Union Budget 2025-26: Key Impacts on the Cooperative Sector and Rural Economy

Discover how the Union Budget 2025-26 impacts India's cooperative sector. Key initiatives include agricultural reforms, rural development programs, enhanced credit access, and MSME support to drive inclusive growth and economic resilience.

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Article by Dr Raj V Siddiqui, Chairman, Uday Khanij Mining Cooperative Society Ltd

The Union Budget 2025-26, presented by Finance Minister Nirmala Sitharaman, introduces several initiatives poised to significantly impact India's cooperative sector. These measures aim to enhance agricultural productivity, support rural development, and empower marginalized communities, aligning with the government's vision of inclusive growth.

1. Prime Minister Dhan-Dhaanya Krishi Yojana

This program targets 100 districts with low agricultural productivity. In collaboration with state governments, it focuses on:

  • Enhancing agricultural productivity.

  • Promoting crop diversification and sustainable practices.

  • Improving post-harvest storage at the panchayat and block levels.

  • Upgrading irrigation facilities.

  • Facilitating access to both long-term and short-term credit.

These initiatives are expected to benefit approximately 1.7 crore farmers, many of whom are members of agricultural cooperatives. By strengthening cooperative societies at the grassroots level, the program aims to foster collective growth and resilience in the agricultural sector.

pib.gov.in

2. Rural Prosperity and Resilience Program

This comprehensive, multi-sectoral initiative seeks to address underemployment in agriculture through:

  • Skilling programs.

  • Investment in rural enterprises.

  • Technological integration.

  • Revitalizing the rural economy.

The program emphasizes generating ample opportunities in rural areas, ensuring that migration becomes an option rather than a necessity. It particularly focuses on:

  • Rural women.

  • Young farmers.

  • Rural youth.

  • Marginal and small farmers.

  • Landless families.

By empowering these groups, the program aims to strengthen cooperative movements, promote self-reliance, and enhance economic resilience in rural communities.

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3. Mission for Aatmanirbharta in Pulses

To achieve self-sufficiency in pulses, the government is launching a six-year mission focusing on Tur, Urad, and Masoor. Central agencies like NAFED and NCCF will be prepared to procure these pulses from farmers over the next four years. This initiative is expected to:

  • Stabilize pulse production.

  • Ensure fair pricing for farmers.

  • Reduce dependence on imports.

Cooperative societies will play a crucial role in aggregating produce, facilitating procurement, and ensuring that benefits reach the grassroots level.

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4. Enhanced Credit Access through Kisan Credit Cards

The budget proposes increasing the loan limits for Kisan Credit Cards from ₹3 lakh to ₹5 lakh under a modified interest subvention scheme. This move aims to provide farmers, especially those in cooperative societies, with greater financial flexibility to invest in:

  • Modern farming techniques.

  • Purchase of quality inputs.

  • Adoption of sustainable practices.

Enhanced credit access is anticipated to boost agricultural productivity and income levels among cooperative members.

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5. Support for MSMEs and Cooperative Entrepreneurs

Recognizing the vital role of Micro, Small, and Medium Enterprises (MSMEs) in the economy, the budget outlines measures to:

  • Enhance credit availability with guarantee cover.

  • Launch a new scheme for five lakh women, Scheduled Castes, and Scheduled Tribes first-time entrepreneurs, providing term loans up to ₹2 crore over the next five years.

These initiatives are expected to encourage the formation of new cooperative enterprises, promote entrepreneurship among marginalized communities, and contribute to balanced economic development.

pib.gov.in

In summary, the Union Budget 2025-26 introduces targeted measures to strengthen the cooperative sector, enhance agricultural productivity, and promote inclusive growth. By empowering cooperatives and their members, the government aims to build a resilient rural economy and achieve its vision of a Viksit Bharat.

About the Author:

Dr. Raj V. Siddiqui is a seasoned industrialist, educationist and philanthropist with a diverse background in medicine, education and social welfare. He serves as the Chairman of Uday Khanij Mining Cooperative Society Ltd. and is the National President of Manavseva Lokkalyan Mahasangh.
 

Union Budget cooperatives Budget 2025