PIB – 11th Nov 2020

Cabinet approves Continuation and Revamping of the Scheme for Financial Support to Public Private Partnerships in Infrastructure Viability Gap Funding VGF Scheme

  • The Department of Economic Affairs, Ministry of Finance introduced “the Scheme for Financial Support to PPPs in Infrastructure” (Viability Gap Funding Scheme) in 2006 with a view to support infrastructure projects undertaken through PPP mode that are economically justified but commercially unviable due to large capital investment requirements, long gestation periods and the inability to increase user charges to commercial levels.
  • Benefits:
  • The aim of the scheme is to promote PPPs in social and Economic Infrastructure leading to efficient creation of assets and ensuring their proper Operation and Maintenance and make the economically/socially essential projects commercially viable. The scheme would be beneficial to the public at large as it would help in creation of the Infrastructure for the country.
  • Implementation Strategy:
  • The new Scheme will come into force within one month of the approval of the Cabinet. Proposed amendments under the revamped VGF scheme would be suitably incorporated in the Guidelines for the Scheme. All steps will be taken up for the promotion of the revamped VGF and in monitoring of the supported projects.
  • Impact:
  • Revamping of the proposed VGF Scheme will attract more PPP projects and facilitate private investment in the social sectors (Health, Education, Waste Water, Solid Waste Management, Water Supply etc.). Creation of new hospitals, schools will create many opportunities to boost employment generation.

Government sets up Inter-Ministerial Committee to strengthen the Capital Goods Sector

  • The government has set up a 22-member inter-ministerial committee in strengthening the Capital Goods(CG) Sector through interventions that help the CG Sector in contributing more actively in the national goal of achieving a USD 5 trillion economy and a USD 1 trillion manufacturing sector.
  • The committee will work out ways and means to make the capital goods sector globally competitive and to become the manufacturing hub for the world.
  • Initiatives in the Capital Goods Sector require in depth consultations and deliberations with all concerned Ministries / Departments on regular basis. It is in this light proposed an Inter-Ministerial Committee (IMC) is being constituted with representation from all the concerned Ministries / Departments dealing with the CG sector and using CG machinery to regularly meet and deliberate to address the issues and bottleneck pertaining to the sector. The IMC will help DHI in taking a holistic view for all the issues pertaining to the CG Sector.
  • The Committee will look into all such issues pertaining to the Capital Goods Sector including technology development, mother technology development, global value chains, testing, skill training, global standards, reciprocity issues, custom duties to make this sector globally competitive and to become the manufacturing hub for the world. Any other relevant issue pertaining to the Capital Goods sector may also be brought before the Committee with the prior approval of the Chairman.