Budget 2026-27 likely to signal new cooperative sector's ambition

A blueprint is likely on the anvil to spell out how the sector will reach 500 million people and treble its economic contribution

The Union Budget for 2026-27 is expected to sketch out a road map for trebling the cooperative sector’s contribution to the Indian economy over the next decade, with the aim of bringing 500 million people within its ambit, in line with the objectives of the National Cooperative Policy, 2025. 

Sources said the National Cooperative Policy, launched by the Union Minister for Cooperation Amit Shah in the national capital a few months ago, clearly articulated the need to constitute a task force to expand the number of people involved with cooperatives by 66 per cent from the existing 300 million, while ensuring the autonomous functioning of cooperatives and democratic control by their members. 

The policy also called for a 30 per cent increase in the number of cooperative societies from the current level of about 830,000. “The forthcoming Union Budget is expected to lay down a clear road map on how to achieve the above-mentioned policy objectives,” a senior official said. 

Although there are no direct estimates of the cooperative sector’s share in the country’s total gross domestic product, sectoral data underlines its economic significance. Cooperatives accounted for about 14 per cent of total agricultural credit, 25 per cent of fertiliser production and 31 per cent of sugar production, as of 2016-17. In addition, the sector commanded around 85 per cent of liquid milk distribution and roughly 15 per cent of the country’s total storage capacity. 

The implementation of the policy, framed by a high-powered panel chaired by former Union minister Suresh Prabhu, is being monitored at the national level through a two-tier mechanism chaired by Shah himself. 

Among other recommendations, the National Cooperative Policy has argued for the creation of a new national apex cooperative bank to strengthen coordination among various tiers of cooperative banks, while preserving the existing three-tier credit structure of primary agricultural cooperative societies (PACS), district central cooperative banks (DCCBs) and state cooperative banks to ensure the flow of affordable credit. 

The policy has also proposed encouraging the branding of organic, agricultural and dairy products under the ‘Bharat’ brand as an umbrella identity, while leveraging well-established state-level brands.

It further calls for the creation of a ‘Cooperative Stack’ to enable data-driven decision-making and improve service delivery across the sector. 

In addition, the policy has called upon PACS to function as ‘bank mitra’ for district cooperative banks, enabling them to provide banking products and services to members at their doorsteps.

 

Mega sector

• India currently has over 830,000 registered cooperative societies
• These include around 200,000 credit cooperatives and 600,000 non-credit cooperatives
• Non-credit cooperatives primarily operate in sectors such as housing, dairy and labour, as well as sugar, consumer goods, marketing, fishery, textile, services, processing, and hospital
• Total membership in cooperatives stands at around 300 million, of which PACS alone account for more than 130 members
• As of 2016-17, cooperatives had about a 14% share in total agricultural credit, 25% in fertiliser production, 31% in sugar production, around 85% in liquid milk distribution and roughly 15% of total storage capacity