Why in the News?
Parliament passed the National Cooperative Development Corporation (Amendment) Bill, 2026, enabling the NCDC to provide loans and grants directly to cooperative societies.
What is NCDC?
- NCDC (National Cooperative Development Corporation) is a statutory corporation established under the National Cooperative Development Corporation Act, 1962.
- Functions under the Ministry of Cooperation.
- Promotes and finances cooperatives involved in production, processing, marketing, storage and trade of agricultural and allied produce.
What does the Amendment Change?
- Direct lending: NCDC can directly provide loans and grants to cooperative societies.
- Wider coverage: Definition of foodstuffs expanded to include processed food and other food items notified by the Centre.
- No additional budgetary outlay: The Bill does not provide for additional government financial assistance.
Why is it Needed?
- Faster flow of credit by removing intermediary delays.
- Supports over 8 lakh cooperatives with more than 30 crore members.
- Extends cooperative financing into value added food chains.
Why are States Concerned?
- Cooperation is largely a State subject.
- Direct central lending may bypass State governments and registrars.
- Raises concerns about cooperative federalism and centralisation.
Key Challenges
- Financial weakness and poor governance of PACS (Primary Agricultural Credit Societies).
- Dual regulatory control.
- Regional concentration of cooperatives.
- Delayed elections and audits.
- Limited professional management.
- Centre State friction.
Constitutional Framework
- Entry 32, State List: Incorporation and regulation of cooperative societies within a State.
- Article 43B: Promotes voluntary formation and autonomous functioning of cooperatives.
- Part IXB, Articles 243ZH to 243ZT: Constitutional provisions on cooperatives.
- Multi State Cooperative Societies Act, 2002: Governs cooperatives operating across multiple States.