Centre raises viability gap funding for social infra projects

Union Finance Minister Nirmala Sitharaman on Saturday introduced a hike in viability gap funding (VGF) for improvement of social infrastructure. In her fourth tranche of financial stimulus, she mentioned Rs 8,100 crore will likely be supplied as viability gap funding for improvement of social infrastructure.

She mentioned social infrastructure projects undergo from poor viability. Therefore, the federal government will improve the quantum of viability gap funding as much as 30 per cent every of the full venture price as VGF by central and state/statutory our bodies.

For different sectors, present VGF help of 20 per cent every from the federal government and state/statutory our bodies shall proceed.

The projects will likely be proposed by the Central Ministries and state authorities/ statutory entities.

In her fourth press convention in as many days, she mentioned the main focus of the fourth stimulus could be coal, minerals, defence manufacturing, civil aviation sector, energy distribution firms in Union Territories, house sector and atomic power sector.

She mentioned steps taken throughout the current previous embody quick monitor funding clearance via an empowered group of secretaries. Project improvement cell has been arrange in every ministry to arrange investable projects and coordinate with buyers and central/state authorities.

States are being ranked on funding attractiveness to compete for new investments, she mentioned including incentive schemes for the promotion of recent champion sectors will likely be launched in sectors similar to photo voltaic PV manufacturing and superior cell battery storage.

As many as 3,376 industrial elements/estates/SEZs in 5 lakh hectares have been mapped on Industrial Information System (IIS). All industrial parks will likely be ranked in 2020-21, she mentioned.

Earlier this week, Prime Minister Narendra Modi introduced a cumulative bundle of Rs 20 lakh crore, practically 10 per cent of GDP, to offer aid to varied segments of the economic system battered by the nationwide lockdown within the wake of the coronavirus pandemic.

While this included March 27 announcement of Rs 1.7 lakh crore bundle of free foodgrain and money to poor for three months and RBI’s Rs 5.6 lakh crore value of financial coverage since March, the federal government in three tranches over the past three days introduced a cumulative bundle of Rs 10.73 lakh crore.

The measures introduced have largely been about liquidity with negligible additional finances spending. The three tranches supplied for a wide range of steps for small companies, avenue distributors, farmers and poor migrants in addition to shadow banks and electrical energy distributors, however they’ve largely been both credit score assure schemes or new fund creations to be shouldered by banks and monetary establishments.

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