The Union Cabinet, chaired by Prime Minister Narendra Modi, approved Central Sector Scheme ‘Grant-in-aid to National Cooperative Development Corporation (NCDC)’ for four years, from 2025-26 to 2028-29 (Rs 500 crore each year).

The decision is likely to benefit around 2.9 crore members of 13,288 co-operative societies of various sectors like dairy, livestock, fisheries, sugar, textile, food processing, storage and cold storage.

National Cooperative Development Corporation

• National Cooperative Development Corporation (NCDC), a statutory corporation in 1963 under an Act of Parliament (NCDC Act of 1962) for economic development through cooperative societies. 

• NCDC is a non-equity based promotional organisation created exclusively for planning, promoting and financing of programmes for production, processing, marketing, storage, export and import of agricultural produce, foodstuff and certain notified commodities, on cooperative principles. 

• The NCDC Act underwent change in 1974 to include more business activities like fishery, poultry, dairy, handloom & sericulture and by the amendment, NCDC’s resource base was broadened, thus enabling raising funds from the market. 

• The Act was again amended in 2002 to cover some more areas such as livestock, industrial goods, cottage and village industries, handicrafts, rural crafts and certain notified services like water conservation works, irrigation, animal healthcare, disease prevention, agriculture insurance and agriculture credit, rural sanitation and services pertaining to labour cooperatives. 

• Along with the above, the amendment also enables NCDC to finance cooperative societies directly under its various schemes, on fulfilment of certain stipulated conditions.

• NCDC is able to finance projects in the rural industrial cooperative sectors and for certain notified services in rural areas like water conservation, irrigation and micro irrigation, agri-insurance, agro-credit, rural sanitation, animal health, etc.

• The schemes implemented and activities assisted by NCDC are designed to enhance income and improve livelihood of farmers and economically weaker sections of the society like artisans, weavers, poor rural population including tribals.

• Cooperatives organised exclusively by women are assisted under the scheme introduced for the purpose.

• Apart from activity-based assistance, NCDC also promotes area based projects like Integrated Cooperative Development Project (ICDP) in selected districts. 

• ICDP is a project, which works for the overall development of the people of a district by unleashing the potential of the district through development of various cooperative activities. 

• The management of NCDC is vested in a General Council consisting of 51 members and a board of management consisting of 12 members, who are nominated by the central government. 

• The General Council lays down policy guidelines and the board oversees the general management of NCDC.

• Besides its head office in New Delhi, NCDC functions through 18 regional/state directorates.

• NCDC is one of the implementing agencies promoting the government’s scheme of Formation and Promotion of 10,000 Farmers Producer Organisations (FPOs), which provide for registration and support of new cooperatives as FPOs. 

• It is also an implementing agency for the Formation and Promotion of Fish Farmers Producer Organisations (FFPOs) under the Pradhan Mantri Matsya Sampada Yojana.

Benefits of the grant-in-aid

• The move that will help the organisation mobilise more funds for lending to cooperatives.

• It would assist cooperative institutions in starting new projects and expansion.

• On the basis of a grant in aid of Rs 2,000 crore, NCDC will be able to raise Rs 20,000 crore from the open market over four years.

• NCDC will use these funds to grant loans to cooperatives for setting up new projects or expansion of plants, and working capital requirements.

• NCDC will be the executing agency for this scheme. It will disburse loans, monitor the implementation of the project, and also recover loans disbursed from the fund.

• Funds provided to these cooperatives will lead to the creation of income-generating capital assets and provide cooperatives with much-needed liquidity in the form of working capital.

• At present, India has more than 8.44 lakh cooperative societies spanning 30 sectors, including credit, housing, marketing, dairy, fisheries, and more — functioning as essential instruments for rural credit, self-employment, and collective economic strength.

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