July 2023 :  Yojana  Magazine GIST : Micro Notes or Revision Notes : Yojana Magazine Summary


Sahakhar Se Samriddhi (Prosperity through Cooperation)

India’s Cooperative Movement

  • Rich history with 8.54 million cooperatives (80% non-credit, 20% credit)
  • Presence in 98% of villages with 290 million members

Government Commitment

  • Prioritizes cooperatives and explores new areas for them
  • Emphasizes “SQUAD” approach:
    • S – Self-reliance (Atmanirbhar)
    • Q – Quality Performance
    • U – Unshakable Cooperative Movement
    • A – Accountability in Governance
    • D – Development through Modern Technology

Recent Initiatives

  • Model Bye-Laws for PACS:
    • Designed to revitalize Primary Agricultural Credit Societies (PACS)
    • 22 States/UTs adopted model bye-laws for broader business activities
  • Integrating PACS with FPOs:
    • Cooperatives to support Farmer Producer Organizations (FPOs)
    • Government allocates additional 1,100 FPOs to National Cooperative Development Corporation (NCDC)
    • Integration allows PACS to expand into areas like production, processing, storage, etc.
  • Involving PACS in Oil and Energy:
    • PACS now eligible for petrol/diesel and LPG dealerships
    • Existing PACS can convert bulk consumer status to retail outlets
    • PM KUSUM Scheme allows PAC members to install solar panels for income generation

Developing National Database

  • Ministry of Cooperation (MoC) creating a comprehensive database of cooperatives
  • Aims to capture sector-specific information for data analysis and policy formulation

Consolidating Cooperative Credit

  • Government committed to strengthening the 3-tier cooperative credit system
  • 130 million farmers linked to cooperatives through PACS
  • Focus on effective financing and refinancing for diverse credit needs
  • Plans to computerize PCARDBs and SCARDBs for improved operations

Conclusion and Way Forward

  • Key challenges to address for smooth progress:
    • Regional and sectoral imbalances
    • Regulatory complexities
    • Governance, leadership, and operational systems
    • Professional management
    • Structural reforms


Strategic Diversification of Cooperatives and Business Competitiveness

Why Diversify?

  • Businesses need diversification to avoid stagnation and ensure future growth.

Cooperatives and Diversification

  • Cooperatives can be profit-sharing or non-profit entities serving members’ needs.
  • Strategic diversification is crucial for their commercial viability and vibrancy.
  • Strategic decisions align with an organization’s vision and mission.

Need for Diversification by Cooperatives

  • Cooperatives at all levels need to diversify to stay relevant and competitive.

Viable Cooperative Business Strategies

  • Cooperatives need clear vision, mission, objectives, and purpose.
  • Strategic diversification involves analyzing five aspects of strategic management:
    1. Goal Setting: Define goals and their purpose.
    2. Goal Analysis: Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats).
    3. Strategy Formulation: Develop options to achieve goals.
    4. Strategy Implementation: Put plans into action, allocate resources, and identify tactics.
    5. Strategy Monitoring: Review progress against timelines.


  • By leveraging strengths and aligning diversification with mission and values, cooperatives can achieve growth and competitive advantage in new markets and product lines.



Empowering Agriculture Credit Cooperatives Through Digitisation

The Role of Cooperative Credit Institutions

  • Play a vital role in rural credit mobilization and agricultural production.
  • Short Term Rural Cooperative Credit Structure (STCCS) is a 3-tier system:
    • State Cooperative Banks (StCBs) at the state level
    • District Central Cooperative Banks (DCCBs) at the district level
    • Primary Agriculture Credit Societies (PACS) at the village level
  • Provide credit to farmer members and promote social and economic development.
  • Farmers are members/owners of PACS.
  • Regulated by RBI and supervised by NABARD.
  • Current status:
    • 34 StCBs with 2,000+ branches
    • 351 DCCBs with 14,000+ branches
    • 95,000 PACS (65,000 functionally viable)

Issues with Cooperative Credit

  • Limited service offerings beyond credit (financial, advisory, marketing)
  • Inability to compete due to lack of technology adoption
  • Issues with office management, transparency, governance, product innovation, service delivery

Technology Adoption and Cooperative Credit

  • Ministry of Cooperation’s establishment strengthens the cooperative movement.
  • Digitisation of STCCS has two aspects:
    • Digitisation of core operations
    • Technology adoption for customer interface, service delivery, and decision-making
  1. Digitisation of STCCS Core Operations
  • StCBs and DCCBs use CBS (Centralised Online Real-time Exchange) for:
    • Maintaining electronic accounts
    • Strengthening regulatory mechanisms
    • Enabling anytime, anywhere banking
  • Robust office management systems (ERP) are needed for:
    • Accounting
    • Internal audit
    • Project management
    • Service delivery
    • Human resources
    • Marketing
  • Standardized technological solutions and office management systems are recommended.

PACS Computerisation

  • Government of India’s PACS computerisation policy aims to increase efficiency.
  • Rs 2,516 crore project to computerize 63,000 PACS over 5 years.
  • Benefits:
    • Speedy loan disposal
    • Lower transaction costs
    • Faster audits
    • Reduced accounting imbalances
  • PACS account for:
    • 41% (3.01 crore farmers) of Kisan Credit Card (KCC) loans
    • 95% of KCC loans to small and marginal farmers
  1. Technology Adoption for Customer Interface, Service Delivery, and Decision-Making
  • Needs of the sector:
    • Cost-effective, efficient, faster, and secure banking services
    • Infrastructure and logistics facilitation
    • High-end value-chain financing
    • Shared tech resources through collaboration
  • Opportunities:
    • Mobile banking using smartphones in rural areas
    • Using drones for agri-insurance product efficiency and accuracy


  • With digitization, cooperative credit institutions can better serve Indian agriculture.
  • Technological upgradation can reposition agriculture credit cooperatives as agents of rural prosperity.



Ushering Development Pathways for Non-Credit Cooperatives

Indian Cooperative Landscape

  • Around 8.54 million cooperatives with 290 million members operate in India.
  • Growth and evolution vary across states due to diverse focus areas and government approaches.

Cooperative Structure

  • Governed by the Cooperatives Society Act, 1912, Mutually Aided Cooperative Thrift Societies Act, and Multi-State Cooperative Societies Act, 2002.
  • Two types:
    • State Cooperative Societies (under State Governments)
    • Multi-State Cooperative Societies (under Central Government)

Development Pathways for Non-Credit Cooperatives

  1. Convergence with MSME Programs:
    • Over 16,000 cooperatives registered as MSMEs on the Udyam portal.
    • MSMEs benefit from schemes like Cluster-based programs offering:
      • Funds for infrastructure development (common facility centers, processing centers, etc.)
      • Skill development programs
      • Marketing linkages (domestic and international)
  1. Awareness, Training & Mentoring:
    • Conduct awareness programs for capacity building.
    • Link cooperatives with Skill Development Programs for staff/worker skill upgradation.
    • Government initiatives:
      • National-Level Multi-State Cooperative Seed Society for seed production, processing, marketing, and research & development.
      • Multi-State Cooperative Organic Society for organic product aggregation, certification, marketing, etc.
  1. Technology & Digitalization:
    • Cooperatives need to embrace technology and digitalize processes to stay relevant and competitive.
    • Consider cooperatives as clusters and link them with relevant MSME cluster schemes for infrastructure development.


  • A well-defined strategy is needed to link or integrate state cooperatives into multi-state cooperatives for sustainable growth, especially in areas with a large potential member base.



A Blue Ocean for Economic Development (Fisheries Sector)

India’s Fisheries Sector

  • 3rd largest fish producer globally (7.93% of global production)
  • 2nd largest aquaculture fish producer globally
  • Contributes 1% to national GDP
  • Employs over 2.8 crore fishers and fish farmers
  • Generates over Rs 50,000 crore in annual export earnings

Government Initiatives

  • Pradhan Mantri Matsya Sampada Yojana (PMMSY): Launched in 2019 with a budget of Rs 20,050 crore to boost fish production and infrastructure.
  • Fisheries & Aquaculture Infrastructure Development Fund (FIDF): Established in 2018 with a dedicated corpus of Rs 7,522 crore.
  • Blue Revolution (2014): Initiative to boost fish production and infrastructure development.
  • Ministry of Cooperation (established in 2021): Aims to strengthen the fishery cooperative movement.

Role of Fishery Cooperative Federation

  • National Federation of Fishers’ Cooperatives Ltd. (FISHCOPFED): Apex organization for fishery cooperative development in India.
  • Works to empower fishery cooperatives and provides social security (accidental insurance) to fishers.
  • Collaborates with National Fisheries Development Board (NFDB) to accelerate fishery development.

Way Forward

  • Fishery cooperatives need to adopt digital technology to enhance services and reach.
  • Support from NABARD, NCDC, and NFDB is crucial to bridge existing gaps.
  • Provide Group Accident Insurance Scheme (GAIS) coverage to over 10 million fishers in 2-3 years.
  • Offer online training on PMMSY and cooperative principles to fishery cooperative members.
  • Provide marketing support for sustainable business plans and domestic market growth.
  • Computerize primary fishery cooperatives to accelerate sectoral growth.


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