NCDC: How India Funds Its Cooperatives

NCDC stands for the National Cooperative Development Corporation. It is a money-lender built only for co-ops. It gives loans and grants. It also offers advice on planning projects.

• It was created by a law, the NCDC Act, 1962.
• It started work in 1963.
• So it is a statutory body, not a company or a co-op itself.
• It works under the Ministry of Cooperation.
• Its head office is at Hauz Khas, New Delhi.
• The 1962 Act was changed in 1973, 1974 and 2002. Each time, NCDC got new ways to raise money.

Why co-ops need it

• India has more than 8.44 lakh co-ops.
• They have over 30 crore members.
• Nearly 94% of farmers are linked to a co-op in some way.
• Many of them need long-term loans to grow.
• NCDC gives loans meant only for co-op work.

A new ministry in 2021

• A separate Ministry of Cooperation was created on 6 July 2021.
• Its motto is “Sahkar se Samriddhi”, meaning prosperity through cooperation.
• Before this, the Agriculture Ministry looked after co-ops.
• Amit Shah is the first Union Minister of Cooperation.
• NCDC moved under this new ministry.

NCDC funds both farm and non-farm co-ops. Its help covers the whole chain, from the field to the market.

• Farm work: production, processing, storage, cold chains and marketing of crops.
• Farm inputs: supply of seeds and fertilisers.
• Non-farm work: dairy, poultry, fishery, handloom and silk.
• Weaker sections: co-ops of women, Scheduled Castes and Scheduled Tribes.
• It also runs many Central schemes on behalf of the Government.

• In 2014-15, NCDC gave out ₹5,735.51 crore.
• In 2024-25, this rose to ₹95,182.88 crore.
• By October 2025, it had already given out ₹49,799.06 crore for 2025-26.
• In 2025, the Cabinet approved a ₹2,000 crore grant to NCDC for 2025-26 to 2028-29.
• That is ₹500 crore a year. NCDC plans to use it to raise about ₹20,000 crore from the market.

Example: sugar mills

• NCDC has lent ₹10,005 crore to 56 co-op sugar mills.
• The loans help mills set up ethanol plants and meet daily costs.
• A mill now pays only 10% of a project’s cost. NCDC funds the other 90%.
• Earlier, the split was 70:30.
• The term-loan interest rate was cut to 8.5%.

Many NCDC schemes end with the word “Sahakar”, which means cooperation. Exams like to ask which scheme does what. This table puts them side by side.

• Two schemes are only for women: Nandini Sahakar and Swayam Shakti Sahakar.
• Yuva Sahakar gives extra support to the North-East and to Aspirational Districts.

How the Bill became law

• The NCDC (Amendment) Bill, 2026 came to the Lok Sabha on 10 August 2026.
• The Lok Sabha passed it on 11 August 2026.
• The Rajya Sabha passed it on 12 August 2026.
• It amends the NCDC Act, 1962.

The main changes

• Direct funding: NCDC can give loans and grants straight to co-op societies.
• Helper bodies: it can also fund other bodies that work for co-ops. The money must be used for co-op societies.
• Shares: with the Centre’s approval, NCDC can buy shares in co-ops and such bodies.
• Foodstuffs: the meaning now includes any food item the Centre notifies.
• Industrial goods: the old limit on where such units must be located is gone.
• Security: NCDC may still ask borrowers to offer security for loans.

Why it was needed

• Many State agencies and expert bodies help co-ops with storage, technology or marketing.
• They are not registered as co-ops. So NCDC could not fund them directly.
• Their projects had to go through States or co-op societies. This caused delays and low uptake.

What did not change

• Cooperative societies remain the main users of NCDC money.
• The law adds no extra budget support from the Government.
• Minister of State for Cooperation Murlidhar Mohol said this in Parliament.
• (The Hindu; DD News)

Cooperatives also have a place in the Constitution. The 97th Amendment, 2011 made three changes.

• It added the words “or co-operative societies” to Article 19(1)(c). Forming one became a fundamental right.
• It added Article 43B, a Directive Principle. The State should promote co-ops.
• It added Part IXB, with rules for running co-ops.

• “Cooperative societies” is a State List subject.
• Part IXB was passed without approval from half the State legislatures.
• So on 20 July 2021, the Supreme Court limited it.
• In Union of India v Rajendra N Shah, it said Part IXB now applies only to multi-State co-ops.
• Article 19(1)(c) and Article 43B were not affected.