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Government launches Viability Gap Funding (VGF) Scheme to boost India’s Infrastructure

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Govt notifies VGF scheme to support infra projectsOn 11th December, 2020 Finance Ministry notified the Viability Gap Funding (VGF) scheme to provide financial support to Public Private Partnerships (PPPs) in selected Infrastructure projects. The selection of Private companies will be done through transparent, open and competitive bidding process.

About Viability Gap Funding (VGF)Scheme:

Aim- To assist infrastructure projects under Public Private Partnership (PPPs) in India through financial support.

Fund Sanction

Upto Rs 200 crore- Sanctioned by the Empowered Committee (EC) headed by Economic affairs secretary (Present Economic Affairs Secretary is Shri Tarun Bajaj).

Over Rs 200 crore- Approved by Empowered Committee with Finance Minister’s(Presently – Nirmala Sitharaman) approval

Members of Empowered Committee- CEO of NITI Aayog (Present – Amitabh Kant), Expenditure Secretary(Present – T. V. Somanathan), and Joint secretary of Department of Economic Affairs.

VGF amount will be upto 30% of the total project cost for social sector projects like water supply, solid waste management.

VGF will be upto 20% of the total project cost for other eligible projects.

About Finance Ministry:

Minister of Finance- Nirmala Sitharaman
Finance Secretary- Ajay Bhushan Pandey

Union Budget of India will get released annually on 1st February.

Recent Related News:

i.On November 4, 2020, the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Shri Narendra Modi has approved the investment of Rs.1810.56 crore for 210 MW Luhri Stage-I Hydro Electric Project located on river Satluj situated in Shimla & Kullu districts of Himachal Pradesh (HP).

ii.On April 29, 2020, the task force on National Infrastructure Pipeline (NIP) chaired by economic affairs secretary Atanu Chakraborty submitted its Final Report on NIP for FY 2019-25 to Finance Minister Nirmala Sitharaman, projecting total infrastructure investment of Rs 111 lakh crore during a 5-year span of FY 2019-20 to FY 2024-25.