- Infrastructure and related issues.
What to study?
For Prelims: Particulars of NIIF and funds under NIIF.
For Mains: Significance of NIIF and the need for Infrastructure funding.
Context: National Highways Authority of India (NHAI) Signs MoU with National Investment and Infrastructure Fund (NIIF) for funding highway projects.
The government had set up the ₹40,000 crore NIIF in 2015 as an investment vehicle for funding commercially viable greenfield, brownfield and stalled infrastructure projects.
The Indian government is investing 49% and the rest of the corpus is to be raised from third-party investors such as sovereign wealth funds, insurance and pension funds, endowments, etc.
NIIF’s mandate includes investing in areas such as energy, transportation, housing, water, waste management and other infrastructure-related sectors in India.
NIIF currently manages three funds each with its distinctive investment mandate. The funds are registered as Alternative Investment Fund (AIF) with the Securities and Exchange Board of India (SEBI).
The three funds are:
Master Fund: The Master Fund is an infrastructure fund with the objective of primarily investing in operating assets in the core infrastructure sectors such as roads, ports, airports, power etc.
Fund of Funds: Fund of Funds anchor and/or invest in funds managed by fund managers who have good track records in infrastructure and associated sectors in India. Some of the sectors of focus include Green Infrastructure, Mid-Income & Affordable Housing, Infrastructure services and allied sectors.
Strategic Investment Fund: Strategic Investment Fund is registered as an Alternative Investment Fund II under SEBI in India. The objective of “Strategic Fund” is to invest largely in equity and equity-linked instruments. The Strategic Fund will focus on green field and brown field investments in the core infrastructure sectors.
Mains Question: Discuss the significance of National Investment and Infrastructure Fund (NIIF) and the need for Infrastructure funding in India.