Policy Update
Simona Miriam Hughes
Background:
The New National Cooperative Policy (NCP) 2025, is a policy framework introduced by the Government of India as a means to strengthen and modernize the cooperative sector. It functions on the vision, “Sakhar – se – Samriddhi” which means Prosperity Through Cooperation and the main goal towards achieving “Viksit Bharat by 2047”. India possesses one of the world’s largest cooperative networks with over 8.44 lakh cooperatives and more than 30 crore members, playing a vital role in fields such as dairy, fisheries, housing, rural finance and agriculture.
Prior to this policy, there was a previous cooperative policy which was introduced in 2002. But due to rapid changes brought about by Globalization, digitization and socio-economic transformation, the 2002 policy became outdated and needed enhancements. As a result of these challenges, the “Ministry of Cooperation” established in 2021, initiated the drafting of a new policy in September 2022. The drafting process included a 48 member committee chaired by Shri Suresh Prabhu, which led to the formulation of a new framework upon receiving 648 stakeholder inputs and extensive consultations.
The new policy aims to create a strong, legal, financial and institutional ecosystem by focusing on Governance reforms, Digitalization, Financial empowerment, Inclusivity, Youth Participation, and expansion into emerging sectors such as renewable energy, waste management and technology-enabled services. By focusing on these areas, the policy aims to transform cooperatives into modern, transparent and professionally managed institutions that can serve as key drivers of inclusive economic growth in India.
Functioning:
“The New National Cooperative Policy 2025” functions through a structured framework that consists of six main strategic pillars. The six pillars include strengthening institutional foundations, promoting vibrancy in cooperative business, making cooperatives “future-ready” through technology, ensuring inclusivity, expanding into emerging sectors, and building youth participation in the cooperative movement.
At the institutional level, the policy focuses on legislative improvements, streamlined governance, transparent functioning and digital integration in cooperative registrar offices, together with the creation of real-time cooperative databases for enhanced monitoring and administration. It also seeks to strengthen the “three-tier cooperative” structure that includes the “Primary Agricultural Credit Societies (PAC’s), District Central Cooperative Banks (DCCB’s) and State Cooperative Banks (SCB’s)” financially, while enabling the cooperative banks to undertake government businesses and expand financial services.
The policy promotes the development of Model Cooperative Villages, Multipurpose PACs, Rural economic clusters and branding initiatives such as the “Bharat” brand as a means to improve business operations. These also act as a means to improve market access and competitiveness. Adding onto this, it also emphasizes technology integration through a National Cooperative Stack, linkage with Agri-Stack and digital commerce platforms such as ONDC and GeM, as an attempt to make cooperatives more efficient, transparent and market-oriented.
Further, the policy ensures the participation of women, youth, SC/ST communities and differently-abled individuals, while encouraging the expansion of cooperatives into new sectors like renewable energy, waste management, healthcare, organic farming and many more. In an attempt to ensure effective implementation, a multi-tier monitoring mechanism has been proposed and this mechanism includes an Implementation Cell, a National Steering Committee and a Policy Implementation and Monitoring Committee.
Performance:
The implementation of the National Cooperative Policy 2025 was successful mainly because of the significance of the cooperative sector of India. India is currently home to over 8.44 lakh cooperative societies with over 30 crore members, making it one of the largest cooperative ecosystems in the world, accounting for more than one fourth of the global cooperatives.
The sector includes nearly 2 lakh credit cooperatives and around 6 lakh non credit cooperatives operating across areas such as agriculture, dairy, fisheries, housing, consumer services and rural finance. This “diversified” structure is known to be the strength of the cooperative sector making it an important factor and tool in grassroots economic development, particularly in rural and semi-urban areas.
The establishment of the Ministry of Cooperation in 2021 together with ith introduction of initiatives such as multipurpose PACs, cooperative digitalization, model bye-laws and integration with digital commerce platforms such as ONDC and GeM have helped in the improvement of institutional focus on cooperative development. The formulation of the new policy itself shows the growing attention towards making cooperatives more transparent, financially strong, technology driven and inclusive.
Overall, the cooperative sector’s wide membership base, extensive networking and expanding policy support indicate strong potential for future growth positioning it as an important driver of inclusive and decentralized economic development in India.
Impact:
The policy is said to have a socio-economic impact by strengthening cooperatives such as engines of inclusive growth, rural development and economic decentralization. It also aims to make cooperatives more transparent, efficient and competitive by modernising governance structures, improving financial access and promoting professional management.
It’s emphasis on digitalization with the idea of the development of a National Cooperative Stack and integration with platforms like ONDC and GeM, is likely to improve market access, operational efficiency and digital participation of cooperatives, as an attempt to help smaller markets, producers and farmers connect with wider markets for enhanced opportunities.
Similarly, the policy’s focus on women, youth, SC/ST communities and differently abled individuals can further deepen social inclusion by promoting participation in cooperative leadership and membership. To add on, the policy’s focus on areas such as renewable energy, waste management, organic farming and healthcare can generate employment, diversify rural livelihoods and support sustainable development.
Overall, the policy possesses the ability and potential to transform into modern, people-centered institutions that focuses on building a self-reliant and developed India by 2047.
Emerging Issues:
Even though the policy is seen to be having steady progress, it still seems to be facing emerging challenges and issues. Few of these issues are listed below.
Low Youth participation – One of the most important features of the policy is it’s engagement with the youth. But the same engagement becomes a challenge as the youth often show limited interest in cooperative institutions mainly due to the lack of awareness and modern career opportunities.
Uneven State- Level Reforms – Inconsistencies in governance, transparency and policy implementation may arise as a result of differences in cooperative laws across various states.
Digital infrastructure gaps – Although there has been an increase in digital infrastructure across the states, rural areas and villages still seem to be at a disadvantage as they still lack adequate digital infrastructure, technical sources and digital literacy.
Financial Constraints – Small cooperatives with a weak system may still face difficulties with limited capital, poor access to credit and operational inefficiencies.
Way Forward:
The National Cooperative Policy 2025 acts as a steady roadmap to transform India’s cooperative sector into inclusive, modern and a more technology driven pillar of national development. Moving forward, successful implementation will mostly depend on effective legal reforms, strong institutional coordination, digital adoption and sustained financial support across all cooperative sectors.
It is also important to place special emphasis on youth participation, capacity building, women engagement and inclusion of marginalized communities in order to ensure that the cooperative movement remains socially representative. Strengthening Model Cooperative villages, promoting innovation and expanding cooperatives into emerging sectors such as renewable energy, waste management, healthcare and organic farming, can further unlock new opportunities for growth.
In conclusion, the policy has the potential to position cooperatives as a major force in achieving inclusive prosperity and the vision of Viksit Bharat by 2047 as it’s focus is on Sakhar – se – Samriddhi, transparency and professional management.
Selected References and Important Links:
1. Ministry of Cooperation. (2025). National Cooperation Policy 2025. Government of India.
https://www.cooperation.gov.in/sites/default/files/2025-07/NCP%28Eng%29_23Jul2025_v5_Final.pdf
2. Press Information Bureau. (2025). National Cooperation Policy 2025 – Cooperation to Prosperity: Paving the Way for Viksit Bharat 2047. Government of India.
https://www.pib.gov.in/FactsheetDetails.aspx?Id=149229®=3&lang=2
3. Press Information Bureau. (2025). Open Network for Digital Commerce (ONDC) Updates. Government of India.
https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2090097
4. Press Information Bureau. (2025). Government e-Marketplace (GeM) Updates. Government of India.
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2107510
About the Contributor:
Simona Miriam Hughes is a research and editorial associate intern at IMPRI. She is currently pursuing her Master’s degree in International Relations at Loyola College and has worked in several Non Governmental Organisations during her Undergraduate years. She has attended the 2025 Global Citizenship programme which is associated with the Washington DC university.
Name of the Reviewers:
The article was reviewed by Ms. Lubina Dua and Ms. Samyuktha Balachandran.
Acknowledgement:
The author would like to extend her thanks to the whole of the IMPRI team and the reviewers for their feedback and support.
Disclaimer
All views expressed in the article belong solely to the author and not necessarily to the organization.
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