Context:
The Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved the Central Sector Scheme "Grant-in-aid to National Cooperative Development Corporation (NCDC)". The scheme has an outlay of ₹2,000 crore for a four-year period from 2025–26 to 2028–29, with ₹500 crore allocated each year.
Structure of the scheme:
This grant will enable NCDC to raise ₹20,000 crore from the open market over four years.
· The mobilized funds will be used to offer long-term project loans and working capital to cooperatives engaged in various sectors such as dairy, fisheries, livestock, sugar, food processing, and textiles.
· The ₹2,000 crore grant will come from the Government of India’s budgetary support, making it a Central Sector Scheme, fully funded by the Union government.
Implementation Strategy: The NCDC will serve as the implementing agency, handling disbursement, monitoring, and recovery of loans. Funding will be routed either directly to eligible cooperatives or through state governments, depending on adherence to NCDC’s funding criteria and security norms.
Loans will be provided for:
- Setting up new cooperative projects
- Modernization and expansion of existing units
- Technology upgradation
- Meeting working capital needs
Key anticipated outcomes:
- Creation of income-generating assets in rural India
- Improved access to affordable credit for cooperatives
- Boost to employment generation, particularly in rural and semi-urban areas
- Enhanced participation of women and marginalized groups in the workforce
- Infrastructure development leading to multiplier effects on local economies
About National Cooperative Development Corporation (NCDC):
The National Cooperative Development Corporation (NCDC) is a statutory body established in 1963 under the Ministry of Agriculture and Farmers' Welfare.
· Its primary objective is to promote and develop cooperative societies across India.
· NCDC provides financial assistance, including loans and grants, to various cooperative sectors like farmers' cooperatives and dairy cooperatives.
· It also focuses on enhancing the socio-economic status of cooperative members.
Status and constitutional framework of Cooperatives in India:
The cooperative movement in India began with the Cooperative Credit Societies Act of 1904. Today, India is a global leader in this sector:
· India holds 27% of the world’s cooperatives.
· 20% of Indians are part of cooperative societies (compared to the global average of 12%).
Key Cooperative Sectors in India:
· Housing
· Dairy
· Primary Agricultural Credit Societies (PACS)
Leading States:
Maharashtra (25% of India’s cooperatives), Gujarat, Telangana, Madhya Pradesh, and Karnataka account for over 57% of all cooperatives in India.
Constitutional Status – 97th Amendment (2011):
· Article 19(1)(c): Recognized the right to form cooperatives as a Fundamental Right.
· Article 43B: Added under Directive Principles of State Policy, urging states to promote cooperative societies.
· Part IXB (Articles 243ZH to 243ZT): Introduced a dedicated framework for cooperative governance, covering elections, auditing, and professional management.
Jurisdiction:
· Multi-State Cooperatives: Governed by the Multi-State Cooperative Societies Act, 2002, under Entry 44 of the Union List.
· State Cooperatives: Regulated by State Cooperative Societies Acts, under Entry 32 of the State List.
Conclusion:
India’s cooperative ecosystem is vast, with over 8.25 lakh cooperative societies and 29 crore members, of whom 94% are farmers. Cooperatives are instrumental in rural development, offering services in credit, marketing, processing, housing, and more. The Cabinet’s decision reinforces the government's commitment to strengthening the cooperative sector as a pillar of inclusive economic growth.
