- Started in 2005
- Proceeds from disinvestment of Central Public Sector Enterprises were to be channelized in NIF
- The corpus of the fund was to be of permanent nature and the same was to be professionally managed in order to provide sustainable returns to the Government, without depleting the corpus.
- NIF was to be maintained outside the Consolidated Fund of India
- Selected Public Sector Mutual Funds will be entrusted with the management of the corpus of the Fund
- Earlier, 75% of the annual income of the Fund will be used to finance selected social sector schemes, which promote education, health and employment. The residual 25% of the annual income of the Fund will be used to meet the capital investment requirements of profitable and revivable CPSEs that yield adequate returns, in order to enlarge their capital base to finance expansion/ diversification
- In 2013, these restrictions were relaxed as follows:
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- Disinvestment proceeds would go into “Public Account”
- NIF now could be used for following purposes:
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- Purchasing shares of CPSE to maintain 51% ownership
- Recapitalisation of PSBs
- Investment by Government in RRBs/IIFCL/NABARD/Exim Bank
- Equity infusion in Metro projects
- Investment in Bhartiya Nabhikiya Vidyut Nigam Limited and Uranium Corporation of India Ltd
- Investment in Railways towards capital expenditure