Union Cabinet Approves Rs. 2000 Crore Grant to NCDC
The Union Cabinet chaired by Prime Minister Narendra Modi has approved a Central Sector Scheme to provide Rs. 2000 crore as grant-in-aid to the National Cooperative Development Corporation (NCDC). This scheme will run from 2025-26 to 2028-29 with Rs. 500 crore allocated each year. The grant will enable NCDC to raise Rs. 20,000 crore from the open market, which will be used to extend loans to cooperatives across India.
Financial Structure
The Rs. 2000 crore grant will come from the Government of India’s budgetary support. It will empower NCDC to mobilise Rs. 20,000 crore over four years. These funds will be lent to cooperatives for new projects, expansion, modernisation, and working capital needs. This financial leverage aims to strengthen cooperative societies and improve their operational capacities.
Scope and Beneficiaries
The scheme targets about 2.9 crore members belonging to 13,288 cooperative societies spanning sectors such as dairy, livestock, fisheries, sugar, textile, food processing, storage, cold storage, labour, and women-led cooperatives. The wide coverage ensures support to diverse rural and semi-urban economic activities, encouraging inclusive growth.
Implementation Strategy
NCDC will execute the scheme, overseeing disbursement, monitoring, and loan recovery. Loans may be given directly to cooperatives or via state governments, based on NCDC guidelines. Eligible cooperatives meeting direct funding criteria will receive loans against admissible securities or state guarantees. The funding will support setting up new projects, technology upgrades, modernisation, expansion, and working capital.
Economic and Social Impact
The funding is expected to create income-generating assets and provide liquidity for cooperatives. It will boost capacity building, profitability, and productivity. Employment opportunities will rise across skill levels due to infrastructure development and project expansion. Cooperatives’ democratic principles will help reduce socio-economic disparities and increase women’s participation in the workforce, promoting social inclusion.
Background of Cooperative Sector in India
India’s cooperative sector is a vital pillar of rural economy and development. It comprises over 8.25 lakh cooperative societies with more than 29 crore members. Approximately 94% of farmers are linked to cooperatives. The sector spans credit, banking, fertiliser, sugar, dairy, marketing, handloom, handicrafts, fisheries, and housing. Supporting weaker sectors like dairy, poultry, fisheries, textile, and women-led cooperatives is crucial for balanced rural growth and employment generation.
About National Cooperative Development Corporation (NCDC)
Overview
- Statutory body established under the NCDC Act, 1962; began operations in 1963.
- Functions under the Ministry of Agriculture and Farmers’ Welfare.
- Serves as the apex financing organization for cooperative development in India.
- Headquarters: New Delhi.
- Headed by a Managing Director.
- Functions through a General Council and a Board.
- Operates 18 State/Regional Directorates across India.
Objectives
- Promote economic development through cooperatives.
- Plan and support:
- Production, processing, marketing, storage, export, and import of agricultural produce and livestock.
- Strengthen post-harvest infrastructure.
- Empower farmers’ cooperatives and promote self-sufficiency.
- Encourage non-farm income-generating activities for SC/ST, women, and weaker sections (e.g. dairy, poultry, handlooms, sericulture, fisheries).
Key Initiatives
- Sahakar-22
- Mission to double farmers’ income by 2022 through cooperatives.
- Identifies viable sectors (farm & non-farm) for development at the district level.
- Yuva Sahakar
- Supports startups in the cooperative sector.
- Offers financial assistance to new and innovative cooperative societies led by youth.
Functions & Activities
- Supports cooperative-based programs involving agricultural produce, fertilizers, insecticides, textiles, soap, rubber, agricultural machinery, etc.
- Promotes collection, storage, marketing, and export of minor forest produce.
- Encourages dairy, poultry, sericulture, handloom, and fishery cooperatives.
- Funds rural infrastructure projects (e.g. water conservation, irrigation, insurance, sanitation, animal health).
- Provides:
- Direct financial assistance to cooperatives.
- Loans and grants to state governments for cooperative societies at primary and secondary levels.
Scope and Outreach
- Focus on income enhancement and livelihood improvement for:
- Farmers, tribals, women, SC/STs, weavers, artisans.
- Supports women-only cooperatives.
- Promotes area-based projects like:
- Integrated Cooperative Development Project (ICDP) – aimed at district-level development through cooperatives.
National Cooperative Development Fund
- Fund maintained by NCDC is used for:
- Loans and subsidies to State Governments for supporting cooperative societies.
- Subscription to share capital of cooperatives by State Governments.
- Administrative expenses, salaries, and allowances of NCDC staff.
- Implementation of the provisions under the NCDC Act.
- Strong emphasis on inclusive development via cooperatives
| Related | |
|---|---|
