"That (NIF) architecture needs to be either partially or fully demolished," the sources said.
The NIF was set up to assuage the feelings of allies in the previous UPA regime, who were opposed to disinvestment. It was set up in 2005 so that proceeds from disinvestment does not go to the government kitty but to a separate entity.
Only returns earned through the funds parked in NIF could be used and not the corpus itself. The sources said the need for restructuring arose not so much to channelise the proceeds from disinvestment to the government kitty, but to see that the corpus is used and not just returns on investment from the fund.
In the current scheme of things, 75 per cent of the annual income from investment of NIF are used to finance selected social sector programmes, while the remaining is deployed to meet the capital investment requirements of profitable and revivable public sector units.
Three mutual funds, UTI MF, SBI MF and Jeevan Bima Sahyog are the fund managers of NIF. The fund has so far received Rs 994.82 crore (Rs 9.94 billion) from the sale of government equity in the Power Grid.
The government has announced its intent to divest its holding in public sector units in favour of the people, without diluting its stake below 51 per cent.
