Cabinet approves ₹2,000-cr grant to NCDC for cooperative sector expansion

The ₹2,000 crore grant, disbursed at ₹500 crore per year from FY26 to FY29, will be funded through budgetary support from the central government

The Union Cabinet has approved financial support worth ₹2,000 crore for the National Cooperative Development Corporation for the period from the financial year 2025–26 (FY26) to FY29.

 

The ₹2,000-crore grant will enable the NCDC to leverage up to ₹20,000 crore from the open market over the four years. These funds will be extended as loans to cooperative societies for establishing new projects, expanding existing facilities, and meeting working capital needs.

 

The grant allocated to the NCDC will be provided through budgetary support from the central government. Based on this grant-in-aid, the NCDC is expected to leverage ₹20,000 crore from the open market over the next 4 years.

 

 

Implementation strategy

 

The NCDC will act as the implementing agency for the scheme, overseeing the disbursement of funds, follow-up, monitoring of project implementation, and recovery of loans issued from the fund. Approximately 29 million members of 13,288 cooperative societies across various sectors, including dairy, livestock, fisheries, sugar, textiles, and women-led cooperatives, are expected to benefit from the scheme.

 

The NCDC will extend loans to cooperatives either via the respective state governments or directly. Cooperatives that fulfil the eligibility criteria outlined in the NCDC’s direct funding guidelines will be considered for financial support, secured either against admissible collateral or with a state government guarantee.

 

The NCDC will offer long-term credit to cooperatives for the expansion of project facilities across various sectors, in addition to providing working capital to support their operations.

 

Potential impact

 

The financial support extended to these cooperatives is expected to facilitate the creation of income-generating capital assets and offer much-needed liquidity in the form of working capital.  India has more than 825,000 cooperatives with more than 29 million members, and 94 per cent of farmers are associated with cooperatives in some form or another.