Cooperatives Set to Drive India's $5 Trillion Economy, 56 Million Self-Employment Opportunities by 2030, Report Finds

As India moves closer to becoming a $5 trillion economy, the cooperative sector is emerging as a game-changer for self-employment and grassroots development. Primus Partners, India’s leading home-grown consultancy, has released an insightful report projecting that cooperatives will generate 56 million self-employment opportunities by 2030, driving financial inclusion, rural development, and socio-economic empowerment.

This transformative potential of cooperatives aligns with the vision highlighted at the recently inaugurated Global Cooperative Conference 2024, where Prime Minister Shri Narendra Modi emphasised the role of cooperatives in shaping a sustainable and inclusive growth story for India.

The report underscores the sector’s significant economic contribution, with cooperatives expected to account for over 10% of India’s GDP by 2030. Agricultural cooperatives, in particular, are driving this momentum, paving the way for financial empowerment across rural and urban India.

India’s cooperative network, the largest in the world, represents nearly 30% of the 30 lakh cooperative societies globally. These cooperatives play a pivotal role in empowering rural and semi-urban areas by providing affordable credit and fostering financial inclusion. Their contributions have far-reaching impacts, from enhancing agricultural productivity and supporting small-scale industries to strengthening rural economies and promoting women-led enterprises.

Opportunities and Challenges for the Sector

The report highlights the significant potential of cooperatives in transforming rural livelihoods and driving agricultural productivity by empowering farmers with access to credit and market linkages. However, key barriers persist, including limited access to technology, lack of market visibility, inadequate financing, and the need for robust capacity-building initiatives.

 To address these challenges, Primus Partners recommends the following strategies:

• Technology and Market Access: Onboard cooperatives onto platforms like the Open Network for Digital Commerce (ONDC) to streamline logistics and expand market reach. Launch targeted initiatives such as ‘Janani,’ an e-marketplace for women-led cooperatives.

• Capacity Building: Establish Centers of Excellence (CoEs) in partnership with institutions like Krishi Vigyan Kendras (KVKs) to offer training in digital tools, entrepreneurship, and modern agricultural practices.

• Financing: Expand Priority Sector Lending (PSL) and build partnerships with international agencies to provide concessional loans and grants. Additionally, leverage CSR initiatives to connect cooperatives with sustainable funding opportunities.

• Branding and Ambition Challenge: Strengthen the visibility and reputation of cooperatives by developing comprehensive branding strategies and defining long-term goals to raise their profile. Align cooperatives with the ‘One District One Cooperative’ (ODOC) model to boost recognition and scalability.

• Governance and Regulatory Challenge: Enhance governance structures within cooperatives by introducing regulatory frameworks to ensure compliance, transparency, and accountability. Implement reforms to integrate cooperatives under the RBI’s oversight, ensuring standardized operational procedures and better risk management.

"Cooperatives are critical in driving farmers' incomes and advancing an Atmanirbhar Bharat, while also contributing to India’s achievement of its SDG targets by 2030," said Ramakrishnan, Managing Director, Primus Partners. "By focusing on enhancing financial inclusion, strengthening rural economies, and fostering sustainable agriculture practices, cooperatives can create a ripple effect that benefits entire communities, laying the foundation for long-term prosperity and growth."

The report also highlights the success of the Sahyadri Model, a cooperative initiative in Maharashtra that has transformed the agricultural landscape for smallholder farmers. Founded by Vilas Shinde, Sahyadri Farms now empowers over 25,000 farmers across 48 Farmer Producer Companies (FPCs). By integrating technology and expanding market access, Sahyadri Farms has boosted farmers' incomes and enhanced their global competitiveness. With operations spanning 40,000 acres and exports to over 40 countries, the cooperative has created a sustainable revenue model, enabling small farmers to thrive in international markets while maintaining sustainable farming practices.

The report also advocates for a National Mission for Cooperative Development to integrate these strategies into a cohesive framework, supported by a Special Purpose Vehicle (SPV) to drive implementation. The mission would focus on building digital infrastructure, providing shared services, and creating tools like a dynamic dashboard to enhance cooperative efficiency and transparency.