Viability Gap Funding for infrastructure project

Q.  Which of the following statements is/are correct about Viability Gap Funding (VGF)?

1. It provides support to infrastructure projects that are economically justified but fall short of financial viability.
2. It is administered by Ministry of Road Transport and Highways.

- Published on 02 Nov 15

a. Only 1
b. Only 2
c. Both
d. None

ANSWER: Only 1
 
- VGF is administered by the Ministry of Finance with suitable budgetary provisions to be made in the Annual Plans on a year-to- year basis.
- The amount of VGF will be equivalent to the lowest bid for capital subsidy, but subject to a maximum of 20% of the total project cost.
- In case the sponsoring Ministry/State Government/ statutory entity propose to provide any assistance over and above the said VGF, it will be restricted to a further 20% of the total project cost.

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