The Ministry of Cooperation has introduced a "Central Sector Scheme-Grant-in-aid to NCDC for strengthening of Cooperative Sugar Mills" to address the financial challenges faced by these mills. An evaluation of the scheme found that 102 out of 312 cooperative sugar mills are non-functional, and the Ministry is collaborating with States to revive viable mills. Under this scheme, a grant of ₹1000 Cr. was provided to NCDC by the Central Government, allowing NCDC to provide loans of ₹10,000 Cr. to Cooperative Sugar Mills (CSMs). NCDC has disbursed ₹10,005 Cr. to CSMs, including ₹251.40 Cr. for ethanol plants, ₹97.12 Cr. for Cogen power, and ₹9656.90 Cr. for working capital. 56 Cooperative Sugar Mills have benefited. A third-party evaluation showed that NCDC assistance offers lower interest rates, improved transparency, documentation, and access to finance, leading to reduced Cane bills and timely payments to farmers and workers. The scheme does not include an interest subvention component. NCDC has robust recovery guidelines monitored by its Board of Management. This information was provided by Union Minister Shri Amit Shah.
Key Entities Referenced
Central Sector Scheme-Grant-in-aid to NCDC for strengthening of Cooperative Sugar Mills: Scheme to alleviate the operational & financial distress of Cooperative Sugar Mills.
NCDC (National Cooperative Development Corporation): Nodal implementation agency for the scheme.
Ministry of Cooperation: Ministry responsible for the scheme.
Cooperative Sugar Mills: Mills that are the beneficiaries of the scheme.
Ministry of Cooperation
Cooperative Sugar Mills
Posted On: 03 FEB 2026 6:44PM by PIB Delhi
a. The Ministry, to alleviate the operational & financial distress of Cooperative Sugar Mills, unveiled a
scheme titled “Central Sector Scheme-Grant-in-aid to NCDC for strengthening of Cooperative
Sugar Mills”. The Ministry while conducting third party evaluation of the scheme, found out 102 of
the 312 cooperative sugar mills to be non-functional. The Ministry in consultation with States
concerned is working for revival of viable non-functional mills.
(b) Under Central Sector Scheme “Grant-in-Aid to NCDC for strengthening of CSMs” grant of ₹1000 Cr.
was provided by Central Government to NCDC to enable it to provide loans of ₹10,000 Cr. to CSMs by
leveraging the grant-in-aid. NCDC in turn has disbursed ₹10,005 Cr. to CSMs under the scheme.
The amount disbursed for ethanol plants is ₹251.40 Cr.
The amount disbursed for Cogen power is ₹97.12 Cr. &
The amount disbursed for working capital is ₹9656.90 Cr.
Totally 56 Cooperative Sugar mills have benefitted under the scheme.
(c) The Ministry got a 3rd party evaluation conducted for the impact of the scheme. It was found that the
NCDC assistance offered relatively lesser rate of interest than counterparts and set a benchmark for other
banks and financial institutions in terms of transparency, documentation and easy access enabling CSM
easy access to finance. As a result, outstanding Cane bills reduced significantly indicating smooth business
operations and timely payout to farmers & workers.
(d) The scheme did not have any interest subvention component. NCDC, as the nodal implementation
agency for the scheme has robust guidelines for recovery monitored by its Board of Management.
This information was given by Union Minister for Home and Cooperation Shri Amit Shah in a written
reply in Lok Sabha.
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AK/AP
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