Indian Budget 2026-27 Introduces Key Reforms for Dairy and Cooperative Sectors

The Union Budget 2026-27 has introduced a series of measures designed to bolster India's dairy and cooperative sectors. These initiatives are aligned with the government's vision of 'Sahakar se Samriddhi,' which aims at inclusive development through cooperatives.

Among the key highlights is the extension of income-tax deductions to include cattle feed and cotton seed produced by cooperative members. This reform is expected to benefit the dairy cooperative sector significantly, especially in Gujarat, where approximately 10,000 metric tonnes of cattle feed are produced daily. The reform will also simplify accounting and tax compliance for around 18,600 Village Cooperative Societies in Gujarat.

Another significant measure is the allowance of inter-cooperative society dividend income as a deductible expense, addressing the issue of double taxation. This change is anticipated to provide financial relief of around ₹80–100 crore annually to Gujarat's dairy cooperatives, enabling higher payments to farmers and infrastructure investments.

Infrastructure improvements include a new Dedicated Freight Corridor connecting Surat to Dankuni, aimed at enhancing milk logistics by ensuring faster and more efficient transport of liquid milk. Additionally, tax incentives for biogas-blended CNG and renewable energy equipment have been announced, promoting sustainability in the dairy sector.

The budget also allocates ₹300 crore for cooperative education and capacity building and ₹450 crore to strengthen the export capabilities of cooperative institutions. This includes support for veterinary education and infrastructure, targeting an increase of over 20,000 veterinary professionals across the country.

These comprehensive measures underscore the budget's emphasis on modernizing and scaling dairy and livestock enterprises, as well as promoting integrated dairy value chains and Livestock Farmer Producer Organisations (FPOs).