Question

Q. Consider the following statements in reference to Viability Gap Funding

Which of the statements given above is/are correct?

• A. 1 and 3 only
• B. 2 and 3 only
• C. 3 only
• D. 1, 2 and 3

Answer 1

The correct option is A 1 and 3 only

Explanation:

• Statement 1 is correct: Viability Gap Funding (VGF) means a grant one-time or deferred, provided to support infrastructure projects that are economically justified but fall short of financial viability. Commercial unviability often arises due to large capital investment requirements, long gestation periods, and the inability to increase user charges to commercial levels.
• Statement 2 is incorrect: The Department of Economic Affairs, Ministry of Finance introduced "the Scheme for Financial Support to PPPs in Infrastructure" (Viability Gap Funding Scheme) in 2006 with a view to support infrastructure projects undertaken through PPP mode.
• Statement 3 is correct: The Cabinet Committee on Economic Affairs chaired by Prime Minister Shri Narendra Modi has approved the continuation and Revamping of the Scheme for Financial Support to Public-Private Partnerships (PPPs) in Infrastructure Viability Gap Funding (VGF) Scheme till 2024-25 with a total outlay of Rs. 8,100 cr. It has two sub-schemes for mainstreaming private participation in social infrastructures such as Waste Water Treatment, Water Supply, Solid Waste Management, Health, and Education sectors.