Cabinet Approves ₹2,000 Cr Grant to NCDC to Empower Cooperatives Nationwide

The Cabinet’s approval of ₹2,000 crore in grant-in-aid will empower NCDC to leverage these funds to raise ₹20,000 crore from the open market over four years.

In a significant move to boost the cooperative sector and rural economy, the Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved the Central Sector Scheme "Grant-in-Aid to the National Cooperative Development Corporation (NCDC)" with a total outlay of ₹2,000 crore. The scheme will be implemented over a four-year period from FY 2025–26 to FY 2028–29, with an annual allocation of ₹500 crore.

This strategic infusion of capital aims to enhance the financial autonomy and operational capabilities of India’s vast network of cooperative societies, facilitating large-scale economic inclusion, employment generation, and capacity expansion across multiple sectors.

Leveraging Market Potential: ₹20,000 Cr Mobilization

This multiplier effect of 10 times the original grant is expected to significantly strengthen the financial base of cooperative societies across India.

These funds will be utilized by the NCDC to provide affordable loans to cooperatives for:

• Setting up new projects

• Expansion or modernization of existing plants

• Technology upgrades and diversification

• Working capital support for ongoing business operations

Beneficiaries: Over 2.9 Crore Cooperative Members

The scheme is expected to benefit approximately 2.9 crore members belonging to over 13,288 cooperative societies operating in diverse sectors such as:

• Dairy and livestock

• Fisheries and aquaculture

• Sugar and textiles

• Food processing and cold storage

• Labour cooperatives and women-led cooperatives

This broad sectoral inclusion reinforces the government’s aim to create a resilient and self-sustaining cooperative ecosystem, bridging the gap between rural producers and national markets.

Execution and Implementation Strategy

The National Cooperative Development Corporation (NCDC) will serve as the nodal executing agency for this scheme. Its responsibilities will include:

1. Disbursement of loans to eligible cooperatives

2. Monitoring project implementation and loan performance

3. Recovery of loans disbursed from the fund

NCDC will route loans either directly to cooperatives that meet funding eligibility norms or via state governments, based on the cooperative’s creditworthiness and project feasibility.

Cooperatives that meet NCDC's direct funding criteria will receive loans against admissible collateral or state government guarantees, thereby ensuring both accountability and ease of access.

Economic and Social Impact

The approved scheme is expected to yield multi-dimensional benefits that extend well beyond financial metrics.

1. Capital Creation and Liquidity

The funding will help cooperatives build income-generating capital assets and provide essential liquidity to run and scale operations efficiently.

2. Employment Generation

The scheme has massive employment potential, as term loans for setting up new projects and upgrading existing infrastructure will create direct and indirect jobs across skill levels — from agricultural laborers to technicians and logistics workers.

3. Women Empowerment and Social Equity

Women-led cooperatives will receive dedicated support under the scheme. By promoting democratic governance, economic participation, and community-driven decision-making, cooperatives serve as instruments of inclusive growth and rural empowerment.

4. Boost to Rural and Agri-Industries

With long-term credit support, cooperatives can diversify their activities, adopt modern technology, and expand market linkages, contributing to increased productivity, better returns for farmer-members, and overall rural prosperity.

Government’s Vision for Cooperative Development

This initiative aligns with the broader vision of the Government of India to revitalize the cooperative sector as an engine of grassroots development under the “Sahkar se Samriddhi” (Prosperity through Cooperation) initiative. The Ministry of Cooperation, headed by Union Home Minister Shri Amit Shah, has been actively working to reform, modernize, and support cooperatives in playing a pivotal role in India’s economic transformation.

About NCDC

The National Cooperative Development Corporation, established under an Act of Parliament in 1963, is a statutory corporation under the Ministry of Cooperation. It has played a vital role in financing, planning, and promoting cooperative development programs across agriculture, agro-processing, services, and rural infrastructure.

With this new scheme, NCDC’s outreach and financial instruments are expected to become more robust, transforming cooperatives into economically viable and socially responsible enterprises.