Redefining and rejuvenating India’s co-operative sector

The cooperative sector in India has had its share of successes, albeit in some select domains. One great example of it is Anand-based Amul, which has changed the fortune of farmers in Gujarat. To leverage the inherent potential of the cooperative sector, the Narendra Modi government has created a separate ministry of cooperation with the aim to promote and strengthen the co-operative societies at the grassroot level.

The ministry of cooperation plans to set up more than three lakhs primary agricultural credit societies (PACS) across the country in the next five years, covering most of the gram panchayats with community ownership model at its core. Today around one lakh PACS operate in various states, which means that on an average one co-operative society is catering to the needs of about six villages. These PACS perform various functions, including running ration shops, procurement centres for crops for state agencies and supply of essential and other commodities to its members.

In its 2004 report regarding the restructuring of rural credit institutions, the Vaidyanathan Committee had recommended sweeping changes in the functioning of PACS like improving the quality of services, transparency in its functioning and their modernisation and computerisation among others.

Though the Modi government has been spending crores on the revival of these co-operatives, the real transformation of India’s co-operative sector now looks possible under the newly-formed ministry of cooperation. But the real challenge lies in the scaling of the number of PACS from one lakh to over three lakhs in the next five years.

One way to quicken the transformation and bring reforms in the co-operative sector is the ministry of cooperation collaborating with the Common Service Centres (CSCs), a special purpose vehicle under the ministry of electronics and IT. With over four lakh CSCs operating in rural India covering almost 80 per cent of India’s villages and gram panchayats, the ministry of cooperation’s ambitious rollout of operating three lakh co-operatives will happen from the very first day.

CSCs already have a good experience of working and delivering Government to Citizen (G2C) and Business to Consumer (B2C) services -- from disbursing pensions and financial services to implementing government schemes and programmes, almost all the sections of rural India are today directly touched by the services being offered by CSCs in rural India which has access to the remotest areas of the country. In fact, CSCs are today operating in the same way the ministry of cooperation has modelled the co-operative sector to function. This collaboration will promote the concept of Gram Swaraj and help in making India “Atma Nirbhar” in its true sense.

India’s digital transformation will be incomplete if its co-operative sector is unable to reap the benefits of Digital India, one sector in which the CSCs have gained expertise. Without the inclusion of villagers and rural folk, the dream of creating a digitally inclusive society will remain unfulfilled. India’s co-operative sector needs to align with the government's goal of creating a Digital India, and CSCs can help in achieving that goal.