Atmanirbhar Bharat Package: Government Notifies VGF Scheme To Support Infrastructure Projects


Ministry of Finance notifies an updated VGF (Viability Gap Funding) scheme on December 11, this was done as part of Atmanirbhar Bharat Package to support Infrastructure projects exclusively.

The VGF scheme will be called as Scheme for Financial Support to Public Private Partnerships (PPPs) in infrastructure, will come under effect immediately, and will be administered under ministry of Finance.

As per VGF scheme, (EC) Empowered committee headed by economic affairs secretary will approve projects requiring under Rs. 200 crores, and projects requiring more than Rs. 200 crore will be sanctioned by EC with finance ministers approval, PTI reported.

Other members of EC include CEO of NITI Aayog, expenditure secretary, line ministry’s secretary dealing with respective subject and joint secretary in the Department of Economic Affairs as member secretary.

The projects under this scheme can be implemented by private sector company, which will be selected by government or respective statuary entity via open competitive bidding.

The scheme make an additional exclusion for social sector projects such as water & sanitation, solid waste management and related as follows, the amount of VGF shall be equivalent to lowest bid for capita; grant subject to maximum 30 per cent of total project cost, while other eligible projects VGF shall be equivalent to bid for capital grant subject to maximum 20 per cent of total project cost.

The VGF scheme is put forth with an outlay of Rs. 8,100 crore, which will lend support to various infrastructure projects, financially, aimed at increasing private investment in infrastructure.