In a major push to strengthen India’s cooperative ecosystem, Union Cabinet chaired by Prime Minister Narendra Modi has approved a new Central Sector Scheme titled “Grant-in-Aid to National Cooperative Development Corporation (NCDC),” with a total outlay of Rs 2,000 crore to be implemented over four years from 2025–26 to 2028–29, allocating Rs 500 crore each year.
The grant will enable NCDC to raise Rs 20,000 crore from the open market, which will be used to provide financial support to cooperatives for setting up new projects, expanding existing operations, and meeting their working capital requirements. This move is expected to benefit around 2.9 crore members from 13,288 cooperative societies engaged in sectors such as dairy, livestock, fisheries, sugar, textiles, food processing, storage, labour, and women-led enterprises.
According to the government, the scheme aims to provide long-term credit for modernization, technology upgrades, and capacity expansion, as well as short-term funds to help cooperatives run their businesses efficiently. Loans will be provided either directly to eligible cooperatives or routed through state governments, depending on NCDC's funding guidelines.
NCDC will serve as the executing agency responsible for disbursing funds, monitoring project implementation, conducting follow-ups, and ensuring loan recovery. Financial assistance will cover long-term credit for setting up projects, modernization, and expansion, along with working capital support to ensure smooth and profitable operations.
The scheme is expected to strengthen the financial health of cooperatives by creating income-generating assets, improving liquidity, and enhancing productivity. It will also generate employment across skill levels and promote greater participation of women in the workforce. By supporting diversification and infrastructure modernization, the scheme aims to boost the overall profitability and socio-economic impact of cooperatives.
India has a vast cooperative network of over 8.25 lakh societies, encompassing more than 29 crore members. The sector plays a vital role in rural development and contributes significantly to agriculture, banking, dairy, handloom, housing, and other areas. Nearly 94% of Indian farmers are associated with cooperatives in some form.
