India’s Cooperative Network : Emerges as a Pillar of Inclusive Economic Growth

India’s Cooperative Network: India’s cooperative sector has quietly transformed into one of the largest and most structured economic ecosystems in the world. Over the past three years, steady policy support, improved data systems, and renewed interest in community-based enterprises have helped cooperatives expand both in number and social reach. What was once viewed as a fragmented and largely rural framework has now evolved into a nationally integrated economic network connecting hundreds of millions of people across regions and occupations.

Evolution of the Cooperative Ecosystem

The scale of India’s cooperative movement has grown at a remarkable pace. Official and sector-level estimates suggest that the number of registered cooperatives is now close to 8.5 lakh, with total membership approaching 32 crore. This expansion has not happened overnight. Instead, it reflects a gradual process of registration, consolidation, and improved visibility of societies that were previously underreported or scattered across different administrative systems.

Data from the National Cooperative Database indicates that by late 2023, India had around 7.94 lakh cooperatives with nearly 29.08 crore members. By December 2024, the number of functional cooperatives was estimated at about 6.21 lakh, while membership hovered near 28.7 crore. Continued registrations and more accurate mapping through 2025 added almost three crore members in just over two years, highlighting the depth of grassroots participation in cooperative institutions.

Policy Support and Institutional Reforms

One of the key drivers behind this expansion has been a renewed policy focus on grassroots economic sectors. Cooperatives operating in agriculture, dairy, fisheries, credit, housing, and small service activities have benefited from targeted reforms and administrative attention. The emphasis has been on strengthening local economies, improving access to finance, and enabling collective ownership models that protect small producers and consumers.

Equally important has been the consolidation of records under a single national database. Earlier, many cooperatives existed only on paper or were registered at local levels without consistent reporting. Unified digital mapping has helped policymakers understand the real size of the sector and design more effective support mechanisms.

Regional Distribution and Membership Patterns

The cooperative movement is not evenly distributed across India, but its regional spread reflects local economic and social conditions. Maharashtra leads the country with more than 2.21 lakh cooperatives and close to 5.8 crore members. Southern states such as Karnataka and Kerala report very high membership relative to the number of registered societies, indicating strong community participation and trust in cooperative models.

Other major contributors include Gujarat, Telangana, Uttar Pradesh, Bihar, and West Bengal, which together account for several crore members. In many regions, cooperatives serve as multi-purpose institutions. A single household may be linked to a farming cooperative, a savings or credit society, and a consumer or production unit. This interconnected structure explains why cooperatives have a wide social footprint even when their absolute numbers appear modest compared to private enterprises.

Social and Economic Significance

Cooperatives play a unique role in linking economic activity with social inclusion. By pooling resources and sharing risks, they allow small farmers, artisans, and service providers to participate in markets that would otherwise be dominated by large corporations. This model supports income stability, local employment, and community decision-making.

Globally, cooperatives are estimated to support around 10 percent of total employment. India alone accounts for roughly 27 percent of cooperatives worldwide, underlining the country’s importance in the international cooperative movement. Around 15 Indian cooperatives have featured in global rankings of the largest cooperative enterprises, demonstrating that the model can operate successfully at scale while retaining its community-oriented character.

Strength of the Financial Cooperative Segment

The financial arm of the cooperative sector remains particularly significant. As of March 2025, India had 1,457 urban cooperative banks. Together, these institutions held assets worth approximately Rs 7.38 trillion and deposits of around Rs 5.84 trillion. These banks cater primarily to small businesses, salaried individuals, and local communities that may not always find tailored services in large commercial banks.

Beyond urban banks, rural credit societies and cooperative banks continue to be critical sources of affordable finance in semi-urban and rural areas. Their presence helps reduce dependence on informal lending and supports financial inclusion at the grassroots level.

Future Outlook for Cooperatives in India

Looking ahead, the cooperative sector is expected to remain a key pillar of India’s inclusive growth strategy. Continued digitisation, transparent governance, and professional management will be essential to sustain momentum. As data quality improves and policy frameworks mature, cooperatives are likely to expand their role in emerging areas such as renewable energy, logistics, and digital services.

The past few years have shown that when supported by coherent policy and reliable data systems, cooperatives can combine scale with social purpose. India’s experience suggests that community-based economic institutions still have a vital role to play in a modern, fast-growing economy.