New Delhi: The National Co-operative Development Corporation (NCDC) is set for a wider role in financing India’s cooperative sector, with Parliament approving amendments that seek to make funding more direct and flexible.
The National Co-operative Development Corporation (Amendment) Bill, 2026 was introduced in the Lok Sabha on August 10 and subsequently passed by the House. The Rajya Sabha also passed the legislation on August 12, clearing the way for the proposed changes to the NCDC Act, 1962.
At the heart of the amendment is a relatively simple change: NCDC would no longer be limited to financing programmes through cooperative societies. Its mandate is being widened to cover programmes for cooperative development, allowing financial assistance to reach a broader set of institutions working to strengthen the cooperative ecosystem.
The legislation is particularly significant because a growing number of organisations involved in areas such as infrastructure, technology, processing, marketing and financial services work closely with cooperatives without themselves being registered as cooperative societies.
From financing cooperatives to supporting cooperative development
NCDC is a statutory organisation under the Ministry of Cooperation and was established under the NCDC Act, 1962. Its role has traditionally included planning, promoting and financing programmes related to agricultural production, processing, marketing, storage and other activities carried out on cooperative principles.
The government now wants to expand that approach.
The amendment changes the language of the NCDC’s mandate from planning, promoting and financing programmes through cooperative societies to planning, promoting and financing programmes for cooperative development.
That distinction could have practical consequences.
Under the existing framework, organisations that support cooperatives but do not themselves qualify as cooperative societies may face difficulties accessing NCDC assistance. Funding often has to move through state governments or eligible cooperative institutions, adding another layer to the process.
The amendment seeks to provide a more direct route.
Wider access to NCDC loans and grants
One of the key provisions of the legislation is to enable NCDC to provide loans and grants directly to cooperative societies as well as other organisations engaged in cooperative development, subject to the conditions laid down under the amended law.
The underlying principle remains that the cooperative sector should be the ultimate beneficiary of the assistance.
This could be particularly relevant for projects where the cooperative is only one part of a larger institutional or infrastructure network. For example, an organisation providing technology, processing, storage, marketing or other services may be able to receive NCDC support where the activity is designed to strengthen cooperatives.
The government has argued that such flexibility is increasingly necessary as the cooperative sector expands and becomes involved in a wider range of economic activities.
NCDC can invest in share capital
The amendment also proposes another important financing avenue.
With the approval of the Central Government, NCDC will be able to invest in the share capital of cooperative organisations. The entities eligible for such assistance will be determined by the NCDC Board in accordance with the framework provided under the law.
This gives NCDC an additional instrument beyond conventional loans and grants and could potentially help cooperative organisations mobilise capital for expansion and development.
Why the government wants to change the law
The NCDC Act dates back to 1962, when India’s cooperative landscape was considerably different from what it is today.
Over the years, the Act has been amended to expand NCDC’s sources of funds and activities and to allow it to provide assistance more directly to eligible cooperative institutions.
The latest amendment comes against the backdrop of the government’s broader push to expand and modernise the cooperative sector following the creation of the Ministry of Cooperation in 2021.
The government has also pointed to the emergence of new institutions and business models supporting cooperatives. These include organisations involved in technology, processing, infrastructure, marketing and financial services.
The argument is that a law designed around the cooperative structure of the 1960s needs greater flexibility to deal with today’s cooperative ecosystem.
Some other provisions also updated
The Bill does more than change NCDC’s funding channels.
It proposes to expand the definition of foodstuffs to include processed food and other food items that may be notified by the Central Government. It also removes certain geographical restrictions relating to industrial goods and updates references to newer cooperative legislation.
Several provisions considered outdated have also been proposed for removal or modification.
Another notable provision relates to credit information. NCDC would be empowered to collect and share credit information with the Reserve Bank of India and other notified financial institutions. The move is intended to strengthen NCDC’s lending and credit-management capabilities.
What the amendment could mean for cooperatives
For the cooperative sector, the most important takeaway is not simply that NCDC will have more powers. It is that the funding architecture could become less dependent on a single route.
If implemented effectively, organisations working on cooperative infrastructure and services could have greater access to institutional finance, while cooperatives could benefit indirectly through better technology, processing capacity, market access and other support systems.
That could matter in sectors where cooperatives increasingly operate as part of larger value chains rather than as standalone institutions.
At the same time, the success of the changes will depend on how the NCDC Board and the Central Government frame the eligibility criteria, safeguards and operating procedures under the amended law.
The amendment therefore marks more than an expansion of NCDC’s lending mandate. It represents an attempt to align an institution created more than six decades ago with a cooperative sector that has become considerably larger, more diversified and more interconnected.
