UPSC Current – Cabinet approves revamped VGF scheme with outlay of ₹8,100 crore
Cabinet approves revamped VGF scheme with an outlay of ₹8,100 crore
Why in News?
The government on Wednesday approved the revamped viability gap funding (VGF) scheme envisaging a total outlay of ₹8,100 crore for encouraging investment in social as well as economic infrastructure projects.
The Cabinet Committee on Economic Affairs has approved the continuation and revamping of the scheme for financial support to public-private partnerships (PPPs) in infrastructure VGF scheme till 2024-25, Information and Broadcasting Minister Prakash Javadekar told.
What is Viability Gap Funding (VGF) ?
It signifies a grant, one-time or deferred, provided to support infrastructure projects that are economically justified but fall short of financial viability. The lack of financial viability usually arises from long gestation periods and the inability to increase user charges to commercial levels.
The revamped VGF scheme will attract more PPP projects and facilitate private investment in the social sectors (health, education, wastewater, solid waste management, and water supply, among others).
The creation of new hospitals and schools will create many opportunities to boost employment generation, according to an official release.