National Renewal Fund
The Government of India had announced to establish a National Renewal Fund (NRF) as a part of the slew of measures announced in New Industrial Policy of 1991. The Fund was later established in February, 1992 for a period of 10 years.
Objectives of National Renewal Fund
The main objective of the National Renewal Fund was to provide a social safety net to the workers who are likely to be affected by technological up-gradation and modernisation in the Indian industry. The objectives of were to be achieved as follows:
- By providing assistance to firms to cover the costs of retraining and redeployment of employees arising as a result of modernisation and technological upgradation of existing capacities and from Industrial restructuring.
- By providing funds for compensation to employees affected by restructuring or closure of industrial units, both in the public and private sectors.
- By providing funds for employment generation schemes in the organised and unorganised sectors in order to provide a social safety net for labour.
The government included two schemes under this fund viz. Voluntary Retirement Scheme (VRS) for central public sector undertakings; and re-training scheme for rationalised workers in organised sector.
The National Renewal Fund was abolished by the government in 2000 and administration of the VRS scheme was shifted to Department of Public Enterprises (DPE), instead of DIPP from fiscal year 2001-02.
Why NRF was abolished?
The reason for abolishing NRF was that most of the payments under this was made for VRS and this fund did not server adequately the purpose of retraining and rehabilitation. Further, private sector was also listed as one of the beneficiaries of the NRF, but later it was felt that this fund should deal exclusively with the public sector units only.