RAS question
The National Investment Fund (NIF) was constituted to:
Correct answer: (B) Receive disinvestment proceeds of CPSEs.
The National Investment Fund was constituted to receive and channel the proceeds from disinvestment of Central Public Sector Enterprises.
Explanation
The National Investment Fund was created as the dedicated route for proceeds from CPSE disinvestment. The CCEA approved it on 27 January 2005, and its objectives, structure and administrative arrangements were notified in November 2005. The official DIPAM white paper reproduces the 23 November 2005 resolution, which states that proceeds from disinvestment of CPSEs would be channelised into the National Investment Fund, with the fund maintained outside the Consolidated Fund of India. The later January 2013 restructuring changed the handling of disinvestment proceeds by directing them to the Public Account under the NIF head for approved purposes, but it did not change NIF's link with CPSE disinvestment receipts.
Why the other options are wrong
- (A) Defence procurement is separate from NIF; the fund is tied to proceeds from CPSE disinvestment.
- (C) Agricultural subsidies are outside NIF's role, which was to receive and channel CPSE disinvestment proceeds.
- (D) NIF is not a state infrastructure lending mechanism; its official basis links it to disinvestment receipts from CPSEs.
Concept
Public finance and disinvestment form part of the Indian Economy syllabus. RAS frequently covers CPSE disinvestment, fund accounting and the treatment of receipts within fiscal policy and government asset management.