Cooperatives Rising: How Local Communities Are Shaping India’s Growth

The co-operative movement in India is a strong driving force of inclusive development and social growth. Based on the ethos of ‘Vasudhaiva Kutumbakam’ (the world is one family), the co-operatives allow local members with the opportunity to share resources and meet the needs of the community. The co-operative movement has unobtrusively yet mightily grown to be an inclusive growth pillar. With over eight lakh registered co-operative societies across the country, co-operatives are enabling millions to finance, market their produce, generate local employment, and build community resilience.

Once synonymous with milk and fertilisers, co-operatives today operate across diverse sectors - from agriculture and housing to retail, construction, and women’s self-help. Their success lies in the simple idea of collective ownership: individuals coming together to meet their common needs, pooling resources, and sharing profits.

Success stories on the ground

The Uralungal Labour Contract Co-operative Society (ULCCS) is one of the oldest and largest co-op in India and was founded in 1925 by local labourers and workers. Today, it undertakes major infrastructure projects nationwide and employs over 11,500 workers. Its project management and an egalitarian structure have won national awards and was ranked second globally in its sector.

The Gujarat Co-operative Milk Marketing Federation (GCMMF) branded ‘Amul,’ is another big name in the co-operative space. It connects 3.6 million dairy farmers in Gujarat and collects and processes ~300 lakh litres of milk every day. Amul’s farmer-owned model lifted millions of rural families out of poverty and inspired other states to build their own milk corps.

Lijjat Papad - This famous corporation began in 1959 when seven women pooled Rs. 80 (US$ 0.89) to make papads in Mumbai. Today, the co-op employs over 45,000 women from many states and has expanded to producing other fast moving consumer goods empowering thousands of women along the way.

The Sittilingi Organic Farmers’ Association (SOFA) started in 2004 with just four tribal farmers in Sittilingi, Tamil Nadu. It expanded to ~4,000 farmers over the next decade. The co-op now aggregates crops and sells them under the brand ‘Kaashivallari,’ ensuring quality while also paying farmers a bit more than the market rate.

These examples reveal how cooperatives serve not only farmers and artisans, but also urban consumers, women entrepreneurs, and skilled workers. Be it rural or urban markets, they are woven into India’s economic fabric and will continue to be a major contributor to the story.

Why cooperatives work: Economic and social impact

• Job Creation and Local Income: Co-operatives create jobs through their community-owned business model in which they employ people locally and share the work among members. Unlike large corporations, co-ops invest back into their communities, building skills and livelihoods.
• Fair Prices and Risk Sharing: By aggregating produce and bypassing middlemen, co-operatives help members get better prices. Amul and SOFA members earn higher-than-market rates. Co-operatives also distribute profits and reduce risk during crises, as seen during the COVID-19 lockdown when many supported members with interest-free loans.
• Women’s Empowerment and Social Inclusion: Co-operatives give ownership and decision-making roles to women and marginalised groups. Lijjat’s model, for example, allows women to earn at home while gaining full control over their enterprise. Tribal farmers in co-ops like SOFA also take on leadership roles which were previously denied to them in other organisations.
• Infrastructure and Services in Villages: Thousands of Primary Agriculture Cooperative Credit Societies (PACS) now function as multi-service centres. Over 35,000 have been designated fertiliser outlets. More than 2,400 PACS operate Jan Aushadhi stores. Co-operative banks issue Kisan Credit RuPay cards, ATMs, and mobile banking to members, boosting rural financial inclusion.
• Self-Reliance and Localised Economies: Co-operatives build self-sufficiency. They stabilise prices, offer better bargaining power, and ensure that economic value stays within the community. This aligns the vision of Atmanirbhar Bharat, a version of self-reliant India grounded in village-level strength.

Government initiatives

Recognising their importance, the Government of India launched dedicated support mechanisms for co-operatives:

Ministry of Cooperation

In 2021, a new Ministry of Cooperation was created to offer a distinct administrative, legal and policy framework to enhance the cooperative movement in country. It aims to simplify procedures to facilitate ease of doing business to co-operatives and facilitation of multi-state co-operative societies.

Grant-in-Aid for National Cooperative Development Corporation (NCDC)

A Rs. 2,000 crore (US$ 222 million) grant to the NCDC from FY25-29 will help mobilise up to Rs. 20,000 crore (US$ 2.22 billion) in lending for cooperative projects, including working capital, new businesses, and agri-infrastructure. It is estimated that about 2.9 crore members of 13,288 Cooperative societies in various sectors like Dairy, Livestock, Fisheries, Sugar, Textile, Food Processing, Storage and Cold Storage, Labour and Women led cooperatives in the country will be benefited.

Cooperative Development Fund

Administered by NABARD, the fund has disbursed Rs. 327 crore (US$ 36 million) for capacity building, staff training, and technology upgrades. Over Rs. 250 crore (US$ 28 million) has been earmarked for computerising 63,000 PACS and converting them into multi-purpose centres.

Digitisation and Expansion of PACS

A national plan with Rs. 2,516 crore (US$ 279 million) budget is underway to digitise all PACS. By March 2024, over 15,700 had already been computerised. Additionally, nearly 9,000 new PACS will be created in unserved blocks, especially for dairy, fishery, and organic farming.

Tribhuvan Sahakari University (TSU)

Established in 2025, TSU is India’s first university dedicated to cooperative education, based in Anand, Gujarat. It offers degrees in co-operative law, finance, and management, helping to professionalise the sector.

Integration with National Schemes

PACS have been notified as delivery points for multiple government schemes ranging from fertiliser supply (PM Kisan Samridhi) to e-governance and retail energy distribution. They are also being linked with social impact investments and digital market platforms.

Together, these steps are transforming co-operatives from small societies into well-governed, tech-enabled, and profitable institutions. The emphasis is not just on growth, but on scale, transparency, and local empowerment.

The road ahead

India’s co-operative movement is entering a new phase. With support from the Centre and growing digital capabilities, co-operatives are expanding into e-commerce, agri-export, organic food processing, and green energy. Platforms connecting investors to co-op entrepreneurs are also emerging. For industry professionals and investors, co-operatives offer long-term financial returns and a deep social impact.

As India’s consumer base shifts to rural areas and Tier II and III towns, locally rooted enterprises like co-ops offer sustainable market access and strong community backing. In short, India’s co-operatives are no longer a legacy institution. They are modern engines of grassroots prosperity, transparency and inclusivity. With the right blend of policy, capital and participation, co-operatives can redefine India’s development model: bottom-up, community-driven, and future-ready.

FAQs

How do co-operatives support India’s growth?

They enable inclusive development by giving communities access to finance, market linkages, local jobs, and shared resources.

Why are co-operatives effective for local communities?

They offer job creation, fair prices, shared profits, and risk reduction. Members earn better-than-market rates, women and marginalised groups gain leadership roles, and communities build self-reliance and stronger bargaining power.

How many co-operative societies operate in India?

India has over eight lakh registered co-operative societies across agriculture, housing, retail, construction, and women’s self-help.

What new institutions and integrations are supporting co-operatives?

Tribhuvan Sahakari University, established in 2025 in Anand, Gujarat, is India’s first cooperative university offering courses in cooperative law, finance, and management. PACS have been designated as delivery points for fertiliser supply, e-governance services, retail energy distribution, and social-impact-linked digital market platforms.

Which emerging sectors are co-operatives entering?

They are expanding into e-commerce, agri-export, organic food processing, and green energy, supported by digital platforms and investor linkages.