AHMEDABAD: Gujarat continues to hold its position among India's strongest cooperative states, but fresh data placed before the Rajya Sabha reveals that the state's celebrated cooperative movement is facing an internal crisis.
While Gujarat has one of the country's largest cooperative networks, thousands of societies have either stopped functioning or slipped into financial distress, raising questions over long-term sustainability.
According to the Ministry of Cooperation, Gujarat has 88,119 registered cooperative societies, making it the second-largest cooperative ecosystem in India after Maharashtra's 2.27 lakh societies. Gujarat alone accounts for over 10% of all cooperative societies in the country, underlining its strategic importance in India's cooperative economy.
However, the headline figures conceal significant structural weaknesses.
Out of Gujarat's 88,119 registered societies, 79,823 are functional, while 6,959 have become non-functional and another 1,341 are under liquidation. In other words, 8,300 cooperative societies in Gujarat are effectively inactive or on the verge of closure, representing nearly one in every ten registered societies in the state.
The financial health of functioning societies paints another mixed picture.
Among the 79,823 operational cooperatives, 56,977 are profit-making, indicating that nearly 71% of active societies remain financially viable. However, 18,404 societies are operating at a loss, accounting for almost 23% of all functional cooperatives. Financial information is unavailable for another 4,442 societies, making it difficult to assess the true financial health of the sector.
The data suggests that while Gujarat has succeeded in expanding its cooperative network, financial sustainability remains uneven across the sector.
The national picture mirrors similar concerns.
Across India, there are 8.53 lakh cooperative societies, of which 6.63 lakh are functional, 1.41 lakh are non-functional, and 49,177 are under liquidation. Among functioning societies, 3.56 lakh are profit-making, 2.50 lakh are loss-making, while financial data is unavailable for 56,689 societies.
Although Gujarat performs better than several states in terms of the proportion of operational societies, the existence of thousands of dormant cooperatives indicates persistent governance, management and financial challenges.
The Ministry of Cooperation acknowledged these concerns and said it has initiated reforms by converting Primary Agricultural Credit Societies (PACS), dairy and fisheries cooperatives into multipurpose cooperative societies to diversify business activities and improve financial stability. The government has also created a Cooperative Rehabilitation, Reconstruction and Development Fund for reviving financially weak multi-state cooperative societies and strengthening infrastructure.
For Gujarat, where cooperatives have historically shaped agriculture, dairy, banking, housing and rural development, the latest data presents a dual narrative. The state remains one of India's largest cooperative success stories in terms of scale, but the numbers also reveal that expansion alone is not enough.
Unless financially weak and non-functional societies are revived, Gujarat's cooperative model could face increasing pressure despite its dominant national presence.