िनवेश और लोक पिरसंपित्त प्रबंधन िवभाग, िवत्त मंत्रालय, भारत सरकार

Department of Investment and Public Asset Management, Ministry of Finance, Government of India

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National Investment Fund

Government had constituted the National Investment Fund (NIF) in November, 2005 into
which the proceeds from disinvestment of Central Public Sector Enterprises were to be
channelized. The corpus of NIF was to be of a permanent nature and NIF was to be
professionally managed to provide sustainable returns to the Government, without depleting
the corpus.Selected Public Sector Mutual Funds, namely UTI Asset Management Company
Ltd., SBI Funds Management Private Ltd. and LIC Mutual Fund Asset Management Company
Ltd. were entrusted with the management of the NIF corpus. As per this Scheme, 75% of the
annual income of the NIF was to be used for financing selected social sector schemes which
promote education, health and employment. The residual 25% of the annual income of NIF
was to be used to meet the capital investment requirements of profitable and revivable PSUs.

In view of the difficult economic situation caused by the global slowdown of 2008-09 and a
severe drought in 2009-10, Government approved a change in the policy for utilization of
disinvestment proceeds (5th of November 2009) by granting a one-time exemption to utilize
the disinvestment proceeds directly for selected Social Sector Schemes allocated by
Department of Expenditure/ Planning Commission. This exemption was to be operational for
the period April 2009-March 2012. In view of the persistent difficult condition of the
economy, the exemption from channelizing the disinvestment proceeds in the NIF was further
extended by another year i.e. from April 2012 to March 2013

In order to align the NIF with the disinvestment Policy, Government decided (17th January
2013) that the disinvestment proceeds, with effect from the fiscal year 2013-14, will be
credited to the existing NIF which is a 'Public Account' under the Government Accounts and
the funds would remain there until withdrawn/invested for the approved purposes. It was
also simultaneously decided that the NIF would be utilized for the following purposes:

1. Subscribing to the shares being issued by the CPSE on rights basis so as to ensure that
51% ownership of the Government in CPSEs is not diluted.
2. Preferential allotment of shares of the CPSE to promoters as per SEBI (Issue of Capital
and Disclosure Requirements) Regulations, 2009 so that Government shareholding
does not go down below 51% in all cases where the CPSEs desire to raise fresh equity to
meet their Capex programme.
3. Recapitalization of public sector banks and public sector insurance companies so as to
strengthen them by further capital infusion towards achieving the Basel III norms.

The Government further approved inclusion of the following purposes also, to be financed
from the NIF (21st February, 2013).

1. Investment by Government in RRBs/IIFCL/NABARD/Exim Bank.

2. Equity infusion in various Metro projects.
3. Investment in Bhartiya Nabhikiya Vidyut Nigam Limited and Uranium Corporation of
India Ltd.
4. Investment in Indian Railways towards capital expenditure.

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िनवेश और लोक पिरसंपित्त प्रबंधन िवभाग

Department of Investment and Public Asset Management

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