Finance Minister Nirmala Sitharaman revealed new incentives for primary cooperative societies in the Budget proposals for 2026-27. These incentives include allowing deductions for the supply of cattle feed and cotton seed produced by members of these societies, aiming to lessen the tax burden. Additionally, the proposal extends the deduction to cover a broader range of cooperative societies beyond those engaged in supplying milk, oilseeds, fruits, or vegetables grown by their members.
Sitharaman also suggested permitting inter-cooperative society dividend income as a deduction under the new tax regime, provided it is further distributed to its members. Furthermore, to support National Cooperative Federations, she proposed a three-year tax exemption on dividend income received by a notified national cooperative federation for investments made in companies up to January 31, 2026. This exemption applies only to dividends distributed to member cooperatives.
Moreover, the National Cooperative Development Corporation (NCDC) has shown significant growth by disbursing Rs 49,799.06 crore to various cooperatives nationwide from April to October 2025 in the current financial year. As a statutory organization under the Ministry of Cooperation, the NCDC has consistently supported India’s cooperative ecosystem through financial assistance. The corporation’s disbursements have notably increased from Rs 5,735.51 crore in 2014-15 to Rs 95,182.88 crore in 2024-25, indicating its expanding presence across sectors.
During the fiscal years 2021-22 to 2024-25, a total of Rs 4,823.68 crore was disbursed to women cooperatives, enhancing women’s involvement in the cooperative sector. As of March 2025, the NCDC has provided Rs 33,311.79 crore in financial aid to cooperative sugar mills nationwide. Noteworthy cooperative models supported by the NCDC include the Gujarat State Cooperative Marketing Federation Limited, the Lahoul Potato Growers Cooperative Society in Himachal Pradesh, the Jharkhand Women’s Self-Supporting Poultry Cooperative Federation, and the Vitthalrao Shinde Sahakari Sakhar Karkhana in Maharashtra, showcasing the strength and reach of India’s cooperative movement.
