Investments are considered as one of the most important factors of economic growth. This is so because it can majorly affect the production of goods and services by investing capital in technology, research and development.Such an increase in capital goods like machinery or infrastructure leads to an increase in capital accumulation of the nation that further leads to higher production and ultimately an increase in the economy.Therefore, an increase in investments contributes to the increase in GDP. In order for the economy to boost multi-dimensionally, it is essential that firstly, a person (natural or artificial) is encouraged to invest and secondly, such an investment is made in order to holistically improve the economic situation of the nation. Therefore, it stands as a duty on the part of the Government that appropriate regulatory legislations are introduced with that respect. Such legislations should intend to address factors like stability, mitigation of risk capital, flexibility in terms of procedure and compliance along with a wide variety of options to invest, including socially desirable sectors like venture capitals (start-ups), SMEs, social ventures, etc. In this paper, a veritable attempt is made to assess and analyze the developing concept of Alternative Investment Funds (AIF), its legal framework, and implications of AIF Regulations, 2021 in India.