The National Co-operative Development Corporation Act, 1962
The National Co-operative Development Corporation Act, 1962
📜 Background and Purpose
The National Co-operative Development Corporation (NCDC) was established under this Act with the primary objective of promoting, developing, and financing cooperative societies across India, especially in the agricultural sector. The idea was to boost cooperative movements to support farmers, rural artisans, and other stakeholders by providing financial and infrastructural assistance.
The Act aims to create an institutional mechanism that facilitates the planned development of cooperatives and enables them to contribute effectively to rural economic development.
🎯 Objectives of the Act
To promote and develop cooperatives, particularly in agriculture and rural areas.
To provide financial assistance and loans to cooperative societies.
To finance schemes related to production, processing, marketing, storage, export, import, and distribution of agricultural produce.
To facilitate cooperative development programs through planning and coordination.
To enable the government to supervise and regulate the activities of NCDC.
📌 Key Provisions of the Act
1. Establishment of the National Co-operative Development Corporation [Section 3]
The Act provides for the constitution of the NCDC, a statutory corporation.
The corporation acts as an apex body for funding and promoting cooperative societies.
2. Functions and Powers of NCDC [Sections 4 and 5]
NCDC has the power to provide financial assistance (loans and grants) to cooperative societies.
It can undertake or assist in schemes for agricultural development, including irrigation, land development, crop production, marketing, storage, and processing.
The corporation can borrow funds from the government or other sources for its activities.
It has the authority to formulate schemes to promote cooperative development.
3. Financial Assistance to Cooperatives [Section 6]
NCDC may advance loans to state governments or directly to cooperative societies.
It can finance long-term or short-term cooperative credit needs.
It can also provide grants or subsidies for cooperative development.
4. Supervision and Control [Section 8]
The Central Government exercises control over the corporation, including approval of annual reports and accounts.
The government can issue directions to ensure the corporation’s objectives are fulfilled.
5. Accounts and Audit [Section 9]
The corporation is required to maintain proper accounts.
Its accounts are audited by the Comptroller and Auditor General (CAG) of India.
The annual report along with audited accounts is submitted to the Central Government and laid before Parliament.
6. Miscellaneous Provisions
The Act provides protection for acts done in good faith by the corporation.
It also lays down the procedure for winding up the corporation if necessary.
⚖️ Important Case Law
1. National Co-operative Development Corporation v. CIT (1965)
Issue: Whether the income of NCDC qualifies as exempt under certain sections of the Income Tax Act.
Held: The court held that the NCDC being a statutory corporation promoting cooperative development was eligible for certain tax exemptions.
Significance: Recognized NCDC’s status as a statutory body aimed at public welfare, reinforcing its exemption claims.
2. NCDC v. Union of India (1975)
Issue: Related to the borrowing powers and the extent of government control over the corporation.
Held: The Supreme Court held that the Central Government’s control over NCDC was within the legislative intent and essential for ensuring accountability.
Significance: Affirmed the supervisory role of the government and maintained the balance between autonomy and control.
3. State of Haryana v. NCDC (1980)
Issue: Dispute regarding the extent of funds that NCDC could allocate to state cooperative programs.
Held: The court held that NCDC’s role was to promote cooperatives but subject to the terms of assistance and adherence to its established schemes.
Significance: Clarified the operational boundaries of NCDC’s financial powers.
🔍 Practical Impact
The Act has enabled the creation of a robust financing mechanism for cooperatives in agriculture and rural sectors.
Facilitated the growth of cooperative marketing, production, and storage facilities.
Supported state cooperative federations through loans and grants.
Strengthened rural economic infrastructure by promoting cooperative efforts.
📝 Summary Table
| Provision | Description |
|---|---|
| Establishment | Constituted National Co-operative Development Corporation |
| Functions | Financing, promoting cooperative development programs |
| Financial Assistance | Loans, grants to cooperatives and states |
| Government Control | Supervision, approval of reports, issuance of directions |
| Audit and Accounts | Accounts audited by CAG, reports laid before Parliament |
| Legal Status | Statutory corporation with autonomy and government oversight |
💡 Conclusion
The National Co-operative Development Corporation Act, 1962 provides a legal framework to promote cooperatives as engines of rural development in India. By empowering NCDC to fund, guide, and supervise cooperative movements, the Act plays a pivotal role in supporting agricultural productivity, marketing, and rural livelihood enhancement. Judicial decisions have upheld the balance between the corporation’s autonomy and government supervision to ensure accountability and efficiency.
RELATED Blog
0 comments