**Policy Summary: Central Sector Scheme Grant in Aid to National Cooperative Development Corporation (NCDC)**
**Overview:** The Union Cabinet has approved a Central Sector Scheme providing a grant in aid of Rs. 2000 crore to the National Cooperative Development Corporation (NCDC) over four fiscal years, from 2025-26 to 2028-29. The funding will be disbursed in installments of Rs. 500 crore per year.
**Financial Implications:** The Rs. 2000 crore grant in aid will be sourced through budgetary support from the Government of India. This grant will enable the NCDC to raise an additional Rs. 20,000 crore from the open market during the same four-year period.
**Purpose:** The funds raised by the NCDC will be utilized to provide loans to cooperative societies for various purposes, including:
* Setting up new projects
* Expanding existing plants
* Meeting working capital requirements
**Beneficiaries:** The scheme is expected to benefit approximately 2.9 crore members of 13,288 cooperative societies across various sectors, including:
* Dairy
* Livestock
* Fisheries
* Sugar
* Textile
* Food Processing
* Storage and Cold Storage
* Labor cooperatives
* Women-led cooperatives
**Implementation Strategy:** The NCDC will serve as the executing agency for the scheme, responsible for disbursement, follow-up, monitoring of project implementation, and loan recovery. Loans will be provided to cooperatives either through state governments or directly, based on NCDC guidelines. Cooperatives meeting the criteria for direct funding will be considered for financial assistance against admissible security or a state government guarantee. The NCDC will provide long-term credit for modernization, technology upgrades, and expansion, as well as working capital to support efficient business operations.
**Expected Impact:** The scheme is expected to have the following impacts:
* Creation of income-generating capital assets for cooperatives.
* Improved liquidity through working capital loans.
* Bridging of socio-economic gaps and increased participation of women in the workforce.
* Capacity augmentation, modernization, and diversification of cooperative activities.
* Increased profitability and productivity for cooperatives.
* Increased employment generation across various skill levels.
**Background:** The cooperative sector plays a crucial role in the Indian economy, contributing to socio-economic upliftment, infrastructure development, and job creation, especially in rural areas. With over 8.25 lakh cooperatives and 29 crore members, supporting weaker sectors through long-term and working capital loans is essential.
Key Entities Referenced
Ministry of Cooperation: The Indian governmental ministry responsible for cooperative societies in India.
Central Sector Scheme Grant: A grant-in-aid scheme approved by the Union Cabinet.
National Cooperative Development Corporation (NCDC): An organization that will receive the grant-in-aid and provide loans to cooperatives.
Shri Narendra Modi: The Prime Minister of India, who chaired the Union Cabinet meeting that approved the scheme.
Financial Year 2025-26: The starting financial year for the four-year scheme.
Financial Year 2028-29: The ending financial year for the four-year scheme.
Dairy, Livestock, Fisheries, Sugar, Textile, Food Processing, Storage and Cold Storage: Various sectors of Cooperative societies that are likely to get benefitted.
Delhi: Location where press release was posted.
Ministry of Cooperation
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 3:01PM 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: 2150642)