Tamil Nadu shows lack of interest in NCDC’s loan schemes- NSP NEWS

Tamil Nadu has displayed a perceptible lack of interest towards the loan scheme of the National Cooperative Development Corporation (NCDC), which provides the assistance for weaker-section programmes and other purposes. 

Since 2019-20, the State took loans to the extent of ₹106.15 crore. In fact, from 2023-24, it stopped drawing any loan from the NCDC, even though it received grants of  ₹5.78 crore in the two years. This was in contrast to the way its neighbours have approached the Corporation’s loan schemes. Andhra Pradesh had availed itself of ₹ 27,260.03 crore and Telangana, ₹38,252.79 crore.  After the formation  of the Union Ministry of Cooperation in 2021, the loan disbursal of the  NCDC rose rapidly. It went up from ₹24,733.24 crore in 2020-21 to ₹60,618.47 crore in 2023-24 which was about 2.5 times higher than in the past.

All these data and much more have been culled from the reply of Union Minister of Home Affairs and Cooperation, Amit Shah, to the CPI(M) Member of Parliament John Brittas (Kerala) a few days ago.  Under the heading of “weaker section programmes,” the NCDC sanctions loans for projects in the areas such as fisheries, Scheduled Castes/Scheduled Tribes/Hill Area cooperatives, dairy and livestock, poultry, women and labour cooperative bodies.  The period of loan will be up to eight years with a moratorium up to three years. Loans for margin money assistance and working capitals will have the maximum tenor of five and two years respectively. 

As per a communication of the NCDC sent to the States in March this year, the rate of interest in respect of loans, if applied through State governments,  for the weaker section programmes is 11.5%. In the event of direct funding, the rates are 11.8% (if the project cost up to ₹1 crore) and 11.92% (exceeding ₹1 crore). Likewise, for other programmes, the rates vary from 11.7% (through the State governments) to 11.97% (direct funding).  Similarly, for working capital loans, the rates are in the range of 8.87% to 9.91%

An official  in the Tamil Nadu government’s Cooperation Department observes that the NCDC’s rates of interest are “very high” with “many conditions.”  This is why the Corporation’s loans are considered “not attractive.”  In addition, on an average, the State gets loans at a rate of 7% to 8%.

However, the State’s engagement with the Corporation is operating at different levels. The Tamil Nadu Milk Cooperative Producers’ Federation, popularly known as Aavin has got a few live projects with NCDC assistance. Also, the Corporation’s representative is a functional director of the Board of Directors of every District Co-operative Milk Producers’  Union. There are 27 such unions in the State.  The Tamil Nadu State Apex Co-operative Bank has been a borrower of the NCDC’s loans.