Cabinet Approves ₹2000 Crore Grant-in-Aid to NCDC to Empower Cooperatives Across Sectors
Move to enable ₹20,000 crore in market borrowing, strengthen cooperative infrastructure, and create jobs in rural India
New Delhi | August 1: In a significant policy move aimed at revitalizing India’s rural economy through the cooperative sector, the Union Cabinet chaired by Prime Minister Narendra Modi has approved the Central Sector Scheme titled “Grant-in-aid to National Cooperative Development Corporation (NCDC)” with a total outlay of ₹2,000 crore for the period 2025–26 to 2028–29.
Under this scheme, the government will provide ₹500 crore each year for four years as budgetary support. Leveraging this grant, NCDC is expected to raise ₹20,000 crore from the open market, which will be deployed as loans to cooperative societies across the country.
Boost to Over 2.9 Crore Cooperative Members
The financial infusion is expected to benefit 2.9 crore members of 13,288 cooperative societies involved in diverse sectors such as dairy, livestock, fisheries, sugar, textile, food processing, storage and cold chains, labour, and women-led cooperatives.
The funds will support both long-term project financing for modernization, technology upgrades, and infrastructure development, as well as working capital loans to help cooperatives run their operations more efficiently.
NCDC as the Executing Agency
The National Cooperative Development Corporation (NCDC) will serve as the executing agency for the scheme, overseeing disbursement, monitoring, and recovery of loans. Cooperatives will be eligible for financial assistance either directly from NCDC or through state governments, based on existing funding guidelines and admissible securities or guarantees.
Expected Impact and Employment Potential
The scheme is projected to have far-reaching implications:
- Creation of income-generating capital assets for cooperatives
- Enhanced liquidity for day-to-day operations
- Strengthening of cooperatives through modernization and diversification
- Employment generation across multiple skill levels in rural areas
- Greater economic participation of women, especially in women-led cooperatives
The initiative is seen as a timely intervention to empower India’s cooperative ecosystem, which comprises over 8.25 lakh cooperative entities with more than 29 crore members, of which 94% are farmers.
A Strategic Rural Push
Cooperatives have long been the backbone of rural economic infrastructure. Their presence spans across sectors—from credit and banking to dairy, housing, and handicrafts. This fresh support from the central government reinforces the cooperative model as a key engine for inclusive growth.
The move comes in the backdrop of a national push for self-reliance, rural prosperity, and decentralized development, with cooperatives expected to play a pivotal role in bridging socio-economic gaps and driving grassroots-level transformation.
