The Union Cabinet, led by Prime Minister Narendra Modi, has approved a central sector scheme providing a ₹2,000 crore grant-in-aid to the National Cooperative Development Corporation (NCDC).
Spread over four years—from 2025-26 to 2028-29—this grant will be allocated at ₹500 crore annually.
The decision aims to strengthen the financial base of the NCDC, enabling it to enhance its lending capacity to cooperatives across India.
Information and Broadcasting Minister Ashwini Vaishnaw explained that this capital grant will allow NCDC to mobilise an additional ₹20,000 crore from the open market over the four-year period.
The funds will significantly expand support for cooperative societies, boosting growth in key sectors such as dairy, livestock, fisheries, sugar, textile, food processing, and cold storage.
Supporting India’s Vast Cooperative Network
NCDC currently enjoys a stellar loan recovery rate of 99.8 per cent and maintains zero non-performing assets (NPA), reflecting its robust financial management.
With the Cabinet’s approval, the organisation can now increase its lending and provide much-needed working capital to cooperative members.
India boasts over 8.25 lakh cooperatives, collectively representing more than 29 crore members.
Remarkably, around 94 per cent of farmers actively engage with cooperatives in some capacity, highlighting the sector’s pivotal role in the country’s rural economy.
The grant will enable NCDC to fund new projects, support plant expansions, and provide working capital loans to cooperatives.
This will result in the creation of income-generating assets and improve liquidity for cooperatives, fostering economic growth at the grassroots level.
Moreover, the government has designated the NCDC as the executing agency for the scheme, entrusting it with disbursing loans, monitoring project implementation, and ensuring the recovery of loans.
According to official statements, the provision of funds will facilitate the creation of capital assets within cooperatives, thereby generating sustainable income streams.
The move is expected to benefit approximately 2.9 crore members across 13,288 cooperative societies in various industries.
By empowering cooperatives financially, the government aims to reinforce this sector’s contribution to the national economy and improve livelihoods in rural and semi-urban areas.
This grant marks a significant step in reinforcing India’s cooperative movement and aligns with broader efforts to promote inclusive economic development.
The enhanced financial support will also equip cooperatives with the necessary resources to expand operations, innovate, and better serve their members.
With this initiative, the government under Prime Minister Modi continues to emphasise strengthening cooperative institutions as vital engines of growth, employment, and rural prosperity.
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