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Parliamentary panel suggests key changes to NCDC amendment bill

01 Apr 2013 Evaluate

To ensure that the agri-business firms do not misuse funds of National Cooperative Development Corporation (NCDC) in the clutch of producer companies, a Parliamentary panel has suggested the government for changes in NCDC amendment bill, which aims to treat producer companies at par with cooperative societies for availing financial help from the NCDC

As per the panel, ‘the NCDC Act 1962 and the rules and guidelines framed there under should be so modified as to ensure that the funds of NCDC do not land into the hands of undeserving because in that eventuality the very purpose of setting up of the corporation will be defeated’ panel recommended.

The panel also suggested to make provisions for protecting the interest of marginalized section as the formation of a producer company is a voluntary process and no law or mechanism exists at present to safeguard them from negative impact of companies, which are profit driven.

The panel committee has hit the government for an inordinate delay in bringing amendments to the NCDC Act 1962 saying that the proposed legislation to amend NCDC Act has been mooting for 10 years later in 2012. The concept of producer companies was formalized through an amendment in Companies Act, 1956 in 2002.

The NCDC advances loans and subsidies to state governments for financing cooperative societies and for employment of staff for implementing programmes of cooperative development. Corporate and agri-business firms use the NCDC funds for agri-business. Further, regarding the NCDC funding to non-farm sectors, the panel said ‘NCDC should channelize its energy and attention towards farm related portfolio, rather than frittering away their resources for services other than agriculture.’ 

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