📰 Latest Developments – Grant‑in‑Aid to NCDC (as of July–August 2025)
On July 31, 2025, the Union Cabinet, headed by Prime Minister Narendra Modi, approved the Central Sector Scheme “Grant in Aid to National Cooperative Development Corporation (NCDC)” with an overall outlay of ₹2,000 crore for four years (FY 2025‑26 to FY 2028‑29), allocating ₹500 crore per year (PM India).
Leveraging this support, the NCDC is expected to mobilise ₹20,000 crore from the open market over the same period, aimed at providing loans to cooperative societies for new investments, expansion, and working capital needs (PM India).
The initiative is poised to impact 2.9 crore members of approximately 13,288 cooperative societies across sectors such as dairy, fisheries, livestock, sugar, textiles, food processing, storage (cold storage), women-led and labour cooperatives (PM India).
NCDC serves as the executing agency: responsible for loan disbursement, implementation monitoring, recovery, and channeling funds either via state governments (state guarantee) or directly to eligible cooperatives as per NCDC guidelines (PM India).
The Cabinet also concurrently approved an additional ₹1,920 crore allocation to Pradhan Mantri Kisan Sampada Yojana (PMKSY), enhancing the total outlay to ₹6,520 crore towards strengthening agri-processing infrastructure and cooperative-led value chains (The Indian Express).
2. Recent Cabinet Approval (July 31, 2025)
– Scheme launched with ₹2,000 crore over four years
– Annual budget: ₹500 crore per year
– Enables NCDC to raise ₹20,000 crore from markets
(PM India, DD India, DD News)
3. Purpose & Utilisation of Funds
– Long-term and working capital loans to cooperatives
– Support for new project setups, technology upgrades, expansion, and operational liquidity
(Uni India, PM India)
4. Beneficiaries & Reach
– ~13,288 cooperatives to benefit
– ~2.9 crore members across sectors (dairy, fisheries, sugar, textiles, food & cold storage, women/labour cooperatives)
(PM India)
5. Implementation Strategy
– NCDC as implementing nodal agency
– Mode of finance: through State Governments (government guarantee) or direct funding
– Monitoring and loan recovery by NCDC
(DD India, PM India, Vajiram & Ravi)
6. Expected Impact
– Improved liquidity and working capital access
– Infrastructure and capacity enhancement in co‑ops → Boost productivity, diversification, modernization
– Job creation and increased participation of women and rural communities
(PM India, economictimes.indiatimes.com, DD India)
7. Context & Policy Synergy
– Scheme aligns with broader push under ’Sahkar se Samriddhi’ and Ministry of Cooperation's focus
– Synergies with PMKSY and rural value-chain development
– NCDC’s market borrowings and cooperative financing complement other flagship schemes
(The Hans India)
9. Critical Perspectives
– Implementation challenges: fund absorption and monitoring
– Need for convergence with state-level cooperative action plans
– Focus on measuring actual member-level impact; avoidance of financial leakage
– Importance of upscaling capacity building and digital monitoring for disbursement transparency
10. Conclusion & Key Takeaways
Conclude by highlighting the scheme's transformative potential in financing cooperatives and driving rural development, while noting operational challenges that UPSC aspirants should evaluate critically.
✅ Quick Notes for Aspirants
Cabinet approval date: July 31, 2025
Scheme period: FY 2025‑26 to FY 2028‑29
Total grant‑in‑aid: ₹2,000 crore (₹500 crore/year)
Leverage (market borrowing): ₹20,000 crore
Beneficiaries: ~13,288 co‑operatives, ~2.9 crore members
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