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Govt nod for operationalisation of NIF

Government on Thursday cleared the proposal for operationalization of the National Investment Fund (NIF) and paved way for using 75 per cent of its income to finance social sector projects while leaving rest 25 per cent for reiviving Central PSUs.

PTI|
Nov 03, 2005, 03.00 PM IST
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NEW DELHI: Government on Thursday cleared the proposal for operationalization of the National Investment Fund (NIF) and paved way for using 75 per cent of its income to finance social sector projects while leaving rest 25 per cent for reiviving Central PSUs.

"The Union Cabinet has given its approval to the General Scheme for Operationalization of the NIF, creation of a post of Chief Executive Officer for it and constitution of a three- member part-time Advisory Board," Information and Broadcasting Minister S Jaipal Reddy told newspersons after a Cabinet meeting chaired by Prime Minister Manmohan Singh.

He said 75 per cent of the annual income from the NIF would be used to finance selected social sector schemes as identified from time to time by the Department of Expenditure. The residual 25 per cent of the annual income would be used to meet the capital investment requirements of profitable and revivable Central Public Sector Enterprises, Reddy added.

"The proceeds from disinvestment of CPSEs are to be channelised into the NIF, which is to be maintained outside the Consolidated Fund of India. The NIF, which is to be professionally managed to provide sustainable returns to the Government, without depleting the corpus," the Minister added.

The public sector mutual funds will be entrusted with the management of the corpus of the NIF, he said.

The income from the NIF would be used for financing specific schemes for investment in social sector projects which promote education, health and employment and for capital investment in selected profitable and revivable CPSEs that yield adequate returns, in order to enlarge the capital base to finance expansion and diversification, he said.
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