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Cooperative Sector Reform: Amit Shah Outlines National Cooperative Policy (2025–2045) for PACS Expansion

Explore how the new Cooperative Sector Reform framework is set to transform PACS expansion nationwide. This concise analysis highlights Amit Shah’s National Cooperative Policy (2025–2045) and what it means for the future of rural development.

Deepak Singh

02 Jul 2025 — 8 min read

TL;DR: Union Minister Amit Shah announced the National Cooperative Policy (2025–2045), aiming to establish 2 lakh Primary Agricultural Credit Societies (PACS) by February 2026 to revitalize India’s cooperative sector. This ambitious plan focuses on Cooperative Policy, PACS expansion, and economic empowerment at the grassroots level.

Introduction: A New Dawn for India’s Cooperatives

Imagine a small farmer in a remote Indian village, struggling to access affordable credit to grow his crops. For decades, cooperatives have been his lifeline, yet many have weakened over time. Enter Union Home and Cooperation Minister Amit Shah, who, on June 30, 2025, unveiled plans for the National Cooperative Policy (2025–2045), a bold vision to transform India’s cooperative sector. This policy isn’t just about numbers—it’s about empowering 1.4 billion people by strengthening cooperative institutions like Primary Agricultural Credit Societies (PACS). By targeting 2 lakh PACS by February 2026, the government aims to bring prosperity to every village, making Cooperative Policy, PACS expansion a cornerstone of rural economic growth.

Why does this matter? Cooperatives are the backbone of India’s rural economy, supporting farmers, artisans, and small entrepreneurs. This article dives into Shah’s vision, exploring how the National Cooperative Policy and PACS expansion will reshape India’s cooperative landscape, create jobs, and foster sustainable development.

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What Is the National Cooperative Policy (2025–2045)?

The National Cooperative Policy (2025–2045) is a 20-year roadmap to revive and modernize India’s cooperative sector. Announced by Amit Shah during a meeting of state cooperation ministers, the policy aims to establish cooperatives in every Indian village by 2030, with a specific target of setting up 2 lakh PACS by February 2026. It addresses long-standing issues like outdated laws, limited activities, and lack of transparency, ensuring cooperatives become vibrant economic hubs.

Key Objective: Empower 1.4 billion Indians through cooperative-driven entrepreneurship.
Timeline: Effective from 2025 to 2045, aligning with India’s centenary of independence.
Focus Areas: PACS expansion, digital transformation, and tailored state policies.

This policy builds on the momentum of the International Year of Cooperatives (IYC) 2025, emphasizing sustainable development and economic inclusion.

Why Are Cooperatives Important for India’s Economy?

Cooperatives have been a cornerstone of India’s rural economy since the early 20th century. They pool resources to provide affordable credit, market access, and essential services to members, particularly farmers and small-scale entrepreneurs. However, Shah highlighted three reasons for their decline:

Outdated Laws: Cooperative laws haven’t evolved with changing economic needs.
Limited Scope: Many cooperatives failed to diversify their activities.
Nepotism: Recruitment practices often lacked transparency.

The National Cooperative Policy addresses these by modernizing laws, promoting transparency, and encouraging Cooperative Policy, PACS expansion to diversify services like dairy, fisheries, and warehousing.

What Are Primary Agricultural Credit Societies (PACS)?

Primary Agricultural Credit Societies (PACS) are village-level cooperative institutions that provide short-term credit, seeds, fertilizers, and other agricultural inputs to farmers. They also facilitate marketing and storage solutions. Currently, India has about 95,000 PACS, but only 63,000 are operational, highlighting the need for revitalization.

The PACS expansion plan aims to establish 2 lakh new PACS by February 2026, ensuring every village has access to cooperative services. This aligns with the Cooperative Policy, PACS expansion strategy to make PACS multi-purpose, covering sectors like:

Dairy and fisheries
Warehousing and storage
Micro-ATMs and e-governance services

By linking PACS to a unified digital platform, the government aims to enhance efficiency and transparency.

How Will the National Cooperative Policy Transform PACS?

The National Cooperative Policy introduces several reforms to make PACS vibrant economic entities:

Modernizing PACS Operations

The government has approved a ₹2,516 crore project to computerize 63,000 functional PACS by 2026–27, linking them to a national software network via NABARD. This digital transformation ensures:

Real-time data tracking
Improved financial inclusion
Reduced operational costs

Example: A farmer in Uttar Pradesh can now access credit instantly through a digitized PACS, reducing dependency on exploitative moneylenders.

Expanding PACS Roles

PACS are transitioning from credit-focused entities to multi-purpose hubs. The Model Bye-Laws introduced by the Ministry of Cooperation allow PACS to engage in over 25 new sectors, including:

Dairy and fisheries cooperatives
Grain storage under the world’s largest decentralized storage scheme
Common Service Centres (CSCs) for e-governance

This Cooperative Policy, PACS expansion approach ensures PACS meet diverse community needs.

Tailored State Policies

Each state must formulate its cooperative policy by January 31, 2026, aligning with local needs. For instance, Maharashtra, with 25% of India’s cooperatives, can focus on urban cooperative banks, while Bihar may prioritize grain storage.

What Role Does Tribhuvan Sahkari University Play?

To address the skill gap in the cooperative sector, the government established Tribhuvan Sahkari University (TSU) in 2025. TSU will:

Train cooperative leaders and staff
Promote research in cooperative models
Ensure every state has at least one TSU-affiliated training institute

This initiative supports Cooperative Policy, PACS expansion by building a skilled workforce to manage the growing network of PACS.

How Will PACS Expansion Create Jobs?

The target of 2 lakh PACS by February 2026 is more than a number—it’s a catalyst for job creation. By diversifying PACS activities, the policy enables:

Entrepreneurship: Farmers and artisans can access initial capital through PACS to start small businesses.
New Sectors: PACS entering dairy, fisheries, and warehousing will create jobs in rural areas.
Digital Roles: Computerization will generate demand for tech-savvy cooperative staff.

Shah emphasized that cooperatives are the only way for people with limited capital to achieve significant economic impact, aligning with the Cooperative Policy, PACS expansion vision.

What Is the Role of the National Cooperative Database?

The National Cooperative Database, launched by the Ministry of Cooperation, is a critical tool for achieving the policy’s goals. It:

Maps 2.64 lakh primary cooperative societies (Phase-I completed in 2023)
Tracks multi-state cooperatives and other sectors in Phases II and III
Integrates with other government databases for seamless coordination

This database ensures that PACS expansion is data-driven, helping the government identify uncovered villages and prioritize new PACS setups.

How Does the Policy Support Sustainable Development?

The National Cooperative Policy aligns with the UN International Year of Cooperatives 2025, themed “Cooperatives Build a Better World.” Cooperatives contribute to sustainable development by:

Economic Inclusion: Providing affordable credit to marginalized communities
Environmental Focus: Promoting natural farming through cooperatives like Bharatiya Beej Sahkari Samiti Limited
Community Resilience: Strengthening social bonds through resource sharing

The Cooperative Policy, PACS expansion strategy ensures cooperatives address social, economic, and environmental challenges, supporting the UN’s Sustainable Development Goals (SDGs).

What Are the Challenges in Implementing the Policy?

Despite its ambition, the National Cooperative Policy faces challenges:

Tight Timeline: Achieving 2 lakh PACS by February 2026 requires rapid coordination between states and the Centre.
Funding Needs: Expanding PACS and digitizing operations demand significant investment.
Resistance to Change: Some cooperatives may resist new bylaws or transparency measures.

To overcome these, the government is leveraging inter-ministerial committees and partnerships with NABARD, NDDB, and NFDB.

How Are States Contributing to PACS Expansion?

States play a pivotal role in the Cooperative Policy, PACS expansion plan. Key suggestions include:

Maharashtra: Proposed an age limit of 70 for cooperative board members to improve governance.
Haryana: Suggested allowing foreign direct investment (FDI) to enhance PACS infrastructure.
Uttar Pradesh: Recommended leveraging PACS-owned land for resource expansion.

These state-specific inputs ensure the policy is flexible and locally relevant.

What Are the Financial Reforms for Cooperatives?

The policy strengthens urban cooperative banks and credit societies by:

Bringing them under the Banking Act for better regulation
Encouraging RBI’s flexible approach to resolve issues
Promoting transparency in recruitment and operations

These reforms support PACS expansion by ensuring financial stability across the cooperative sector.

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Cooperative Sector Reform: Amit Shah Outlined the National Cooperative Policy (2025–2045), Targeting 2 Lakh PACS by Feb 2026 – Frequently Asked Questions

What is the National Cooperative Policy (2025–2045)?

The National Cooperative Policy (2025–2045) is a 20-year plan to modernize India’s cooperative sector, focusing on Cooperative Policy, PACS expansion to establish 2 lakh PACS by February 2026 and ensure every village has a cooperative by 2030.

Why is PACS expansion important?

PACS expansion strengthens rural economies by providing affordable credit, diversifying services, and creating jobs, aligning with the Cooperative Policy, PACS expansion strategy to empower communities.

How will the government achieve 2 lakh PACS by 2026?

The government is digitizing PACS, introducing Model Bye-Laws, and using the National Cooperative Database to identify uncovered villages, ensuring rapid PACS expansion.

What role does Tribhuvan Sahkari University play?

Tribhuvan Sahkari University trains cooperative leaders, supporting Cooperative Policy, PACS expansion by building a skilled workforce.

How does the policy promote sustainable development?

It aligns with the UN’s SDGs by promoting natural farming, economic inclusion, and community resilience through cooperatives.

What challenges does the policy face?

Challenges include tight timelines, funding needs, and resistance to change, addressed through inter-ministerial coordination and digital tools.

Conclusion: A Cooperative Future for India

The National Cooperative Policy (2025–2045) is a game-changer for India’s rural economy. By targeting 2 lakh PACS by February 2026, the policy, led by Amit Shah, aims to empower farmers, create jobs, and promote sustainable development. The Cooperative Policy, PACS expansion strategy ensures every village becomes a hub of economic activity. Want to learn more? Check out our guides on rural economic development or share your thoughts in the comments!