Cooperative capital boost: Cabinet okays Rs 2,000cr aid to NCDC; cooperatives to gain Rs 20,000cr from market raise
The Union Cabinet on Wednesday approved a Central Sector Scheme for providing Rs 2,000 crore in grant-in-aid to the National Cooperative Development Corporation (NCDC) over four years, with the aim of boosting cooperative activity across key rural sectors.
According to the government release, the outlay — Rs 500 crore annually from FY26 to FY29 — will enable NCDC to raise Rs 20,000 crore from the open market, which in turn will be disbursed as loans to cooperatives for setting up new projects, expanding plants, and meeting working capital needs.
'These funds will be utilized by NCDC for granting loans to cooperatives for setting up new projects, expansion of plants, and meeting working capital requirements,' the Cabinet note said.
The scheme is expected to benefit approximately 2.9 crore members of 13,288 cooperative societies spread across various sectors such as dairy, livestock, fisheries, sugar, textiles, food processing, storage, cold chains, labour and women-led cooperatives.
NCDC will act as the executing agency and will oversee loan disbursement, implementation monitoring, and recovery. It will provide long-term credit and working capital loans either directly to cooperatives or through state governments, as per its funding guidelines.
Eligible cooperatives will be considered for direct assistance against admissible security or state guarantees.
The Cabinet stated that the infusion of funds will allow cooperatives to modernise infrastructure, enhance productivity, and generate rural employment, while helping bridge socio-economic gaps and expanding the role of women in the cooperative economy.
India currently has more than 8.25 lakh cooperative societies with over 29 crore members, including 94% of farmers associated in some capacity. The scheme aims to strengthen this ecosystem by enabling cooperatives to access capital for growth and diversification.
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