Question map
With reference to 'National Investment and Infrastructure Fund', which of the following statements is/are correct ? 1. It is an organ of NITI Aayog. 2. It has a corpus of ₹ 4,00,000 crore at present. Select the correct answer using the code given below :
Explanation
The correct answer is option D - Neither 1 nor 2.
**Statement 1 is incorrect:** The NIIF is mandated to make long term investments in commercially viable Greenfield and Brownfield projects and has been registered with Securities and Exchange[1] Board of India as an Alternative Investment Fund. This indicates NIIF operates as an independent investment fund, not as an organ of NITI Aayog.
**Statement 2 is incorrect:** NIIF was proposed to have a corpus of Rs. 40,000 Crore where 49% or approximately Rs. 20,000 Crore would be contributed by the Government of India.[2] The proposed corpus was ₹40,000 crore, not ₹4,00,000 crore as stated in the question. Moreover, the fund was yet to receive any capital and become fully operational, and as per the Output-Outcome Framework for Schemes 2017-18, the financial outlay for NIIF at Rs.1,000 Crore was much lower compared to the expected government outlay that was envisaged at the time of its launch.[3] This confirms that by 2017, NIIF had not achieved even its proposed corpus of ₹40,000 crore, let alone ₹4,00,000 crore.
Sources- [1] https://www.niti.gov.in/sites/default/files/2021-08/India_ActionAgenda.pdf
- [2] https://www.niti.gov.in/sites/default/files/2021-08/India_ActionAgenda.pdf
- [3] https://www.niti.gov.in/sites/default/files/2021-08/India_ActionAgenda.pdf
PROVENANCE & STUDY PATTERN
Full viewA classic 'Flagship Initiative' check. UPSC tests two specific dimensions here: Administrative Parentage (Who controls it?) and Financial Magnitude (How big is it?). The question relies on swapping the parent body and inflating the corpus by a factor of 10.
This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.
- Describes NIIF as a fund announced in the Union Budget 2015-16 with a dedicated corpus and government contribution.
- States NIIF is mandated to make long-term investments and is registered with Securities and Exchange, indicating a separate fund/trust structure rather than an internal organ of NITI Aayog.
- Refers to the NIIF with an annual flow from the Government and describes it as a Trust.
- Explains the Trust can raise debt and invest as equity, indicating NIIF operates as an independent financial entity.
- Lists NIIF as 'National Investment and Infrastructure Fund' in the document's abbreviations, treating it as a distinct entity.
- Placement among other agencies/funds suggests NIIF is a separate institution referenced by NITI Aayog, not a unit of it.
Describes NIIF as an investor-owned fund manager, a trust created in 2015 and 'anchored by the GOI' rather than as a government department or agency.
A student can combine this with the general rule that 'organs' of a ministry/agency are usually statutory/attached offices to judge whether a trust/AIF fits that category.
States NIIF is formed as a trust, registered with SEBI as an Alternative Investment Fund and is a 'quasi-sovereign' fund with government holding 49%—implying separate legal/ownership structure.
Knowing that NITI Aayog's organs are government bodies/offices, a student can infer a SEBI-registered AIF/trust is likely not an internal organ of NITI Aayog.
Lists specific autonomous and attached bodies of NITI Aayog, illustrating the kinds of organisations that are formally 'under' or 'supported by' NITI Aayog.
A student can compare NIIF's absence from such lists (and its described legal form) to infer it is unlikely to be one of NITI Aayog's organs.
Notes NIIF's registration as an Alternative Investment Fund (AIF) and mentions commitments from multilateral banks—showing NIIF operates as an investment vehicle with external investors.
Given that organs of a policy think-tank would not normally be market-facing AIFs, a student could use this pattern to question the claim.
Explains NITI Aayog is a policy think-tank providing strategic and technical advice, indicating its primary role is policy rather than running sovereign investment funds.
A student can use the functional distinction (policy body vs investment fund) to judge whether NIIF fits the role of an 'organ' of NITI Aayog.
- Directly states the corpus proposed for NIIF as Rs. 40,000 Crore (i.e. ₹40,000 crore), not ₹4,00,000 crore.
- Specifies the government's expected share (~Rs. 20,000 Crore), showing the scale envisaged at launch.
- Notes that NIIF had not received capital and was not fully operational as of the relevant period, undermining any claim of a much larger corpus.
- Cites the 2017-18 Output-Outcome Framework showing a government financial outlay for NIIF of only Rs.1,000 Crore, far below Rs.4,00,000 crore.
Contains a 2017 MCQ that explicitly lists the proposition 'It has a corpus of ₹4,00,000 crore at present' as a statement to be judged (implying this claim was contested in 2017).
A student could treat this as an indicator that the ₹4,00,000 crore figure was notable enough to be questioned in 2017 and should be checked against official NIIF/GOI numbers from that year.
States NIIF was created in 2015 with an initial corpus of ₹40,000 crore, giving a concrete baseline figure soon after establishment.
Compare the 2015 initial corpus (₹40,000 crore) with the claimed 2017 corpus (₹4,00,000 crore) to judge plausibility and investigate whether such a tenfold increase by 2017 would be supported by documented capital infusions.
Describes NIIF's structure, funding sources (equity from overseas sovereigns, PSUs, market borrowings) and that it is quasi-sovereign with GOI holding 49%, outlining how its corpus could grow.
Use this funding-sources list to assess whether typical timelines and known investor commitments up to 2017 would plausibly produce a corpus as large as ₹4,00,000 crore.
Lists specific multilateral commitments (AIIB US$200m, ADB US$100m) to NIIF components in 2018/2020, showing actual documented external investments were in the hundreds of millions of dollars rather than tens of billions.
Convert these known dollar commitments to rupees and compare aggregate known commitments to the ₹4,00,000 crore claim to evaluate its realism.
- [THE VERDICT]: Sitter for serious aspirants. Derived from major 2015-16 Current Affairs (PIB/Budget).
- [THE CONCEPTUAL TRIGGER]: Investment Models & Infrastructure Financing (GS-3). Specifically, the shift from bank-led funding to AIF/Sovereign Wealth structures.
- [THE HORIZONTAL EXPANSION]: Memorize the 'Structure & Scale' of key financial bodies: NaBFID (Statutory, ₹1L Cr Auth Capital), NIP (₹111L Cr target, not corpus), ECGC (Capital infusion), and Bad Bank (NARCL). Know which are Statutory vs. Trusts/Companies.
- [THE STRATEGIC METACOGNITION]: When reading about a new body, fill a 3-column table: 1. Legal Status (Statutory/Executive/Trust), 2. Nodal Ministry (MoF vs NITI vs Commerce), 3. Seed Capital (The exact number).
References describe NIIF's creation, its registration as a trust/AIF and its investor-owned/quasi-sovereign ownership structure.
High-yield for questions distinguishing types of public financial institutions: knowing NIIF is a trust/SEBI-registered AIF and government holds minority stake helps answer institutional status questions and to contrast with statutory bodies. Connects to public finance, PSUs, and investment vehicle topics; useful for elimination in MCQs and short-answer explanations.
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 15: Infrastructure > National Investment and Infrastructure Fund > p. 441
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 14: Infrastructure and Investment Models > National Investment and Infrastructure Fund (NIIF) > p. 439
Evidence states NIIF's objective (attract domestic/international investment for infrastructure) and mentions initial corpus and multilateral commitments.
Important for syllabus areas on infrastructure financing and sovereign funds: helps link policy intent to instruments (equity, debt, fund-of-funds). Useful for mains answers on infrastructure financing models and for analyzing government facilitation vs control.
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 15: Infrastructure > National Investment and Infrastructure Fund > p. 441
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 15: Infrastructure > National Investment and Infrastructure Fund > p. 442
References explain NITI Aayog's non-statutory, policy-advice role and list autonomous/attached bodies under it.
Essential for questions on institutional architecture of governance: distinguishes policy bodies from statutory/operational agencies. Helps in comparing which organisations are 'organs' or 'attached/autonomous bodies' and frames answers on administrative structure and federal coordination.
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 7: Indian Economy after 2014 > 7.1 NITI Aayog > p. 227
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 6: Economic Planning in India > NITI AAYOG > p. 143
- Indian Polity, M. Laxmikanth(7th ed.) > Chapter 56: NITI Aayog > AUTONOMOUS AND ATTACHED BODIES > p. 470
Evidence explicitly records NIIF's creation in 2015 and its initial corpus amount, which directly contradicts the ₹4,00,000 crore claim.
High-yield for static polity/economy facts: UPSC often asks establishment year and seed corpus of major funds. Knowing the correct initial corpus helps spot false numeric options and compare scale with other funds; link this to questions on financing infrastructure and public investment.
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 15: Infrastructure > National Investment and Infrastructure Fund > p. 441
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 14: Infrastructure and Investment Models > National Investment and Infrastructure Fund (NIIF) > p. 439
References describe NIIF as a trust, quasi-sovereign wealth fund, registered as SEBI Category II AIF and government-anchored — key structural attributes.
Understanding form (trust, quasi-sovereign, AIF-II) helps answer questions on regulatory treatment, tax benefits, and governance differences between sovereign wealth funds, government funds, and private AIFs; useful for policy-analysis and comparative questions in GS papers.
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 14: Infrastructure and Investment Models > National Investment and Infrastructure Fund (NIIF) > p. 439
Evidence notes that NIIF attracts domestic and international investors and records ADB/AIIB commitments, illustrating funding channels and partner institutions.
Important for questions on infrastructure financing: shows how multilateral/bilateral and institutional capital flow into national funds. Helps in answering questions on public–private financing models and global financial institution roles in Indian infrastructure financing.
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 15: Infrastructure > National Investment and Infrastructure Fund > p. 441
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 15: Infrastructure > National Investment and Infrastructure Fund > p. 442
NaBFID (National Bank for Financing Infrastructure and Development). Unlike NIIF (which is a Trust/AIF), NaBFID is a statutory body established by an Act in 2021. Its authorized share capital is ₹1,00,000 crore.
The 'Magnitude Test': In 2017, India's total Union Budget was roughly ₹21.47 lakh crore. A single fund having a corpus of ₹4,00,000 crore (approx 20% of the entire national budget) is economically impossible. Eliminate Statement 2 immediately.
Mains GS-3 (Investment Models): NIIF represents the 'Financialization of Infrastructure'—moving away from bank-led project finance (which caused NPAs) to equity/quasi-equity models involving Sovereign Wealth Funds.