2 weeks ago
Centre to Extend Infrastructure Viability Schemes Through FY31 with Changes
The government helps some infrastructure projects that may not earn enough money on their own.
It does this through two schemes called VGF and IIPDF.
The government plans to continue both schemes until the financial year 2030-31.
Most projects would keep receiving similar support.
However, hospitals and education projects may receive slightly less help than before.
These social projects had been eligible for support covering up to 80% of construction costs.
The government says the support should not make these projects almost fully government-funded.
It also wants to help states prepare more public-private partnership projects.
The Centre plans to extend the Viability Gap Funding and India Infrastructure Project Development Fund schemes through FY31.
Most sectors are expected to retain existing VGF support, while funding for social-sector PPPs may be reduced.
Economic-sector projects can receive VGF of up to 40% of capital expenditure, shared equally by the Centre and states.
Health and education projects can receive up to 80% of capital expenditure and 50% of operating costs for five years.
The government plans to offer states broader assistance for Project Management Units under the IIPDF Scheme.
- Who
- The Centre, state governments and public-private partnership project sponsors are involved.
- What
- The government plans to extend the Viability Gap Funding and India Infrastructure Project Development Fund schemes through FY31, with changes to their assistance.
- Where
- Across India, including projects undertaken by central ministries and state governments.
- When
- The extension is planned through FY31; a related PPP pipeline was launched in January 2026 for FY26–28.
- Why
- To support infrastructure projects that may not be commercially viable and to help prepare and execute more PPP projects.
Key facts
- Schemes
- Viability Gap Funding Scheme and India Infrastructure Project Development Fund Scheme
- Extension period
- Through FY31
- Economic-sector VGF
- Up to 40% of capital expenditure, with 20% from the Centre and 20% from states
- Social-sector VGF
- Health and education projects may receive up to 80% of capital expenditure and 50% of operating expenditure for five years after commercial operation begins
- VGF approvals
- 67 projects with a total cost of Rs 45,802 crore have received final approval
- VGF funding status
- Rs 7,682 crore approved and Rs 4,847 crore disbursed
- PPP pipeline
- 852 projects worth more than Rs 17 lakh crore were included in the FY26–28 pipeline
Quotes
an official
Government official
“The social‑sector VGF is too high. Hence, the VGF may be lowered a bit so that it does not look like an EPC (Engineering, Procurement and Construction) project, where governments fund the projects almost fully.”
financialexpress.com
Sources
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