The National Investment and Infrastructure Fund has been established as a fund of funds. What are the government objectives in such structure? Discuss while elucidating the composition, functions and role to be played by NIIF in Infrastructure.
The objective of NIIF is to maximise economic impact through infrastructure development in viable projects both greenfield and brownfield, including stalled projects, mainly in the core infra sector.
NIIF has been structured as a fund of funds and set up as Category II Alternate Investment Fund (AIF) under the Securities and Exchange Board of India (SEBI) Regulations. Total corpus of the fund is Rs. 40000 Crore. The government will invest Rs.20,000 crores into it from budget while the remaining Rs. 20,000 crores are expected to come from private investors.
NIIF is a fund of funds. This implies that there would be multiple alternative investment funds underneath the main fund. Examples of such funds include stressed-assets fund, renewable energy fund, brownfield projects fund etc. NIIF has been set up as a Trust registered under the Indian Trust Act. The activities of NIIF will be overseen by a Governing Council, which is to be headed by Finance Minister and which has been formed to oversee the activities of NIIF.
The mandate of the Council is approval of guidelines for investment of Trust property/Corpus of NIIF and parameters for appointment and performance of investment managers/ advisors.
Further, India Infrastructure Finance Company Limited (IIFCL) has been appointed as the investment advisor to NIIF for a six-month period, while IDBI Capital Market Services has been selected as advisor to NIIF Trustee for a period of one year.
NIIF will raise funds from investors and markets and would invest the same in companies, institutions and infrastructure projects. It will also provide advisory services.
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