**Policy Summary: Central Sector Scheme Grant-in-Aid to National Cooperative Development Corporation (NCDC)**
On July 31, 2025, the Union Cabinet, chaired by the Prime Minister, approved a Central Sector Scheme providing grant-in-aid to the National Cooperative Development Corporation (NCDC) with a total outlay of Rs. 2000 crore. The scheme will be implemented over four fiscal years, from 2025-26 to 2028-29, with Rs. 500 crore allocated annually.
The Rs. 2000 crore grant-in-aid will enable NCDC to raise Rs. 20,000 crore from the open market during the same four-year period. These funds will be utilized by NCDC to provide loans to cooperatives for various purposes, including establishing new projects, expanding existing plants, and meeting working capital requirements.
The scheme anticipates benefiting approximately 2.9 crore members across 13,288 cooperative societies involved in sectors such as Dairy, Livestock, Fisheries, Sugar, Textile, Food Processing, Storage and Cold Storage, Labour, and Women-led initiatives throughout the country.
NCDC will serve as the executing agency, responsible for disbursement, follow-up, monitoring project implementation, and loan recovery. Loans will be provided to cooperatives either directly or through state governments, adhering to NCDC guidelines. Cooperatives meeting the criteria for direct funding will be considered for financial assistance against admissible security or state government guarantees. NCDC will offer long-term credit for modernization, technology upgrades, expansion projects, and working capital to support efficient and profitable business operations.
The expected impact of the scheme includes the creation of income-generating capital assets, improved liquidity for cooperatives through working capital, bridging socioeconomic gaps, increased participation of women in the workforce, capacity augmentation, diversification of activities, increased profitability for cooperatives, employment generation, and improved economic conditions for farmer members.
The cooperative sector plays a crucial role in the Indian economy, contributing to socioeconomic upliftment, infrastructure development, and job creation, especially in rural areas. With over 8.25 lakh cooperatives encompassing more than 29 crore members, and 94 percent of farmers associated with cooperatives, supporting weaker sectors through long-term and working capital loans is essential.
Key Entities Referenced
National Cooperative Development Corporation (NCDC): A Central Government organization that provides financial assistance to cooperatives.
Central Sector Scheme Grant: A financial aid program approved by the Union Cabinet.
Shri Narendra Modi: The Prime Minister of India.
Dairy: A sector of Cooperative societies.
Livestock: A sector of Cooperative societies.
Fisheries: A sector of Cooperative societies.
Sugar: A sector of Cooperative societies.
Textile: A sector of Cooperative societies.
Cabinet
Cabinet approves Central Sector Scheme “Grant in
aid to National Cooperative Development
Corporation (NCDC)” with an outlay of Rs.2000 crore
Posted On: 31 JUL 2025 3:00PM by PIB Delhi
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi today has approved the Central Sector
Scheme “Grant in aid to National Cooperative Development Corporation (NCDC)” with an outlay of Rs.2000
crore for a period of four years from 2025-26 to 2028- 29 (Rs.500 crore each year from FY 2025-26).
On the basis of grant in aid of Rs.2000 crore to NCDC from FY 2025-26 to FY 2028-29, NCDC will be able
to raise Rs.20,000 crore from open market over a span of four years. These funds will be utilized by NCDC
for granting loans to Cooperatives for setting up new projects / expansion of plants and loan for meeting the
working capital requirements.
Financial implications:
The source of finance of Rs.2000 crore (Rs.500 crore each year from FY 2025-26 to FY 2028-29) grant to
NCDC shall be through budgetary support from Government of India. On the basis of grant in aid of Rs.2000
crore to NCDC from FY 2025-26 to FY 2028-29, NCDC will be able to raise Rs.20,000 crore from open
market over a span of four years.
Benefits:
Approximately 2.9 crore members of 13,288 Cooperative societies of various sectors like Dairy, Livestock,
Fisheries, Sugar, Textile, Food Processing, Storage and Cold Storage; Labour and Women led cooperatives.
across the country are likely to get benefitted.
Implementation strategy and targets:
(i) NCDC will be the executing agency for this scheme for the purpose of disbursement, follow
up, monitoring of implementation of project, and recovery of loan disbursed out of the fund.
(ii) NCDC will provide loans to cooperatives either through state government or directly, as per
NCDC guidelines. Cooperatives, which are meeting the criteria of direct funding guidelines of
NCDC would be considered for financial assistance directly against admissible security or state
government guarantee.
(iii) NCDC will provide loans to cooperatives, long term credit for setting up/ modernization/
technology upgradation/ expansion of project facilities for various sectors and working capital to
run their businesses efficiently and profitably.
Impact, including employment generation potential:
i. Funds provided to these cooperatives will lead to creation of income generating capital
assets and provide cooperatives with much needed liquidity in the form of working capital.
ii. In addition to economic benefits, cooperatives through their principles of democracy,
equality and community concerns are an essential tool to bridge the socio-economic gap and
increase participation of women in the workforce.
iii. The availability of loans will help cooperatives in their capacity augmentation,
modernization, diversification of activities, increasing their profitability and enable them toincrease their productivity and generate more employment improving the economic conditions of
the farmer members.
iv. Additionally, term loans for the infrastructure development also create widespread
employment opportunities across different skill levels.
Background:
The cooperative sector is contributing immensely to the Indian economy. Cooperatives play a vital role in
socio-economic upliftment, infrastructure development, and job creation in the rural sector. Cooperative
Sector contributes substantially across all the sectors of their respective production in the country. The
cooperatives in India cover a wide array of activities, including credit and banking, fertilizer, sugar, dairy,
marketing, consumer goods, handloom, handicraft, fisheries, housing, etc. India has more than 8.25 lakh
cooperatives with more than 29 crore members and 94 percent farmers are associated with cooperatives in
some form or the other.
Due to their important socio-economic contribution to the rural economy, it is essential to support the weaker
sectors like dairy, poultry & livestock, fisheries, sugar, textile, processing, storage & cold storage, labour
cooperatives and women cooperatives etc. by granting them long term and working capital loans.
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MJPS/BM
(Release ID: 2150641)