The monies in the National Investment Fund can be used for __:
1. Recapitalization of public sector banks
2. Purchasing the shares of CPSEs
3. Towards operating expenses of Indian Railways
4. Social Overheads such as building schools, toilets etc.
Select the correct option from the codes given below:

Answer: [D] Only 1 & 2

On 27th January, 2005 the Government decided to constitute a “National Investment Fund” (NIF) into which the realisation from sale of  minority shareholding of the Government in profitable CPSEs would be channelized. The Fund would be maintained outside the Consolidated  Fund of India. The income from the Fund would be used for the following broad investment objectives: investment in social sector projects  which promote education, health and employment. Capital Investment in selected profitable and revivable Public Sector Enterprises that yield  adequate returns in order to enlarge their capital base to finance expansion/diversification.

In view of difficult economic situation caused by the global slowdown of 2008-09 and a severe drought that was likely to adversely affect the  11th Plan growth performance, Government, in November, 2009, decided to give one time exemption for utilization of proceeds from  disinvestment of CPSEs for a period of three years – from April, 2009 to March, 2013. Disinvestment proceeds during this period would be  available in full for investment in specific social sector schemes decided by Planning Commission/Department of Expenditure.

The Government on 17 January, 2013 and 21 February, 2013 approved restructuring of the NIF and decided that the disinvestment proceeds  with effect from the fiscal year 2013-14 will be credited to the existing ‘Public Account’ under the head NIF and they would remain there until  withdrawn/invested for the approved purpose.

The approved purposes include recapitalization of public sector banks and insurance  companies, subscribing to shares issued by CPSEs, investment in Indian Railways towards capital expenditure, etc. Specifically an amount  of over Rs. 15,000 crore realised as disinvestment proceeds during 2013-14 went towards meeting capital expenditure of Ministry of Railways.

This question is a part of GKToday's Integrated IAS General Studies Module