Government Approves Major Funding Boost for NCDC
In a significant policy move to strengthen the cooperative sector, the Union Cabinet on Thursday approved a ₹2,000 crore grant-in-aid to the National Cooperative Development Corporation (NCDC). The financial support will be provided over a four-year period, enabling the organisation to bolster its lending capacity and support millions of farmers and cooperatives across India.
The decision was taken during a meeting of the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi. Announcing the move, Information and Broadcasting Minister Ashwini Vaishnaw emphasized that the financial assistance aims to further reinforce the strong financial foundation of NCDC and empower the cooperative network at the grassroots level.
“This capital grant-in-aid of ₹2,000 crore over four years will enable NCDC to significantly increase its lending capacity. The organisation is expected to mobilise an additional ₹20,000 crore with the help of this funding,” Vaishnaw stated during a press briefing.
Supporting India’s Massive Cooperative Network
Established with the mandate to support cooperatives in sectors such as agriculture, dairy, fisheries, and rural development, NCDC plays a crucial role in rural economic empowerment. The institution currently extends loans to more than 8.25 lakh cooperatives, which collectively serve around 29 crore members. Remarkably, 94% of these members are farmers, underscoring the organisation’s deep-rooted connection to India’s agrarian landscape.
The fresh infusion of funds is expected to enhance NCDC’s operational scope and make credit more accessible to cooperatives operating in rural and semi-urban areas. This is particularly significant at a time when access to low-cost, timely credit remains a critical need for small and marginal farmers.
Robust Financial Health and Lending Model
NCDC has maintained a stellar financial record, with a loan recovery rate of 99.8% and zero non-performing assets (NPAs), according to the government. This level of financial discipline has positioned the organisation as a trusted institution capable of scaling up its lending without risk of default.
The grant-in-aid approved by the Cabinet will be treated as equity support, which will further improve NCDC’s creditworthiness and its ability to raise resources from various markets, including development finance institutions and banks.
Strategic Step to Empower Rural India
The funding support to NCDC aligns with the government’s broader objective to boost rural development through cooperatives. As cooperatives serve as a vital tool for collective ownership and risk-sharing, this move is expected to not only strengthen the financial base of cooperative societies but also generate employment, enhance productivity, and improve incomes for millions of rural households.
Analysts view the Cabinet’s decision as a forward-looking initiative that reinforces the cooperative model as a viable and sustainable economic alternative, especially in rural regions. By enhancing the financial muscle of NCDC, the government is effectively ensuring that cooperatives continue to be catalysts for inclusive development.
Outlook and Future Plans
With the approved ₹2,000 crore capital grant, NCDC is set to chart a more ambitious course over the next four years. The anticipated ₹20,000 crore in additional funds that this grant could help mobilise is likely to be channelled into high-impact sectors including agri-infrastructure, food processing, dairy, and renewable energy cooperatives.
As India gears up for a more inclusive and resilient economy, the enhanced role of cooperatives—powered by institutions like NCDC—could emerge as a key pillar of sustainable development. The Cabinet’s decision marks a major milestone in that direction.
