National Cooperative Development Corporation (Amendment) Act,
2026
Prelims:
Indian Polity
& Governance
Mains:
GS Paper II: Government
policies and interventions, GS Paper III: Agriculture
Current relevance:
The
Samyukt Kisan Morcha (SKM) has criticised the National Cooperative
Development Corporation (Amendment) Act, 2026, alleging that its expanded
financial and operational scope could encroach upon States’ powers over
cooperatives and divert resources away from agriculture and rural
development.
Highlights:
NCDC (Amendment) Act, 2026
– Key Changes:
1.
Parliament
passed the NCDC (Amendment) Bill, 2026 in August to amend the NCDC
Act, 1962.
2.
The
amendment expands the financial and operational scope of the National
Cooperative Development Corporation.
3.
It
permits the NCDC to directly extend financial assistance to cooperative
societies.
4.
It
also allows the NCDC to take shares in cooperative societies.
5.
The
earlier requirement that eligible industrial and village cooperatives must
be located only in rural areas has been removed.
6.
Consequently,
NCDC operations can extend into non-agricultural sectors and beyond rural
areas.
Constitutional dimension:
1.
Cooperation is identified in the given information
as a subject under the State List in the Seventh Schedule.
2.
The
NCDC is a statutory corporation, with its original legal basis in the NCDC
Act, 1962.
Judicial dimension:
1.
The
SKM referred to a 2021 Supreme Court order, arguing that the Union has limited
powers to intervene in cooperative societies under State governments.
2.
It
alleges that the 2026 amendment could weaken this federal limitation by
enabling more direct Union-level institutional involvement.
3.
Thus,
the controversy raises a broader question of balancing national-level
cooperative development with State autonomy and cooperative federalism.
Major Challenges:
v Federalism & Cooperative Autonomy:
1.
The
Samyukt Kisan Morcha (SKM) argues that “cooperation” falls
within the State List under the Seventh Schedule, making regulation of
State-level cooperatives primarily a State concern.
2.
It
contends that direct NCDC involvement in cooperative societies could lead to
greater centralisation of cooperative institutions.
3.
The
organisation also invoked the principles of the International Cooperative
Alliance, particularly autonomy, independence and democratic control of
cooperatives.
4.
According
to the SKM, allowing direct financing and shareholding by NCDC could affect
these principles of cooperative autonomy.
v Agriculture & Rural Development:
1.
The
SKM argues that cooperatives have traditionally played an important role in agriculture,
rural industries and infrastructure development.
2.
Removing
the rural-location requirement could allow NCDC resources to flow towards urban
and non-agricultural activities.
3.
It
fears this could reduce the relative priority given to agriculture-based
rural industrial and infrastructure development.
4.
The
debate therefore involves balancing an expanded operational role for
NCDC with the traditional developmental role of rural cooperatives.
Measures to Address the
Issues:
1.
Strengthen
Cooperative Federalism:
Promote regular Centre–State consultations to jointly review policies,
reforms and implementation concerning cooperatives.
2.
Ensure
Equitable Financing:
Monitor the distribution of NCDC financial assistance across States to
ensure fair and balanced access to credit.
3.
Maintain
Flexible Funding Channels:
Provide NCDC assistance either directly to eligible cooperatives or through
State Governments, depending on institutional requirements.
4.
Safeguard
Rural Priorities:
Continue giving adequate support to agriculture, farmer collectives, dairy,
fisheries, horticulture, storage, processing and rural infrastructure even
as NCDC expands its activities.
5.
Build
Cooperative Capacity:
Combine financial support with capacity building, business development and
market linkages to strengthen the long-term viability of cooperatives.
6.
Enhance
Transparency: Improve digital
monitoring and data-based oversight, including through the National
Cooperative Database, along with regular review involving States and relevant
stakeholders.
Source: THE HINDU - https://www.thehindu.com/news/national/farmers-body-terms-national-co-operative-development-corporation-act-anti-federal/article71385491.ece