Government Grants Financial Support of INR 2,000 Crore to National Cooperative Development Corporation, Enhancing Support for 2.9 Crore Members
The Union Cabinet, chaired by Prime Minister Narendra Modi, has given its approval to a new Central Sector Scheme titled "Grant-in-Aid to National Cooperative Development Corporation (NCDC)" with a total outlay of ₹2,000 crore over four years. This scheme, set to commence in 2025-26, will allocate ₹500 crore each year through government budgetary support.
The scheme aims to provide long-term credit for modernization, technology upgrades, and capacity expansion, as well as short-term funds to help cooperatives run their businesses efficiently. By supporting diversification and infrastructure modernization, the scheme intends to boost the overall profitability and socio-economic impact of cooperatives.
NCDC, the designated executing agency, will be responsible for disbursing the funds, monitoring project implementation, conducting follow-ups, and ensuring loan recovery. The funds raised from the open market, amounting to an additional ₹20,000 crore, will be used to provide financial support to cooperative societies for setting up new projects, expanding existing operations, and meeting their working capital requirements.
The scheme is expected to benefit approximately 2.9 crore members from 13,288 cooperative societies engaged in sectors such as dairy, livestock, fisheries, sugar, textiles, food processing, storage, labor, and women-led enterprises. By strengthening the financial health of cooperatives, the scheme aims to create income-generating assets, improve liquidity, and enhance productivity.
India has a vast cooperative network of over 8.25 lakh societies, encompassing more than 29 crore members. Nearly 94% of Indian farmers are associated with cooperatives in some form, making this sector a vital contributor to rural development and significant areas such as agriculture, banking, dairy, handloom, housing, and others.
It's important to note that this scheme does not seem to be related to the PM-KISAN 20th Instalment announced in a separate news article. The first year of implementation for the "Grant-in-Aid to NCDC" scheme will be in 2025-26, with the scheme continuing until 2028-29.
This move is expected to generate employment across skill levels and promote greater participation of women in the workforce. By fostering growth in the cooperative sector, the scheme aspires to propel India towards a more prosperous and inclusive economy.
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The Grant-in-Aid to National Cooperative Development Corporation (NCDC) scheme, aiming to modernize and expand cooperative businesses, is anticipated to create a significant impact in the finance sector. By providing long-term credits for infrastructure modernization and short-term funds for efficient operations, the scheme aims to foster growth in the industry.
