Viability Gap Fund

• VGF is a government’s initiative to assist private investors or entities to set up projects of high economic worth
• Private investors are not interested in building infrastructure as financial return is less so government extends its support to the investors by sharing a fraction of the cost, making the project viable.
• Typically, VGF is provided in competitively bid projects. The central government meets up to 20% of capital cost of a project being implemented in Public Private Partnership (PPP) mode by a central ministry, state government, statutory entity or a local body. The state government, sponsoring ministry or the project authority can provide another 20% to attract .
• Those needing the least VGF assistance will be awarded the project. The Ministry of Finance administers the scheme. 
• Projects in a number of sectors such as roads, ports, airports, railways, inland waterways, urban transport, power, water supply, other physical infrastructure in urban areas, infrastructure projects in special eco-nomic zones, tourism infrastructure projects are generally eligible for VGF. 
• The Viability Gap Funding Scheme provides financial support in the form of grants, one time or deferred, to infrastructure projects undertaken through public private partnerships with a view to make them commercially viable. GoI has established a Viability Gap Fund to aid the PPP infrastructure projects which face the viability gap due to inherent nature of the project. 

National Investment Fund

• NIF was established in 2005 to channelize the proceeds generated through the sale of minority shareholding of CPSEs(Central Public Sector Enterprise). The Fund would be maintained outside the Consolidated Fund of India.
• Government  sells part of its shares in the market, and get ca$h. (it is called Disinvestment)
• Government puts that cash in this NIF, instead of the consolidated fund of India.
• The income from the Fund is to be used for the following broad investment objectives:
• 75% to finance selected social sector schemes, which promote education, health and employment
• 25% to meet the capital investment requirements of profitable and revivable CPSEs that yield adequate returns, in order to enlarge their capital base to finance expansion/diversification
• However, because of the difficult economic situation caused by global slowdown, the government in November 2009 decided to utilize proceeds from disinvestment only for social sector spending. This exemption is applicable till March 2013.
• NIF fund managers are:
• UTI Asset Management Company Ltd.
• SBI Funds Management Company (Pvt.) Ltd.
• LIC Mutual Fund Asset Management Company Ltd.
• No approval is required to get money out of this fund.