Because India is an agrarian country, dairy farming is an important source of livelihood for the rural population. The National Dairy Development Board (NDDB) has promoted the dairy industry in our country under the rules of the National Dairy Development Board (NDDB) Act of 1987.
The NDDB was founded in 1965, in Anand, Gujarat to develop dairy farming in India. The NDDB has improved the living conditions of dairy farmers and given the public a supply of high-quality dairy products to satisfy the demands of a large population. Such dairy farming activities were previously performed by cooperative societies.
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The NDDB Act, 1987
The NDDB Act, 1987, got assent on 15 September 1987, and has a total of 50 Sections and 7 Chapters. This act gives recognition to the institution known as the National Dairy Development Board (NDDB) in Gujarat, which is a statutory body. The Act helped NDDB in getting a legal status, and it has also transferred the functions of the Indian Dairy Corporation to the NDDB so that effectiveness is maintained.
Initially, the NDDB was a society under the Societies Registration Act, of 1860, and was used for implementing cooperative strategies in Gujarat for the economic development of rural communities and improving the standard of life through cooperative efforts.
The Indian Dairy Corporation and the NDDB had common objectives. Subsequently, the assets and functions of the Indian Dairy Corporation were transferred to the NDDB.
Incorporation of the NDDB under the Act
Section 4 of The NDDB Act 1987 details the incorporation of the NDDB as a legal entity. As a corporate body, the NDDB will have a permanent existence and also a common seal. NDDB will have the authority to acquire, possess, transfer the property, enter into contracts, and engage in legal proceedings in its name.
The headquarters of the NDDB is in Anand, Gujarat, and it has the discretion to set up additional offices and branches both inside and outside of India.
Vesting of undertakings of Indian Dairy Corporation under the Act
Section 5 of The NDDB Act 1987 stated that all the assets and functions of the Indian Dairy Corporation were to be transferred to the NDDB from the designated day.
Effect of the incorporation of NDDB
Section 6 of The NDDB Act 1987 states the following:
- All assets, both movable and immovable that are owned by or given to society and the Indian Dairy Corporation (that is a dissolved company), will become the property of the NDDB.
- All the rights, debts, liabilities, interests, privileges, and obligations previously under the society and the dissolved company, will be transferred to the NDDB.
- All debts, liabilities, obligations, contracts, and all actions done by or on behalf of the dissolved company, will be considered as if they were done by or on behalf of the NDDB.
- All sums of money due to the society and the dissolved company will now be due toward the NDDB before the designated day.
- Any subsidiary organisation that was under the control of the society and the dissolved company, will now be under the control of the NDDB.
- The NDDB will provide financial, managerial, or technical assistance to any organisation that was previously receiving the same from the society or the dissolved company. The NDDB will determine the duration, extent, and manner of this assistance as it sees fit.
- The capital amount of the dissolved company will become part of the funds of the NDDB.
Management of the NDDB and Composition of its Board of Directors
Section 8 of The National Dairy Development Board Act 1987 states that all supervision, direction, control, and management of the National Dairy Development Board will be done by the Board of Directors.
The Board of Directors of the National Dairy Development Board will be composed of the following members:
- A Chairman
- One Director is chosen among the Central Government officials who will be appointed by the Central Government. This Director should possess professional qualifications, such as relevant degrees in dairying, animal husbandry, rural economics, rural development, business administration, or banking.
- Two directors chosen among the Chairmen of State Co-operative Dairy Federations are nominated by the Central Government after consulting with the Chairman.
- Three whole-time directors will be chosen among the highest-ranking executives of the NDDB and will be nominated by the Central Government after consultation with the Chairman.
- One Director, who is an expert and is selected from outside the NDDB, will be nominated by the Central Government after consultation with the Chairman.
- The Board can involve any individual for seeking their assistance or advice as per this Act. Such an individual can participate in relevant discussions of the Board but will not have the right to vote.
Powers and functions of the NDDB as per the Act
Section 16 of The NDDB Act 1987 states the following:
- The NDDB has the power of planning, promoting, and organising nationwide programs for the development of dairy, agriculture-related industries, and biologicals. NDDB also has the power to enhance the cooperative strategy’s effectiveness. The Board can implement certain measures required to achieve these purposes.
- The board’s functions are supporting research and promotion in areas such as dairying, immunology, animal husbandry, agriculture, and horticulture.
- Providing technological expertise to cooperative or public sector organisations, which are involved in milk and milk product production, procurement, preservation, or marketing.
- If before the designated day, either the society or the dissolved company was involved in activities related to nondairy products, the NDDB can engage in the same activities and will have the same powers and functions.
- If the Central Government or a State Government believes that certain additional activities can be assigned to the Board as they are beneficial for the NDDB’s expertise and public needs, then they can assign such activities.
NDDB fund under the Act
Section 26 of The NDDB Act 1987 states that there will be a NDDB Fund, which will be maintained by the same board. This fund will include sums given by the government, the fees received by the Board, and other sources.
All the funds in this NDDB account will be deposited in the State Bank of India or another nationalised bank. This fund will be used to cover administrative expenses and any costs related to the Board’s functions, responsibilities, or activities specified in Section 16.
Power to remove difficulties under the Act
Section 49 of The National Dairy Development Board Act, 1987, states that if any challenges or issues arise during implementation of this Act, then the Central Government can issue orders within 5 years through official publication to address these difficulties.
These orders should not contradict the Act’s provisions, and every order made under this section must be presented to both Houses of Parliament.
The NDDB will play a significant role in the dairy industry if it focuses on enhancing dairy production, processing, and marketing with a focus on sustainability, quality, and efficiency. The NDDB can use technology and data-driven approaches for improving dairy farmers’ access to markets, supply chain management, and farming practices. The NDDB can also perform certain activities to promote customer preferences and mitigate fluctuations in the market by giving a wide range of good-quality dairy products. Organisations such as Amul are good examples of the cooperative model in dairy production. The Act can include certain changes such as providing better financial assistance and a market for people indulging in the dairy industry through Cooperative Societies.
Is Mother Dairy a subsidiary unit of the NDDB?
Section 42 of The NDDB Act, 1987, states that the Mother Dairy in Delhi will become a subsidiary of the NDDB and can maintain a distinct identity as per the Boards conditions.
What is the obligation to fidelity and secrecy?
Section 35 of the NDDB Act, 1987, states that the Board is prohibited from disclosing any information about the NDDB, the society, or the dissolved company. This can be done under the law or financial industry practices. Every person has to make a declaration of maintaining confidentiality before assuming their responsibilities.
What is the process of audit for the NDDB?
Section 28 of the NDDB Act, 1987, states that the NDDB’s accounts will be audited by auditors qualified to audit companies under the Companies Act. Auditors will have reasonable access to the Board's books, accounts, and documents, and will provide their audit report to the Board, which will then send a copy of the report to the Central Government.
What are the primary objectives of the NDDB as per this Act?
The primary objectives of NDDB are to promote, plan, and organise programs for the development of dairy and allied industries and improve the socio-economic conditions of dairy farmers.
What will be the procedure for meetings of the board as per the Act?
Section 10 of the NDDB Act, 1987, states that the Board meeting will convene at the NDDB's head office or any other office as directed by the Chairman. The Chairman or a director chosen by the present directors will chair the meeting.