New Delhi: The Union Cabinet on Thursday approved a Rs 2,000 crore grant-in-aid to National Cooperative Development Corporation (NCDC) for four years, a move that will help the organisation mobilise more funds for lending to cooperatives.
The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the central sector scheme ‘Grant in aid to NCDC’ with an outlay of Rs 2,000 crore for a period of four years from 2025-26 to 2028-29 (Rs 500 crore each year).
In a social media post, Union Cooperation Minister Amit Shah said the Cabinet decision would assist cooperative institutions in starting new projects and expansion.
The move will benefit millions of members associated with cooperatives, empower women to become self-reliant, and provide employment opportunities for the youth, he added.
“To further support a good financial model, the Cabinet approved the capital grant-in-aid of Rs 2,000 crore for NCDC for four years,” I&B Minister Ashwini Vaishnaw told reporters.
With this financial aid, NCDC will be able to mobilise additional Rs 20,000 crore for further lending, the minister said.
Currently, NCDC has a 99.8 per cent loan recovery rate and zero NPA, he added.
According to a statement, the decision is likely to benefit around 2.9 crore members of 13,288 co-operative societies of various sectors like dairy, livestock, fisheries, sugar, textile, food processing, storage and cold storage.
“On the basis of a grant in aid of Rs 2000 crore to NCDC from 2025-26 to 2028-29, NCDC will be able to raise Rs 20,000 crore from the open market over four years,” it added.
NCDC will use these funds to grant loans to cooperatives for setting up new projects/expansion of plants, and working capital requirements.
India has more than 8.25 lakh cooperatives with more than 29 crore members, and 94 per cent of farmers are associated with cooperatives in some form or the other.
Elaborating on the decision, the government said NCDC will be the executing agency for this scheme. It will disburse loans, monitor the implementation of the project, and also recover loans disbursed from the fund.
“Funds provided to these cooperatives will lead to the creation of income-generating capital assets and provide cooperatives with much-needed liquidity in the form of working capital,” the statement said.
