Centre to push for NCDC power expansion through cooperative law amendment

The proposed NCDC law amendment seeks to widen financing channels for the cooperative sector and reduce procedural delays in accessing loans, grants and other financial assistance

The central government is likely to introduce a Bill to amend the law governing the National Co-operative Development Corporation (NCDC). This would give the body greater flexibility and legal clarity to provide loans and grants directly to cooperative societies or any entity engaged in cooperative development. It would also allow the NCDC to participate in the share capital of any cooperative with the explicit approval of the Centre.

 

Sources said one of the main reasons for introducing the National Co-operative Development Corporation (Amendment) Bill, 2026, was that the cooperative sector had expanded and diversified considerably in recent years, particularly after a separate Ministry of Cooperation was established under Amit Shah. Funding proposals were often held up by procedural delays, leading to limited offtake, they said.

 

Also, with the expanding role of cooperatives, many statutory bodies, state government agencies and other specialised entities are increasingly engaged in providing infrastructure, technology, processing, marketing, financial and other services for the development of cooperatives.

 

However, since such entities may not be registered as cooperative societies, the Corporation is currently unable to finance them directly, even when their activities are intended to benefit the cooperative sector.

 

Consequently, such proposals must be routed through state governments or cooperative societies, resulting in procedural delays and limited uptake.

 

The draft Bill also seeks to remove the geographical restriction applicable to industrial goods, enabling assistance for such activities irrespective of their location; update certain statutory references and omit obsolete provisions relating to institutions and frameworks that no longer exist; confer upon the NCDC such incidental powers as may be necessary for the effective discharge of its functions; and enable the Corporation to collect and furnish credit or other information to specified authorities and financial institutions, including the Reserve Bank of India, for the efficient discharge of its functions.

 

The Bill also proposes expanding the definition of “foodstuffs” to include additional food items notified by the government and removing geographical restrictions on assistance for industrial goods.

 

At present, the NCDC Act primarily envisages financial assistance for programmes implemented through cooperative societies, either directly to eligible cooperatives or through state governments. The proposed legislation seeks to move beyond this framework by allowing the NCDC to finance any entity engaged in cooperative development, provided the funds benefit cooperatives.

 

The NCDC Act was amended in 1973, 1974 and 2002 to diversify the Corporation’s sources of funds, expand the scope of its activities, enable direct financing of eligible cooperative societies and include notified services within its mandate.

 

Sources said the amendments would ensure that cooperatives remained the primary beneficiaries, while widening the institutional channels through which financial assistance could reach the sector.