The Central Government has widened the purview of viability gap funding (VGF) scheme.
The government has extended the VGF to projects of many sectors including irrigation, terminal markets, oil and gas storage facilities. The scheme allows a private player to invest, develop and operate a government infrastructure project. The scheme is applicable to infrastructure projects undertaken on PPP basis. Under VGF scheme, the government invites bids from companies by keeping the subsidy sought as the bid parameter. The bidders who seek minimum subsidy - also called viability gap fund - are given the rights to build and operate the infrastructure. The rights to operate are usually given out for a pre-determined concession period.