Business
The fund could also consider funding nationally important projects in the manufacturing sector.
Updated : Mar 20, 2018, 03:50 AM IST
The Union Cabinet on Wednesday approved creation of a Rs 20,000-crore National Investment and Infrastructure Fund (NIIF), a sort of sovereign fund, for development of infrastructure projects, including the stalled ones.
The decision to set up the fund was taken at the meeting of the Cabinet headed by Prime Minister Narendra Modi, sources said.
The NIIF, sources said, is being established with an aim to maximise "economic impact" mainly through infrastructure development in commercially viable projects, both green field and brown field, "including stalled projects".
The fund could also consider funding nationally important projects in the manufacturing sector.
The initial authorised capital of NIIF would be Rs 20,000 crore, which will be raised from time to as decided by the Finance Minister.
The government would contribute 49% of the subscribed capital of NIIF.
The Fund would also solicit equity participation from strategic anchor partners.
"The contribution of the government to the NIIF would enable it to be seen virtually as a sovereign fund and is expected to attract overseas sovereign/quasi sovereign/ multi-lateral/bilateral investors to co-invest in it," sources said.
The Fund was proposed by Finance Minister Arun Jaitley in his Budget 2015-16.
Sources further said domestic pension and provident funds and national small saving fund may also provide funds to NIIF.
NIIF may utilise the proceeds of the monetised land and other assets of Public Sector Undertakings (PSUs) for infrastructure developments.