VGF Scheme Reshaping India's Future

What is VGF Scheme

VGF Scheme stands for Viability Gap Funding Scheme. It's a program run by the Indian government to support infrastructure projects that are considered beneficial but struggle to be financially viable on their own.


Aims to bridge the gap between the economic viability and commercial viability of infrastructure projects.

Projects Funded

Supports projects in social and economic sectors like water supply, sanitation, waste management, education, and healthcare.

Funding Mechanism

Provides financial support in the form of grants (one-time or disbursed over time) to make these projects commercially attractive for private companies.


– Projects must be undertaken through Public-Private Partnerships (PPP) with private participation selected through competitive bidding. – Projects must be economically justified but commercially unviable without the grant.

Key Points

– The maximum VGF funding can be up to 20% of the project cost, with the possibility of additional grants up to another 20% depending on the project. – The scheme has been revamped to offer higher VGF support for social sectors (up to 60%) and pilot projects in health and education (up to 80%). – It is administered by the Department of Economic Affairs, Ministry of Finance.