National Investment and Infrastructure Fund / NIIF: Overview

National Investment and Infrastructure Fund / NIIF: Overview

Question: Union Cabinet has recently approved the creation of the NIIF/National Investment and Infrastructure Fund. Provide an overview of NIIF.

- Union Cabinet has approved creation of an INR 20,000 crore National Investment and Infrastructure Fund

- This is a sovereign fund for infrastructure development including stalled projects

- Decision to establish this fund was taken with the aim to increase “economic impact” through infrastructure development in projects which are commercially viable

- This includes greenfield as well as brownfield projects

- This fund could consider funding projects of national importance in the manufacturing sector

- Initial authorised capital of NIIF is around INR 20,000 crore raised in a manner as decided by FM

- GoI will contribute 49% of the subscribed capital of NIIIF

- Fund would solicit equity participation from anchor partners of strategic importance

- Contribution of the government to the NIIF would enable it to be viewed as a sovereign fund

- It is expected to attract overseas sovereign/quasi sovereign/ multilateral/bilateral investors

- Fund was first proposed by FM Arun Jaitley in Budget 2015-2016

- Domestic pension and provident funds and national small saving fund may also finance NIIF

- NIIF will also utilise proceeds of monetised land and remaining assets of PSUs for infrastructure development

- Mandate of NIIF would include commercially viable as well as stalled projects

- Terms and periods of appointment of the governing council will be determined later

Facts and Stats

- Apart from the Centre, cash rich state owned companies will contribute to NIIF through special dividends

- Corpus of NIIF will be used for the purpose of raising debt and invested as equity in infrastructure finance firms such as National Housing Bank and Indian Railway Finance Corporation

- Not more than INR 5000 crore will be given to the NIIF per annum