Grant-in-Aid to NCDC Scheme: ₹2000 Crore Central Sector Initiative Empowering Cooperatives through Long-Term Credit

Relevance: GS Paper III Economy – Agriculture, Infrastructure, and Inclusive Development

In order to support long-term credit support and strengthen India’s cooperative sector, the Central Sector launched the ₹2000 crore Grant-in-Aid to NCDC Scheme. This program, which runs from FY 2025–26 to FY 2028–29, aims to empower FPOs (Farmer Producer Organizations), rural businesses, and agriculture cooperatives by providing them with low-interest loans, modernization capital, and working capital assistance. The National Cooperative Development Corporation (NCDC) is the program’s anchor, and it supports the government’s overarching goals of financial inclusion, inclusive rural development, and Atmanirbhar Bharat. It promotes cooperative-led entrepreneurship and sustainable growth by funding projects in industries like dairy, fisheries, food processing, storage, marketing, and supply chain infrastructure.

Regarding the NCDC Scheme Grant

To provide cooperatives with financing to establish new initiatives, grow current plants, and cover working capital needs.

• Over the course of four years, NCDC will use the grant to raise an extra Rs 20,000 crore from the open market. NCDC is the scheme’s executing agency, with the goals of loan collection, project implementation oversight, and distribution. Central Sector Scheme is the type.

Long-term financing for the establishment

modernization, technological advancement, and growth of project facilities in a variety of industries will be included in the loans offered.

• Working capital is necessary for cooperatives to operate successfully and efficiently.

Benefits/Implications of the Scheme

Increase women’s employment and close the socioeconomic divide. Encourage capacity expansion, modernization, and diversification, which boost profitability and productivity. 

• Provide liquidity to cooperatives in the form of working capital; and • Create income-generating capital assets.

About the NCDC (National Cooperative Development Corporation)

Genesis Founded as a statutory corporation in 1963

• Headquarters: New Delhi
• Ministry: Cooperation Ministry.
• Organizing and advancing cooperatively based programs for the production, processing, marketing, storage, export, and import of livestock, agricultural products, etc.

Mains: 

Question: Examine the economic rationale for providing long-term credit and working capital support to cooperatives through the Grant-in-Aid to NCDC Scheme. How will this impact rural entrepreneurship and employment generation, especially among women?

Note: To take UPSC mains tests on GS Mains Q & A, click the link that is attached.

MCQs:

Note: To take practice tests on Daily current Affairs MCQs, click the link that is attached.

Question: Consider the following statements regarding the Grant-in-Aid to NCDC Scheme:

1. It is a Centrally Sponsored Scheme aimed at providing subsidies to agricultural labourers.
2. The scheme aims to provide long-term credit to cooperatives and FPOs through low-interest loans and working capital support.
3. NCDC is the implementing and executing agency for the scheme.
4. The entire funding under the scheme is sourced from NABARD.

Which of the above statements are correct?

1. a) 1 and 4 only
2. b) 2 and 3 only
3. c) 2, 3, and 4 only
4. d) 1, 2, and 3 only

Answer: b) 2 and 3 only

UPSC Exam 2025 Related Articles

UPSC General Studies Paper Preparation