Saturday October 6, 06:48 PM
NIF to fund sick PSUs
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By Agencies
The government launched a National Investment Fund (NIF), made up of money from sale of equity in state-run companies, to finance social sector schemes and revive sick central public sector units. The Fund, with an initial corpus of Rs 994.82 crore generated from Power Grid Corporation's IPO, would be managed by UTI Asset Management Company and asset management arms of the State Bank of India and the Life Insurance Corporation. Launching NIF, Finance Minister P Chidambaram handed over a cheque for the sum of Rs 994.82 crore to the three AMCs. While UTI AMC and SBI Funds Management were given Rs 368.91 crore each to manage, LIC Mutual Fund was handed over the remaining Rs 257 crore. NIF will be operated by these fund managers under discretionary mode of the Portfolio Management Scheme, which is governed by SEBI guidelines. The three largest public sector fund managers have been appointed to manage NIF for two years, extendable on the basis of their performance subsequently. All proceeds from disinvestment of central PSUs will be channelised into NIF. The fund will be maintained outside the Consolidated Fund of India and is to be professionally managed to provide sustainable returns to the government, without depleting the corpus. As much as 75 per cent of the annual income of the Fund will be used to finance select social sector schemes which promote education, health and employment. The residual 25 per cent of the annual income will be used to meet the capital investment requirements of profitable and revivable CPSEs.
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