Cooperatives: A quiet revolution for a more equal India

In the aftermath of the 1991 economic crisis, India made a significant pivot from a state-controlled economy towards a more liberalized, market-driven model.

- Dr. Rakesh Arrawatia & Sumit Sharma

This shift was critical for unlocking economic growth, attracting foreign investment, and integrating India into the global economy. Structural reforms such as deregulation, privatization, and the reduction of trade barriers helped stimulate industrial expansion and service-sector growth, leading to higher GDP and improved global competitiveness.

However, while this transition catalyzed overall economic development, it also led to income inequality and socio-economic disparity. According to Oxfam's Survival of the Richest: The India Story, report 2023, the richest 10% of Indians controlled 77% of the country's total wealth. The benefits of liberalization have favored corporate giants, financial institutions, and urban elites, particularly in metropolitan areas. In contrast, rural populations—especially those dependent on agriculture and informal livelihoods—have often found themselves excluded from the rapid gains of economic reform.

COOPERATIVES AS INCLUSIVE INSTITUTIONS In this context, cooperatives emerge as a compelling alternative, not only as economic institutions but as vehicles for inclusive and democratic wealth creation. When economists Daron Acemoglu and James Robinson argued in their book Why Nations Fail that inclusive economic institutions are essential for long-term prosperity because they distribute power and wealth more broadly—they may not have realized that India has long nurtured such institutions through its cooperative movement. A telling comparison illustrates this point vividly: when a conglomerate like Reliance Industries reaches a market valuation of Rs 12 lakh crore, the financial rewards are concentrated among a few shareholders. On the other hand, when Amul, a dairy cooperative, records an annual turnover of Rs 90,000 crore, the economic benefits are distributed among millions of farmers who are its true owners. This is not just redistribution—it is transformation.