New Delhi, July 31 (UNI) The Union Cabinet, chaired by Prime Minister Narendra Modi, today approved the Central Sector Scheme ‘Grant in aid to National Cooperative Development Corporation (NCDC)’, with an outlay of Rs 2,000 crore over four years from 2025-26 to 2028-29, to extend loans to cooperatives for their various activities, said an official statement.
This grant is expected to enable the NCDC to mobilise Rs 20,000 crore from the open market within the same period.
The funds raised will be used by the NCDC to extend loans to cooperative societies for new projects, expansion of existing plants, and to meet working capital requirements.
Approximately 2.9 crore members belonging to 13,288 cooperative societies across sectors such as dairy, livestock, fisheries, sugar, textiles, food processing, storage and cold storage, as well as labour and women-led cooperatives, are expected to benefit from the scheme.
The NCDC will be the nodal executing agency responsible for disbursing funds, monitoring project implementation, following up on progress, and recovering loans extended from the grant.
Loans will be provided by NCDC either directly to eligible cooperatives or through state governments, in accordance with established guidelines. Cooperatives that meet direct funding criteria may receive financial assistance against admissible security or state government guarantees.
The loans offered will cover long-term credit requirements for setting up, modernisation, technology upgradation, and expansion of project facilities across various sectors. Working capital loans will also be extended to ensure smooth and profitable business operations, said the statement.
The infusion of funds is expected to facilitate the creation of income-generating capital assets and provide cooperatives with necessary liquidity. Beyond economic gains, cooperatives embody principles of democracy, equality, and community welfare, serving as vital instruments in bridging socio-economic disparities and enhancing women’s participation in the workforce.
Availability of loans will strengthen cooperatives’ capacities, allowing for modernisation, diversification, increased profitability, and improved productivity, thereby generating employment and improving the economic conditions of farmer members, the statement added.
India boasts over 8.25 lakh cooperative societies with a membership exceeding 29 crore, with 94 per cent of farmers associated with cooperatives in some capacity, said the statement. The cooperative sector plays a crucial role in India’s socio-economic landscape, contributing significantly to rural development, infrastructure, and job creation.
