Introduction

The National Cooperative Development Corporation (Amendment) Bill, 2026 represents a significant expansion of cooperative financing mechanisms in India. Passed by Parliament, this legislation amends the NCDC Act, 1962 to strengthen and diversify cooperative development across the country.

What is NCDC?

About and Establishment

  • NCDC is a statutory organisation established in 1963 under the National Cooperative Development Corporation Act, 1962
  • Functions under the administrative control of the Ministry of Cooperation
  • Previously amended in 1973, 1974, and 2002

Core Mandate

  • Promote, strengthen, and develop farmer cooperatives to increase production and productivity
  • Institute post-harvest facilities
  • Provide financial assistance for processing, storage, cold chain, and marketing of agricultural produce
  • Support non-farm and weaker section activities including dairy, livestock, handloom, poultry, fisheries
  • Focus on cooperatives led by women and SC/ST communities

Financial Growth

  • Disbursements jumped from Rs. 5,735 crore (2014-15) to Rs. 95,182 crore (2024-25)
  • Disbursed Rs. 1.27 lakh crore in FY 2025-26

Key Highlights of the Amendment Bill

1. Direct Financial Assistance

  • Previously, NCDC could only provide loans and grants directly to national-level cooperatives and multi-State cooperatives
  • Amendment expands direct financing to any cooperative society or entity engaged in cooperative development
  • NCDC can continue providing funds to State Governments while gaining an additional direct-financing channel

2. Expanded Definition of "Foodstuffs"

  • Broadens to include processed food and any other food items notified by the Central Government
  • More food-related cooperatives become eligible for NCDC support

3. Industrial Goods

  • Removes the existing requirement that industrial cooperatives, cottage and village industries must be located in rural areas

4. Wider Investment Powers

  • With prior approval of the Central Government, NCDC can now participate in share capital of any cooperative or entity engaged in cooperative development

5. Information Sharing

  • Empowers NCDC to collect and furnish credit information
  • Information may be exchanged with:
  • Central Government
  • Reserve Bank of India (RBI)
  • Banks
  • Other notified financial institutions

Constitutional Framework for Cooperatives

97th Constitutional Amendment Act (2011)

  • Article 19(1)(c): Right to form cooperative societies made a Fundamental Right
  • Article 43B (DPSP): Mandates State to promote voluntary formation, autonomous functioning, democratic control, and professional management of cooperative societies
  • Part IXB inserted into the Constitution to provide uniform legal framework and constitutional status for cooperative societies

Important SC Ruling

  • Union of India v. Rajendra N. Shah (2021): Supreme Court held that Part IXB remains operative only insofar as it concerns multi-State cooperative societies
  • Multi-state cooperatives fall under Union List and are regulated by the Multi-State Cooperative Societies (MSCS) Act, 2002 under the Central Registrar

Significance of Cooperatives for India

Economic Significance

  • India has world's largest cooperative ecosystem: 8.44 lakh cooperatives with 30 crore members
  • 94% of Indian farmers connected to cooperative network
  • Export achievement: National Cooperative Exports Limited (NCEL) achieved 15.4 LMT exports worth Rs. 6,295 crore across 38 countries by mid-2026
  • Market stabilization: Cooperatives prevent private monopolies in fertilizers (IFFCO/KRIBHCO) and dairy (Amul)

Social Significance

  • Women's Empowerment: Through schemes like Nandini Sahakar, NCDC disbursed Rs. 4,823 crore to women-led cooperatives (2021-2025)
  • Nearly 10 crore women linked to cooperatives through SHGs
  • SC/ST Support: Rs. 57 crore extended to SC/ST cooperatives over four years
  • Employment: Over 25,000 new societies registered under White Revolution 2.0

Technological and Infrastructure Significance

  • Storage Infrastructure: Godowns completed in 145 PACS with storage capacity of 68,702 MT
  • PACS Transformation: From traditional credit institutions to multi-service centres
  • Urban Innovation: Bharat Taxi - India's first driver-centric cooperative mobility platform with 7.76 lakh registered drivers and 40.84 lakh customers

Concerns Raised Regarding the Bill

Federal Friction

  • Cooperative Societies (confined to one State) are a State Subject under Entry 32 of State List
  • Direct NCDC funding could bypass State Governments
  • Increased centralization may affect federal balance

Implementation Challenges

  • State governments play crucial oversight and auditing role
  • Direct funding without state coordination may lead to:
  • Overlapping jurisdictions
  • Monitoring issues

National Cooperation Policy (NCP) 2025

Vision

  • Aligned with goal of Viksit Bharat by 2047
  • Building supportive legal, economic, and institutional environment for cooperatives

Implementation Partners

  • NCDC collaborating with: IFFCO, NAFED, Amul, KRIBHCO, NDDB, NCEL, and NABARD
  • Focus on making cooperatives transparent, technology-driven, and professionally managed

Measures Needed to Strengthen Cooperatives

  1. Uniformity via Model Bye-laws: Standardize operations, improve accountability
  2. Administrative Reforms: Reduce political interference and elite capture (Vaidyanathan Committee, 2004)
  3. Professional Board of Management: Separate ownership of UCBs from banking functions (Malegam Committee recommendation)
  4. Bridging Digital Divide: Training programs for digital literacy
  5. Branding and Diversification: Develop umbrella brands, expand into eco-tourism, renewable energy, hydroponics

Conclusion

The vision of Sahkar-se-Samriddhi (Prosperity through Cooperation) can transform India's cooperative sector into a robust pillar of decentralized and inclusive economy, driving grassroots prosperity, economic participation, and sustainable development.