Sections 63A and 63C explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Sections 63A and 63C, inserted by the 2023 Amendment Act, set up the Co-operative Rehabilitation, Reconstruction and Development Fund. Section 63A says who pays into it and how it is run. Section 63C says when a society that has paid in can ask for money out of it. Section 63B, on sick societies, is explained in a separate note. This article states the sections as per the Ministry of Cooperation copy of the Act read with the Multi-State Co-operative Societies (Amendment) Act, 2023.
The Central Government establishes the Fund. Each year, multi-State co-operative societies in profit for the preceding three financial years credit to it one crore rupees or one per cent. of their net profits, whichever is less. A Committee administers it. A society that has contributed for continuous five preceding financial years may apply for assistance for infrastructural requirement, but at least fifty per cent. of the requirement must be borne by the society and the Fund's share cannot exceed fifty per cent.
Where these sections come from
The 2023 Amendment Act (Act 11 of 2023) came into force on 3 August 2023 by notification S.O. 3493(E). Its section 24 inserted sections 63A, 63B and 63C after section 63. The principal copy had nothing like them. The sources end on 4 August 2023 and do not say whether the Fund has been established, whether the Committee has been constituted, or whether any society has contributed or received money; this article says nothing on those points either way. For the profit allocations that come first, see our note on disposal of net profits.
Section 63A(1): the Fund and the annual contribution
"The Central Government shall establish a Fund, to be called the Co-operative Rehabilitation, Reconstruction and Development Fund for revival of sick multi-State co-operative societies as referred to in section 63B and for development purposes in such manner as may be determined by it and there shall be credited to such Fund annually by multi-State co-operative societies which are in profit for the preceding three financial years one crore rupees or one per cent. of the net profits of such multi-State co-operative society, whichever is less."
Break it into its parts:
| Part | Text |
|---|---|
| Who establishes | The Central Government ("shall establish") |
| Name | Co-operative Rehabilitation, Reconstruction and Development Fund |
| Purposes | Revival of sick multi-State co-operative societies as referred to in section 63B, and development purposes |
| Manner | "in such manner as may be determined by it", that is, by the Central Government |
| Who pays | Multi-State co-operative societies "which are in profit for the preceding three financial years" |
| How much | "one crore rupees or one per cent. of the net profits of such multi-State co-operative society, whichever is less" |
| How often | "annually" |
Two points of reading. First, the amount is the lower of the two figures, so a society whose net profits are small pays one per cent of its net profits, and one with large net profits pays one crore rupees. Second, the phrase "in profit for the preceding three financial years" is the condition for paying; a society that has not earned a profit in each of the three years is outside it on the text. The Act does not say how "in profit" is measured, and does not say whether the contribution comes out of net profits before or after the transfers under section 63. We keep to the printed words.
Because the amount depends on the society's profit history, a society's finance team should record in advance whether it falls within the condition. If you are working this out for a particular society, our legal consultation team can help.
A failure to contribute has a direct consequence for the board: under section 43(2)(d) a person is not eligible for election to the board for five years if the board fails to make a contribution to the Fund established under section 63A. See our note on disqualifications for being a member of the board.
Section 63A(2) and (3): the Committee
Sub-section (2): "The Central Government shall, by notification, constitute a Committee, consisting of such members as it may deem fit, to administer the Fund, and maintain separate accounts and other relevant records in relation to the Fund in such form as may be specified by the Central Government in consultation with the Comptroller and Auditor-General of India."
Sub-section (3): "The Committee shall spend the money out of the Fund for carrying out the objects for which such Fund has been established."
So the Committee is constituted by notification, its members are whoever the Central Government deems fit, it keeps separate accounts and records in a form specified by the Central Government in consultation with the Comptroller and Auditor-General of India, and it may spend only for the Fund's objects. The Act gives no figure for the number of members.
Section 63C: financial assistance to societies
Sub-section (1): who may apply and how much
"The Central Government may, on an application made by a multi-State co-operative society which has contributed to the Fund for continuous five preceding financial years, grant such financial assistance as it may consider appropriate to the society out of the Fund for infrastructural requirement."
The proviso adds: "at least fifty per cent. of the total requirement shall be borne by the multi-State co-operative society and the financial assistance from the Fund shall not exceed more than the fifty per cent. of such requirement."
| Condition | Text |
|---|---|
| Applicant | A multi-State co-operative society |
| Eligibility | It "has contributed to the Fund for continuous five preceding financial years" |
| Purpose | "for infrastructural requirement" |
| Decision | The Central Government "may" grant "such financial assistance as it may consider appropriate" |
| Society's share | At least fifty per cent. of the total requirement |
| Fund's share | Not more than fifty per cent. of the requirement |
The grant is discretionary ("may"). A society that has paid for five continuous years has a right to apply but not a right to assistance. The "five preceding financial years" is a longer period than the "three financial years" in section 63A(1); the two are different tests, one for paying and one for applying.
Sub-section (2): the Committee's role
"The Committee constituted under sub-section (2) of section 63A shall examine and recommend to the Central Government for providing the financial assistance to the multi-State co-operative society to such extent and on such terms and conditions as it may consider necessary." The Committee examines and recommends; the Central Government decides.
The Fund also supports sick societies, which are dealt with under section 63B; see our note on rehabilitation and reconstruction of sick societies.
A practical example
Pragati Multi-State Co-operative Society has been in profit for three years in a row and has net profits of Rs 50 crore in the latest year. One per cent of that is Rs 50 lakh, which is less than one crore rupees, so the contribution is Rs 50 lakh. If the society pays into the Fund for five continuous years, it may apply under section 63C for assistance to build a warehouse costing Rs 8 crore. It must bear at least Rs 4 crore itself, and the Fund's share cannot exceed Rs 4 crore. The Committee examines the application and recommends; the Central Government decides.
What the 2023 Amendment Act changed
| Provision | Before | After |
|---|---|---|
| ss.63A, 63C | No such provisions | Inserted: the Fund, the annual contribution, the Committee, and assistance for infrastructural requirement |
Need help with Fund contributions or applications?
A society that must work out its contribution, or wants to prepare an application for assistance, should line up its profit history, its project cost and its share of the requirement. Our legal consultation team can help you read the sections against your accounts.
Key takeaways
- The Central Government establishes the Fund; the manner is as determined by it.
- Societies in profit for the preceding three financial years credit annually one crore rupees or one per cent. of net profits, whichever is less.
- A Committee constituted by notification administers the Fund and keeps separate accounts.
- A society that has contributed for continuous five preceding financial years may apply for assistance for infrastructural requirement.
- The society bears at least fifty per cent. of the requirement; the Fund's share cannot exceed fifty per cent.
Read next
- Rehabilitation and reconstruction of sick societies (section 63B)
- Disposal of net profits and the co-operative education fund (section 63)
- Investment of funds (section 64)
- Multi-State Co-operative Societies Act, 2002: complete guide
Disclaimer: Based on the Ministry of Cooperation copy of the Multi-State Co-operative Societies Act, 2002 read with the Multi-State Co-operative Societies (Amendment) Act, 2023 (in force from 3 August 2023), as consulted on 2 October 2026. The Multi-State Co-operative Societies Rules, 2002 as amended, later notifications and later amendments are not covered and should be checked. This article is general information, not legal advice; check the official text before acting.