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)” with a total outlay of Rs.2000 crore for four years, spanning from 2025-26 to 2028-29. The allocation will be made at Rs.500 crore per year during the scheme period.
This significant decision aims to strengthen cooperative societies across multiple sectors by providing them with financial resources for new projects, expansion, modernization, technology upgrades, and working capital requirements.

Funding Structure and Financial Implications

The scheme will be fully funded through budgetary support from the Government of India. Based on the grant-in-aid of Rs.2000 crore over the four-year period, NCDC will be able to raise an additional Rs.20,000 crore from the open market.
These market-raised funds, along with the government’s grant, will be utilized to provide loans to cooperatives, ensuring access to both long-term project funding and short-term working capital support. This blended financial approach will enhance the operational capacity and sustainability of cooperatives nationwide.

Beneficiaries of the Scheme

The scheme is expected to benefit approximately 2.9 crore members of 13,288 cooperative societies operating across various sectors, including:

• Dairy
• Livestock
• Fisheries
• Sugar
• Textile
• Food Processing
• Storage and Cold Storage
• Labour Cooperatives
• Women-led Cooperatives

These sectors, vital to rural and semi-urban economies, will gain increased capacity to modernize infrastructure, improve productivity, and expand market reach.

Implementation Strategy

The National Cooperative Development Corporation (NCDC) will serve as the executing agency for the scheme. The key responsibilities of NCDC will include:
1. Disbursement of Funds: Providing loans to cooperatives either through the state government or directly, as per existing NCDC guidelines.
2. Direct Funding Eligibility: Cooperatives that meet the criteria outlined in NCDC’s direct funding guidelines will be eligible for assistance against admissible security or state government guarantees.
3. Loan Purposes:

• Long-term credit for setting up, modernizing, upgrading technology, or expanding facilities.
• Working capital loans to ensure smooth business operations and profitability.

4. Monitoring and Recovery: Ensuring proper follow-up, monitoring project implementation, and loan recovery.

Expected Impact and Employment Generation

The scheme’s funding is projected to deliver multi-dimensional socio-economic benefits:

• Creation of Income-Generating Assets: The financial support will help cooperatives build infrastructure and acquire assets that generate sustainable income.
• Liquidity Support: Access to working capital will stabilize operations and reduce financial strain.
• Women’s Workforce Participation: As women-led cooperatives gain more financial support, female participation in the workforce is expected to rise.
• Capacity Augmentation: Loans will enable cooperatives to modernize operations, diversify activities, increase profitability, and improve productivity.
• Employment Opportunities: Both direct and indirect job creation is anticipated, spanning different skill levels across rural and semi-urban areas.

Sector-Wide Significance

The cooperative sector is a key driver of the Indian economy, particularly in rural development, infrastructure, and job creation. With over 8.25 lakh cooperatives and more than 29 crore members, the sector has a vast reach. Significantly, 94% of farmers are associated with cooperatives in some form, highlighting the sector’s pivotal role in agricultural and allied industries.

• Cooperatives contribute across a broad range of activities:
• Credit and Banking
• Fertilizer Distribution
• Sugar Production
• Dairy Operations
• Marketing
• Consumer Goods
• Handloom and Handicraft
• Fisheries
• Housing

The approved scheme will especially support weaker sectors such as dairy, poultry, livestock, fisheries, sugar, textile, processing, storage, cold storage, labour cooperatives, and women cooperatives.

Strategic Importance

By extending financial support, the Government of India aims to bridge socio-economic gaps through the cooperative movement. The scheme’s emphasis on modernization, diversification, and infrastructure development aligns with national priorities of increasing productivity, profitability, and rural employment.
The multiplier effect of this scheme - where Rs.2000 crore in government grants unlocks Rs.20,000 crore in market borrowings - demonstrates a high-leverage approach to funding. This will ensure that cooperatives have access to substantial financial resources for both capital investment and operational needs over the next four years.
The Central Sector Scheme “Grant in aid to NCDC” marks a significant step in empowering India’s cooperative sector. With targeted funding, efficient execution by NCDC, and the ability to raise additional market resources, the scheme is poised to boost rural economies, enhance infrastructure, promote inclusivity, and generate employment.
This decision reinforces the government’s commitment to strengthening cooperatives as a sustainable, democratic, and community-driven model for socio-economic development.