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Q55 (IAS/2017) Economy › Industry, Infrastructure & Investment › Development finance institutions Official Key

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 :

Result
Your answer: —  ·  Correct: D
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. [1] https://www.niti.gov.in/sites/default/files/2021-08/India_ActionAgenda.pdf
  2. [2] https://www.niti.gov.in/sites/default/files/2021-08/India_ActionAgenda.pdf
  3. [3] https://www.niti.gov.in/sites/default/files/2021-08/India_ActionAgenda.pdf
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Q. With reference to 'National Investment and Infrastructure Fund', which of the following statements is/are correct ? 1. It is an organ of …
At a glance
Origin: Mostly Current Affairs Fairness: Low / Borderline fairness Books / CA: 0/10 · 10/10
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A 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.

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
Is the National Investment and Infrastructure Fund (NIIF) an organ of NITI Aayog?
Origin: Web / Current Affairs Fairness: CA heavy Web-answerable

Web source
Presence: 5/5
"The NIIF is mandated to make long term investments in commercially viable Greenfield and Brownfield projects and has been registered with Securities and Exchange"
Why this source?
  • 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.
Web source
Presence: 5/5
"National Investment and Infrastructure Fund (NIIF) with an annual flow of Rs.20,000 crore from the Government. This will enable the Trust to raise debt, which in turn, could be invested as equity in infrastructure finance companies;"
Why this source?
  • 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.
Web source
Presence: 3/5
"NIIF National Investment and Infrastructure Fund"
Why this source?
  • 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.

Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 15: Infrastructure > National Investment and Infrastructure Fund > p. 441
Strength: 5/5
“• National Investment and Infrastructure Fund (NIIF) was created in 2015 to attract investment from both domestic and international sources.• It is India's first-ever sovereign wealth fund with an initial corpus of ₹40,000 crore. ۰• NIIF is an investor-owned fund manager, anchored by the GOI in collaboration \bulletwith global and domestic institutional investors, and is used as an alternative source of funds for long-term capital investment in infrastructure development projects.”
Why relevant

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.

How to extend

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.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 14: Infrastructure and Investment Models > National Investment and Infrastructure Fund (NIIF) > p. 439
Strength: 5/5
“Government established NIIF in 2015 with the aim to attract investment from both domestic and international sources for funding commercially viable Greenfield, Brownfield and stalled projects in infrastructure sector. NIIF has been formed as a trust and is registered with SEBI under Category II of Alternative Investment Fund (for tax benefit). It is basically a quasi-sovereign wealth fund as government holds only 49% ownership. NIIF will get funds from: • Overseas sovereign/quasi-sovereign/ multilateral/bilateral investors through equity. Cash rich central PSU, provident funds, insurance funds can also invest in NIIF over and above Govt. of India share.• Market borrowings (debt). NIIF will invest in: • Infrastructure projects through equity and debt both; and• Non-Banking Financial Companies (NBFCs) and Financial Institutions (FIs) involved in infrastructure financing through equity.”
Why relevant

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.

How to extend

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.

Indian Polity, M. Laxmikanth(7th ed.) > Chapter 56: NITI Aayog > AUTONOMOUS AND ATTACHED BODIES > p. 470
Strength: 4/5
“t AUTONOMOUS AND ATTACHED BODIES The NITI Aayog is supported by a n autonomous body i.e., the National Institute of Labor Economics Research and Development, and an attached office i.e., the Development Monitoring and Evaluation Organisation. These are explained below: I. National Institute of Labour Economics Research and Development The National Institute of Labour Economics Research and Development (NI LERD) was formerly known as the Institute of Applied Manpower Research (IAMR). It is a central autonomous organization under the NITI Aayog. Its primary objectives are research, data collection, education and training in all aspects of human capital planning, human resource development, and monitoring and evaluation.”
Why relevant

Lists specific autonomous and attached bodies of NITI Aayog, illustrating the kinds of organisations that are formally 'under' or 'supported by' NITI Aayog.

How to extend

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.

Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 15: Infrastructure > National Investment and Infrastructure Fund > p. 442
Strength: 4/5
“15.6 Indian Economy • Strategic Fund registered as an Alternative Investment Fund II under SEBI in 3. India. The objective is to invest largely in equity and equity-linked instruments.• In March 2020, Asian Development Bank (ADB) committed to invest US$ 100 million equivalent into the Fund of Funds component of NIIF.• Earlier in 2018, Asian Infrastructure Investment Bank (AIIB) had also committed \bulletUS$ 200 million for NHF.”
Why relevant

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.

How to extend

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.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 7: Indian Economy after 2014 > 7.1 NITI Aayog > p. 227
Strength: 4/5
“Government of India, in keeping with its reform agenda, constituted the NITI Aayog to replace the Planning Commission. This was done in order to better serve the needs and aspirations of the people of India. An important evolutionary change from the past, NITI Aayog acts as the quintessential platform for the Government of India to bring states to act together in national interest, and thereby fosters cooperative federalism. National Institution for Transforming India, also known as NITI Aayog, was formed via a resolution of the Union Cabinet on 1 January 2015. NITI Aayog is the premier policy think tank of the Government of India, providing directional and policy inputs.”
Why relevant

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.

How to extend

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.

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