| With reference to the National Investment Fund to which the disinvestment proceeds are routed, consider the following statements; |
| 1. The assets in the National Investment Fund are managed by the Union Ministry of Finance. |
| 2. The National Investment Fund is to be maintained within the Consolidated Fund of India. |
| 3. Certain Asset Management Companies are appointed as the fund managers |
| 4. A certain proportion of annual income is used for financing select social sectors. Which of the statements given above is/are correct? |
A) 1 and 2
B) 2 only
C) 3 and 4 only
D) 3 only
Correct Answer: C
Solution :
[c] The Government of India constituted the National Investment Fund (NIF) on 3rd November, 2005, into which the proceeds from disinvestment of Central Public Sector Enterprises were to be channelized. The corpus of the fund was to be of permanent nature and the same was to be professionally managed in order to provide sustainable returns to the Government, without depleting the corpus. NIF was to be maintained outside the Consolidated Fund of India. The NIF was initialized with the disinvestment proceeds of two CPSEs namely PGCIL and REC, amounting to Rs. 1814.45 crore. The proceeds from disinvestment of CPSEs will be channelised into the National Investment Fund which is to be maintained outside the Consolidated Fund of India. The corpus of the National Investment Fund will be of a permanent nature. The Fund will be professionally managed to provide sustainable returns to the Government, without depleting the corpus. Selected Public Sector Mutual Funds will be entrusted with the management of the corpus of the Fund 75% of the annual income of the Fund will be used to finance selected social sector schemes, which promote education, health and employment. The residual 25% of the annual income of the Fund will be used to meet the capital investment requirements of profitable and revivable CPSEs that yield adequate returns, in order to enlarge their capital base to finance expansion/ diversification. The NIF corpus was thus managed by three Public Sector Fund Managers. The income from the NIF corpus investments was utilized on selected social sector schemes, namely the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), Accelerated Irrigation Benefits Programme (AIBP), Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY), Accelerated Power Development and Reform Programme, Indira Awas Yojana and National Rural Employment Guarantee Scheme (NREGS).
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