New Delhi: The Centre Monday introduced the National Co-operative Development Corporation (Amendment) Bill 2026 in Lok Sabha, seeking to expand the role of the National Cooperative Development Corporation (NCDC) in financing India’s cooperative sector.
The Bill’s objective is to ensure that financial assistance reaches cooperatives more quickly by widening the channels through which it can be delivered, while continuing to keep cooperative societies at the centre of the funding framework.
The NCDC is a statutory body under the Ministry of Cooperation that provides financial assistance for projects undertaken by cooperative societies. The bill, introduced by Minister of State (MoS) for Cooperation Murlidhar Mohol on behalf of Home and Cooperation Minister Amit Shah, proposes changes to the National Cooperative Development Corporation Act, 1962, aiming to make funding for cooperatives faster and more flexible.
Since the 1962 Act came into force, it has been amended three times previously—in 1973, 1974 and 2002—to diversify the Corporation’s sources of funds, expand its activities, allow direct financing of eligible cooperative societies and bring notified services under its mandate.
Explaining the intent behind the legislation, the Statement of Objects and Reasons of the Bill says, “The co-operative societies shall continue to remain the primary beneficiaries, while the proposed Bill widens the institutional channels through which assistance may reach and strengthen the co-operative sector.”
The biggest change proposed in the Bill is to broaden NCDC’s mandate. Under the existing Act, the corporation plans, promotes and finances programmes through cooperative societies. The latest amendment proposes changing this to planning, promoting and financing programmes for cooperative development.
To put it simply, the government wants NCDC to support not just cooperative societies but also the wider ecosystem that helps them function. The latest amendment seeks to further widen the role of NCDC given that the cooperative sector has grown significantly in recent years. The government says the proposed amendments reflect the rapid expansion of the cooperative sector after the creation of the Ministry of Cooperation in 2021.
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Why the change?
According to the government, many organisations today work to strengthen cooperatives by providing infrastructure, technology, processing, marketing and financial services. However, many of these bodies are not registered as cooperative societies.
Under the existing law, NCDC cannot directly fund them, even if their work ultimately benefits cooperatives. Instead, financial assistance has to be routed through state governments or cooperative societies which leads to delays and fewer projects commencing.
The latest amendment seeks to remove this hurdle. If passed, NCDC will be able to provide loans and grants directly to cooperative societies as well as other organisations engaged in cooperative development, provided that the money is ultimately used for the benefit of cooperatives.
The new Bill allows the NCDC with the approval of the Central government, to invest in the share capital of cooperative organizations. However, the entities that would qualify for such assistance will be decided by NCDC’s board.
The Bill also updates several provisions of the previous law. It expands the definition of foodstuffs to include processed food and other food items as notified by the Central government, removes geographical restrictions on industrial goods, updates references to newer cooperative laws and removes outdated provisions.
It also empowers NCDC to collect and share credit information with the Reserve Bank of India and other notified financial institutions to improve its lending operations. If approved by Parliament, the amendments seek to give NCDC greater flexibility to finance a wider range of institutions that work for the cooperative movement, while reducing procedural delays that currently arise because funding can only flow through cooperative societies or state governments.
(Edited by Nardeep Singh Dahiya)
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