Amit Shah to launch several projects as Ministry of Cooperation completes five years
The Ministry of Cooperation celebrated its 5th Foundation Day on July 6, 2026, at Bharat Mandapam, New Delhi, with the launch of several new initiatives.
The foundation stone was laid for 47 new grain storage godowns in the cooperative sector, while 85 godowns were inaugurated and 135 godowns transferred — all part of the World's Largest Grain Storage Plan being implemented through Primary Agricultural Credit Societies (PACS).
Two technology platforms were unveiled: (a) Sahakar CBS — a centralised core banking solution for Urban Cooperative Banks; and (b) Sahakar Sahyogi — a conversational AI-powered platform to provide advisory and transactional services for Urban Cooperative Banks and their members.
The long-term goal of the grain storage plan is to create 700 lakh tonne storage capacity within five years, with an investment of ₹1.25 lakh crore, targeting 100% storage sufficiency before 2027.
Over 50,000 PACS are being transformed into e-PACS for digital empowerment, integrating them into the national digital financial ecosystem.
Ministry of Cooperation — Constitutional and Policy Basis
The Ministry of Cooperation was created in July 2021 as a dedicated nodal ministry for the cooperative sector — the first time a standalone ministry was carved out for cooperatives at the Union level (previously, cooperation was part of the Agriculture Ministry's mandate). The constitutional basis for promoting cooperatives rests in two provisions: Article 43B of the Constitution (a Directive Principle, inserted by the 97th Constitutional Amendment Act, 2011), which directs the State to promote the voluntary formation, autonomous functioning, democratic control, and professional management of cooperative societies; and Part IXB (Articles 243-ZH to 243-ZT, also inserted by the 97th Amendment), which provides a constitutional framework for state-level cooperative societies. The Supreme Court in 2021 held that Part IXB applies only to multi-state cooperative societies and societies in Union Territories — not to state-registered cooperatives, where state legislatures remain supreme.
Key Details
- Ministry of Cooperation established: July 2021 (carved out of Ministry of Agriculture).
- Constitutional basis: Article 43B (DPSP) and Part IXB (Articles 243-ZH to 243-ZT).
- 97th Constitutional Amendment Act, 2011: inserted Article 43B and Part IXB.
- Supreme Court (2021): Part IXB of the 97th Amendment applicable only to multi-state cooperatives and UT cooperatives — not to state-level societies (which are governed by state legislatures).
- Multi-State Cooperative Societies Act, 2002: governs cooperatives operating across state boundaries.
The Ministry of Cooperation's five-year anniversary represents the operational rollout of the policy intent embedded in Article 43B — using cooperatives, especially PACS, as the vehicle for rural storage, credit, and now digital banking infrastructure.
Primary Agricultural Credit Societies (PACS) and Grain Storage
PACS are the foundational tier of the three-tier cooperative credit structure in India (PACS → District Central Cooperative Banks → State Cooperative Banks). There are approximately 1 lakh PACS across the country, each serving a cluster of villages. PACS have historically served as the rural credit delivery point for short-term agricultural loans, subsidised inputs, and procurement support. The World's Largest Grain Storage Plan — announced in 2023 — proposes to construct decentralised grain storage godowns at the PACS level, addressing India's perennial problem of post-harvest losses estimated at 4–6% of food grain production, and reducing dependence on the Food Corporation of India's (FCI) centralised warehousing. The scheme is implemented jointly by the Ministry of Cooperation, the Ministry of Food and Consumer Affairs, and the Ministry of Agriculture.
Key Details
- Three-tier cooperative credit structure: PACS (village) → DCCBs (district) → SCBs (state).
- Total PACS in India: approximately 1 lakh.
- World's Largest Grain Storage Plan: decentralised godowns at PACS level.
- Target: 700 lakh tonne storage capacity in five years; investment of ₹1.25 lakh crore.
- Post-harvest losses in India: estimated 4–6% of food grain output.
- 100% storage sufficiency target: before 2027.
- 50,000 PACS being converted to e-PACS.
The 47 godown foundation stones laid at the 5th Foundation Day are part of the rolling pipeline under the Grain Storage Plan — each godown provides the PACS with its own storage, reducing distress selling and dependence on FCI's overloaded infrastructure.
Urban Cooperative Banks (UCBs) and Regulatory Framework
Urban Cooperative Banks are cooperative financial institutions serving urban and semi-urban populations, regulated by a dual authority: the Reserve Bank of India (RBI) regulates their banking operations under the Banking Regulation Act, 1949 (as amended in 2020 to bring UCBs fully under RBI oversight), while state governments (or CRCS for multi-state UCBs) regulate their cooperative aspects under state cooperative society acts. As of 2024, India has approximately 1,500 UCBs. The sector has faced periodic governance failures (the PMC Bank crisis of 2019 being the most prominent), leading to the Banking Regulation (Amendment) Act, 2020 which expanded RBI's supervisory powers over UCBs. Sahakar CBS provides a standardised core banking solution to smaller UCBs that could not afford individual CBS platforms — improving systemic resilience, regulatory compliance, and customer service.
Key Details
- UCBs regulated by: RBI (banking operations) + State Registrar of Cooperative Societies / CRCS (cooperative aspects).
- Banking Regulation (Amendment) Act, 2020: strengthened RBI's powers over UCBs after PMC Bank crisis.
- PMC Bank crisis (2019): exposed governance failures in UCBs; depositor funds frozen.
- Approximately 1,500 UCBs in India (as of recent data).
- Sahakar CBS: a centralised core banking platform provided to UCBs — standardises banking operations.
- Sahakar Sahyogi: conversational AI platform for UCBs — advisory and transactional services.
Both Sahakar CBS and Sahakar Sahyogi directly address the technology deficit in smaller UCBs, aiming to bring them on par with commercial banks in digital service delivery while strengthening RBI's ability to monitor UCB health in real time.
Food Security Architecture — FCI and Decentralised Storage
The Food Corporation of India (FCI), established under the Food Corporations Act, 1964, is the central institution for procurement, storage, and distribution of food grains to support the Public Distribution System (PDS) under the National Food Security Act, 2013 (NFSA). FCI's centralised storage model has long been criticised for high carrying costs, excess stockholding beyond buffer norms, and inadequate coverage in remote areas. The Shanta Kumar Committee Report (2015) recommended decentralising food grain management — including greater use of cooperative-level storage — to reduce FCI's fiscal burden, currently borne through the food subsidy budget. The Grain Storage Plan through PACS operationalises this decentralisation recommendation.
Key Details
- FCI: established under Food Corporations Act, 1964.
- NFSA, 2013: governs food entitlements; covers approximately 80 crore beneficiaries.
- Shanta Kumar Committee (2015): recommended decentralising FCI operations, reducing stockholding, and leveraging cooperative storage.
- Buffer stock norms: India maintains strategic reserves of food grain above consumption; FCI often holds far in excess of norms.
- Decentralised Procurement System: some states (e.g., Chhattisgarh, MP) already procure independently — PACS godowns extend this logic to the storage phase.
The cooperative grain storage plan is not merely an agricultural scheme — it is a structural reform in India's food security architecture, shifting the last-mile storage function from centralised FCI depots to PACS-level godowns embedded within farming communities.
- Ministry of Cooperation established: July 2021 (5th Foundation Day: July 6, 2026).
- 97th Constitutional Amendment (2011): inserted Article 43B (DPSP) and Part IXB (Articles 243-ZH to 243-ZT).
- Article 43B: State shall promote voluntary formation, autonomous functioning, democratic control, and professional management of cooperative societies.
- Grain Storage Plan target: 700 lakh tonne capacity; ₹1.25 lakh crore investment; 100% sufficiency before 2027.
- Godowns at 5th Foundation Day: 47 foundation stones + 85 inaugurated + 135 transferred.
- e-PACS target: 50,000 PACS to be digitally transformed.
- UCBs in India: approximately 1,500; regulated dually by RBI and state registrars.
- Banking Regulation (Amendment) Act, 2020: expanded RBI's supervisory powers over UCBs.
- FCI established: under Food Corporations Act, 1964.
- NFSA, 2013: National Food Security Act — legal basis of PDS entitlements.
- Shanta Kumar Committee (2015): recommended decentralisation of FCI operations and cooperative-level storage.
- Post-harvest food grain losses in India: estimated at 4–6% of production annually.