The Union Government is mulling to extend the viability gap funding (VGF)
scheme for the PPP projects in health, education and transmission of
electricity. This is part of the measures to channelise more funds to
infrastructure sectors.
A suggestion that while VGF is only given for capital expenditure, the same
for social sectors should be extended not only as capital, but also as a
recurring amount on an annuity basis, has been welcomed.
VGF is a subsidy extended by the Union Government to private infrastructure
developers for those projects that need some funding to make the project
commercially viable. The sectors where VGF is extended include highways, ports,
railways, power and urban transport.