between local excellence and global opportunity.
By facilitating exports of cooperative-produced goods, from spices to handicrafts, NCEL is turning cooperative members into micro-exporters – a first in India's rural policy history. This not only boosts income but also cements the cooperative identity as entrepreneurial and globally competitive.
Regulatory And Financial Reforms
The ministry didn't stop at structural or operational reforms. Under Shah, it initiated a series of financial and regulatory changes to level the playing field for cooperative banks. These include:
Doubling housing loan limits for cooperative banks.
Allowing cooperative banks to lend to commercial real estate and micro-enterprises.
Authorising doorstep banking services in both rural and urban areas.
These measures have redefined cooperatives not as laggards, but as competitive players in the banking ecosystem, especially important when considering that cooperative banks often serve populations that commercial banks ignore.
In parallel, tax reforms such as reduced surcharges and tax exemptions for cooperative sugar mills have ensured that the benefits of cooperation translate into better margins for farmers, not just balance-sheet improvements for institutions.
A Data-Driven Future
Transparency remains a cornerstone of Shah's approach. The ongoing creation of a national cooperative database aims to finally solve the persistent problem of data fragmentation in the sector. This digital registry will track cooperative activities, memberships, and performance, enabling data-driven policymaking, targeted funding, and efficient resource allocation.
Alongside this, the ministry has set up Technical Support Units (TSUs) to offer training and guidance, ensuring that cooperative officials and members are not only digitally literate but also aware of regulatory compliance and financial best practices.
Looking Ahead: A National Cooperative Policy
The announcement of a long-term National Cooperative Policy (2025–2045) signals that the government is not treating cooperation as a pet project but as a core component of national development strategy. This policy is expected to focus on expanding cooperative presence in agriculture, services, housing, logistics, and education, creating a multipronged cooperative ecosystem.
Conclusion: A Quiet Revolution
As India celebrates the International Day of Cooperatives, the Modi government's focus on cooperation stands out as a quiet but powerful revolution. It is not just about better banking or higher yields; it is about reimagining development itself—from top-down to bottom-up, from centralised governance to empowered communities.
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Amit Shah's leadership, marked by clarity of vision and administrative precision, has turned the cooperative sector into a frontline institution for nation-building. What was once considered a fading legacy of Gandhian socialism is now redefined as a modern instrument of economic justice and empowerment.
The writer is a technocrat, political analyst, and author. He pens national, geopolitical, and social issues. His social media handle is @prosenjitnth. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect News18's views.
About the Author
Prosenjit Nath
The writer is an Indian technocrat, political analyst, and author.
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Amit Shah cooperatives Narendra Modi
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New Delhi, India, India
First Published:
July 05, 2025, 15:54 IST
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