National Infrastructure and Investment Fund

The government is considering an ‘outcome-linked’ payment package as part of incentives for the recruitment of a chief executive of India’s first sovereign wealth fund, the National Investment and Infrastructure Fund (NIIF).

• However, negotiations on the incentive payment, which will be paid for every $10 billion the fund succeeds in raising, are still on.

Background:

The Cabinet had given its approval in July for setting up NIIF. The Finance Ministry, in October 2015, constituted a search-cum-selection committee for selecting a chief executive. The governing council of the fund, chaired by Finance Minister Arun Jaitley, had decided to complete the selection process by January-end.
About NIIF:

National Infrastructure and Investment Fund (NIIF) was set up as a trust with a corpus of Rs 20,000 crore.

• The Fund aims to attract investment from both domestic and international sources.
• The government’s contribution would be limited to 49% of the subscribed capital.
• The government will seek participation from strategic investors such as sovereign fund, quasi sovereign funds and multilateral or bilateral investors, which can help leverage this fund to many times.
• Cash-rich PSUs, pension funds, provident funds, National Small Saving Fund will be able to pick up stake in the fund.
• The objective of NIIF is to maximize economic impact mainly through infrastructure development in commercially viable projects, both greenfield and brownfield, including stalled projects, NIIF would solicit equity participation from strategic anchor partners.
• Sovereign funds and pension funds from a number of countries, including the U.K., UAE, Russia and Singapore, have already expressed interest in investing in NIIF. India and the UAE signed a pact to mobilise up to $75 billion long-term investment.