The Union Budget 2026-27, has unveiled a series of landmark measures aimed at strengthening India’s cooperative ecosystem, dairy sector, animal husbandry infrastructure and rural livelihoods.
The initiatives reinforce the government’s vision of “Sahakar se Samriddhi” and inclusive development. Welcoming the announcements, Managing Director of Gujarat Cooperative Milk Marketing Federation (GCMMF) Jayen Mehta said the Budget provides transformational support to the cooperative movement, dairy sector and the rural economy. GCMMF markets its products under Amul brand name.
A key highlight of the Budget is a set of major taxation reforms designed to improve the financial sustainability and operational efficiency of cooperative institutions.
The income-tax deduction currently available to primary cooperative societies supplying milk, oilseeds, fruits and vegetables has been extended to include cattle feed and cotton seed produced by their members.
This move is expected to significantly benefit the dairy cooperative sector in Gujarat, which collectively produces and markets nearly 10,000 metric tonnes of cattle feed daily with an annual business turnover of about ₹10,000 crore, said Mehta.
The reform will simplify accounting and tax compliance for 18,600 Village Cooperative Societies in Gujarat and offer similar relief to thousands of dairy cooperatives across the country.
The Budget has also allowed inter-cooperative society dividend income as a deductible expense under the new tax regime, addressing the long-standing issue of double taxation within the cooperative structure. This measure is expected to provide immediate financial relief of around ₹80–100 crore per year to dairy cooperatives in Gujarat alone, enabling higher farmer payments, infrastructure investment and improved member services.
In addition, a three-year exemption on dividend income received by notified national cooperative federations has been announced for investments made up to 31 January 2026, subject to onward distribution to member cooperatives.
To strengthen milk logistics, the Budget announced a new Dedicated Freight Corridor connecting Surat in the West to Dankuni in the East. The corridor is expected to enable faster, time-bound movement of liquid milk, reduce logistics costs, minimise transit losses and integrate regional milk sheds into the national milk grid, he said.
Similar to the existing Gujarat-Delhi corridor, this project will significantly enhance the transportation of perishable dairy products.
Supporting sustainability and the circular dairy economy, the Budget provides tax relief by excluding the entire value of biogas while calculating excise duty on biogas-blended CNG.
Duty exemptions for renewable energy and biogas equipment have also been announced, facilitating the transition to a five per cent bio-CNG blend by 2028–29. These measures are expected to promote dung-based bio-energy plants, generate additional income for milk producers and support clean energy adoption.
A ₹300 crore allocation has been made for cooperative education and capacity building, including the establishment of Tribhuvan Sahkari University in Anand, Gujarat. The funding will focus on professional management training, leadership development, digital and governance reforms and youth engagement in cooperatives.
The Budget has also provided ₹450 crore to the National Cooperative Exports Limited to strengthen export capabilities of cooperative institutions, including dairy cooperatives.
Further, recognising livestock as a major contributor to farm income, the Budget announced support for veterinary education and animal husbandry infrastructure, including loan-linked capital subsidies to establish veterinary colleges, hospitals and diagnostic laboratories, with a target of adding over 20,000 veterinary professionals nationwide.
The Budget has expanded support for dairy and livestock entrepreneurship, with a focus on modernising and scaling dairy and livestock enterprises. The Budget emphasises the development of integrated dairy value chains and the promotion of Livestock Farmer Producer Organisations (FPOs) to strengthen farmer participation and value realisation. It also proposes credit-linked subsidies to encourage rural entrepreneurship and generate employment in the livestock and dairy sectors., said Mehta.