The Economic Survey 2025–26, tabled by Union Finance Minister Nirmala Sitharaman in the Lok Sabha on Thursday, places cooperatives at the centre of India’s economic and agricultural transformation. From regulatory simplification to expanded rural credit and digital integration, the Survey highlights cooperatives as key enablers of the Viksit Bharat vision.
A major reform highlighted in the Survey is the Reserve Bank of India’s (RBI) comprehensive overhaul of its regulatory instructions.
More than 9,000 circulars and guidelines have been consolidated into 238 function-specific Master Directions for different categories of regulated entities. Importantly for the cooperative sector, instructions issued by NABARD to Regional Rural Banks (RRBs), State Cooperative Banks and Central Cooperative Banks have also been consolidated in consultation with NABARD.
As part of this exercise, 9,446 circulars are being repealed, 3,809 merged into Master Circulars and 5,673 declared obsolete, significantly reducing compliance burden and improving regulatory clarity.
The Survey notes that adoption of Artificial Intelligence (AI) in India’s financial system remains at a nascent stage, with only around 21 per cent of banks and financial institutions implementing or developing AI solutions.
While larger banks lead adoption, many urban cooperative banks and smaller NBFCs face constraints such as limited IT budgets, inadequate data infrastructure and shortage of skilled manpower. Even among early adopters, AI use remains basic, largely confined to chatbots, process efficiency and customer engagement, underlining the need for capacity-building in the cooperative banking ecosystem.
On agriculture, the Survey reiterates the crucial role of cooperatives in delivering income support, credit and market access to farmers. Initiatives such as PM-KISAN, Per Drop More Crop (PDMC), promotion of organic and alternative fertilisers, e-NAM, and the strengthening of Farmer Producer Organisations (FPOs) and Primary Agricultural Credit Societies (PACS) have supported farm incomes and sustainability.
However, uneven progress in seed availability and adoption of newer varieties persists, prompting calls for stronger extension services and deeper involvement of FPOs, PACS and Self Help Groups (SHGs).
Institutional credit delivery continues to expand, with Ground Level Credit disbursement reaching Rs 28.69 lakh crore in FY25, surpassing the target. Cooperative banks play a significant role in both short-term and term lending.
The Kisan Credit Card (KCC) scheme had 7.72 crore operative accounts with outstanding credit of Rs 10.20 lakh crore as of March 31, 2025. The Kisan Rin Portal, integrating cooperative banks along with commercial banks and RRBs, has flagged Rs 1,080.88 crore in duplicate or excess claims, strengthening financial discipline.
The Survey also highlights the revitalisation of the cooperative movement. PACS are being transformed into decentralised, multipurpose institutions through model bye-laws allowing diversification into over 25 activities.
More than 54,000 PACS have been onboarded onto ERP platforms, with over 43,000 live. By March 2025, over 18,000 new multipurpose cooperative societies had been registered, reinforcing cooperatives as central to India’s inclusive and sustainable growth agenda.
