In News:

The Ministry of Micro, Small, and Medium Enterprises (MoMSME), in collaboration with the Open Network for Digital Commerce (ONDC), has launched the Trade Enablement and Marketing (TEAM) Initiative. It aims to promote digital commerce among micro and small enterprises (MSEs) in India.

Key Features of TEAM Initiative

• Scheme Under: Raising and Accelerating MSME Productivity (RAMP) Programme
  • RAMP is a World Bank-supported Central Sector Scheme implemented from 2022–2027 to enhance market access, technology upgradation, and financial inclusion for MSMEs.
• Objective:
  • To empower MSEs through digital commerce integration using ONDC.
  • To formalize operations, reduce the cost of doing business, and expand market access.
  • To ensure inclusivity with 50% of beneficiaries being women-led enterprises.
• Budget & Duration:
  • ?277.35 crore over three years (FY 2024–25 to FY 2026–27).
• Target Beneficiaries:
  • 5 lakh MSEs (50% women-led).
  • Eligibility: Registered MSEs in manufacturing or service sectors with valid Udyam Registration. Medium enterprises are excluded from most benefits.
• Implementing Agency:
  • National Small Industries Corporation (NSIC)

Operational Strategy

• ONDC Integration: MSMEs will be onboarded onto the ONDC network, enabling them to operate digital storefronts with access to interoperable platforms, seamless payment solutions, and logistics services.
• Workshops & Outreach:
  • Over 150 workshops will be organized across Tier 2 and Tier 3 cities, especially targeting SC/ST-led and women-led enterprises.
  • Workshops will provide training on creating digital catalogues, understanding digital platforms, and maximizing ONDC's benefits.
• Supportive Infrastructure: A dedicated digital portal will offer services including workshop registration, access to finance, grievance redressal, catalogue tools, and account management assistance.
• Financial Assistance: Support to Seller Network Participants for onboarding MSEs and assisting in operational and digital transition needs.

About ONDC:

An initiative of the DPIIT, Ministry of Commerce, ONDC is an open, interoperable network that allows buyers and sellers to transact across multiple digital platforms, aiming to democratize digital commerce and reduce platform monopolies.

In News:

The Union Cabinet has launched the National Critical Mineral Mission (NCMM) with a total outlay of ?34,300 crore over seven years, including ?16,300 crore government expenditure and ?18,000 crore investment from PSUs and private players.

Key Highlights:

Objectives of NCMM

• Reduce import dependence on critical minerals vital for clean energy, electronics, defence, and high-tech industries.
• Promote domestic exploration, mining, processing, and recycling of critical minerals.
• Facilitate overseas acquisition of mineral assets.
• Strengthen India’s mineral security and ensure self-reliance (Atmanirbhar Bharat).

Key Features

• Value Chain Coverage: Exploration → Mining → Beneficiation → Processing → Recycling of end-of-life products.
• Fast-track regulatory approvals for mining projects.
• Creation of mineral processing parks and promotion of sustainable extraction technologies.
• Establishing a strategic stockpile of critical minerals.
• Development of a Centre of Excellence on Critical Minerals to support R&D.
• Expansion of PRISM initiative to fund startups and MSMEs in the sector.
• Whole-of-government approach: Collaboration among ministries, PSUs, private sector, and research institutions.

Why Critical Minerals Matter

Critical minerals are essential inputs for:

• Green energy: EV batteries, solar panels, wind turbines.
• Electronics: Semiconductors, fiber optics.
• Defence: Aircraft, missile guidance systems.
• Medical technologies: MRI machines, pacemakers.

India’s clean energy transition and manufacturing competitiveness hinge on a steady and secure supply of these minerals.

India’s Import Dependence

India is dependent on imports, especially from China, for several critical minerals like lithium, cobalt, titanium, graphite, and tellurium. This exposes India to supply chain vulnerabilities amid shifting global geopolitics.

List of 30 Critical Minerals for India

Includes: Lithium, Cobalt, Nickel, Graphite, Rare Earth Elements (REEs), Beryllium, Titanium, Tungsten, Gallium, Indium, Selenium, Cadmium, etc.

Strategic and Legislative Initiatives

• Amendment to MMDR Act (1957) in 2023: Enabled auction of 24 critical mineral blocks.
• OAMDR Act (2002) amendment: Introduced transparent offshore mineral exploration.
• Duty waivers in Union Budget 2024–25: Customs duties removed on key critical minerals to promote domestic processing.
• Exploration by GSI: 368 projects in last 3 years; 227 more planned for FY 2025–26.
• KABIL: Acquired 15,703 ha in Argentina for lithium mining.

Global Context

• Global powers (US, EU, Japan) are pursuing strategies for critical mineral security.
• China dominates refining of lithium, cobalt, and REEs.
• India is part of the Minerals Security Partnership (MSP) to diversify global mineral supply chains.

Significance for India

• Ensures long-term resource security for clean technologies.
• Supports EV and renewable energy manufacturing goals.
• Enhances strategic autonomy in defence and electronics.
• Makes India an attractive hub for foreign investment in green technologies.

Challenges and the Way Forward

• Geopolitical risks in overseas asset acquisition.
• Environmental impacts of large-scale mining.
• Need for strong R&D ecosystem, financial incentives, and public-private partnerships.
• Sustainable mining practices and global collaboration are essential for long-term success.

In News:

Contract farming has emerged as a significant model in India's agricultural landscape, especially with its success in processed potato cultivation and the recent rise in French fry exports. As the country transitions from being an importer to a major exporter in sectors like frozen French fries, the contract farming model underpins the structural transformation of Indian agriculture.

Understanding Contract Farming

Contract farming is an agricultural production system where farmers and buyers (agribusinesses, processors, exporters, or retailers) enter into a pre-harvest agreement. This contract outlines key parameters including price, quality, quantity, delivery schedules, and in many cases, input provision and technical assistance.

Types of Contract Farming Arrangements

• Direct Input Provision by the Company: Firms supply seeds, fertilizers, and support services, deducting costs from the final payment to farmers.
• Partnership with Local Input Dealers: A hybrid model balancing company control with third-party services, chosen based on crop complexity, local support availability, and firm capabilities.

Advantages of Contract Farming

• Stable and Enhanced Income: Contracts assure farmers of a fixed price and market access, shielding them from volatile markets. RBI data shows farmers typically receive only 31%–43% of consumer prices; contract farming can significantly improve this share.
• Access to Inputs and Technology: Companies provide high-quality seeds, fertilizers, training, and modern farming practices, leading to improved yields and quality.
• Post-Harvest Efficiency: Streamlined procurement reduces wastage of perishables and post-harvest losses, ensuring efficient supply chain management.
• Credit and Financial Support: Assured incomes help farmers access institutional credit, reducing dependency on informal lenders.
• Food Safety and Export Standards: Training on pesticide use and residue limits ensures compliance with international standards like Maximum Residue Limits (MRLs), boosting export potential.
• Consumer Benefits: Direct procurement reduces intermediaries, enabling competitive pricing and higher quality products.
• Technology Transfer: Farmers benefit from the introduction of new, high-efficiency production techniques.

Concerns and Challenges

• Power Imbalance: Small and marginal farmers often lack bargaining power. This dependency may lead to exploitative contracts or one-sided terms, especially where firms demand investments in crop-specific infrastructure.
• Market Risk and Default: Price volatility can lead to side-selling by farmers or contract breaches by firms when market prices crash.
• Delayed Payments and Inputs: Contractual delays in payment or input delivery can severely affect crop cycles and farmer finances.
• Exclusion of Marginal Farmers: For economies of scale, firms often prefer large landholders, sidelining smallholders.
• Environmental Impact: Monocropping, overuse of water and agrochemicals, and soil degradation threaten long-term sustainability.
• Food Security Trade-offs: A shift to high-value crops under contracts may reduce acreage for food crops, impacting local food security.
• Loss of Autonomy: Farmers may lose control over farming decisions, with firms determining most aspects of cultivation, leading to indirect control over land use.

Case Study: Contract Farming in Potato Sector

India is the second-largest potato producer globally, with Uttar Pradesh, West Bengal, and Bihar as leading states. The Central Potato Research Institute (CPRI), Shimla developed several high-yielding Kufri varieties to support commercial cultivation.

The success of processed potato farming is best illustrated by India’s emergence as an exporter of frozen French fries, driven by contract-based procurement from farmers. However, issues such as the PepsiCo vs. Indian farmers legal dispute over unauthorized cultivation of the FL 2027 variety underline ongoing concerns around intellectual property rights and farmers’ autonomy.

Policy and Legal Framework

• Model APMC Act, 2003: Introduced contract registration, dispute resolution, and exempted market fees while protecting land ownership.
• Model Agricultural Produce and Livestock Contract Farming Act, 2018: Proposed institutional frameworks, insurance provisions, and promotion of Farmer Producer Organizations (FPOs).
• e-NAM Integration: Supports transparent pricing and contract enforcement.
• National Agriculture Policy: Endorses contract farming as a tool for enhancing productivity and rural incomes.

In News:

India is actively exploring the creation of a Bharat Sovereign Wealth Fund (BSWF) or The Bharat Fund (TBF) to harness the untapped wealth embedded within its public sector ecosystem. This fund aims to unlock and strategically manage dormant capital, estimated at ?40 lakh crore ($450–500 billion), primarily held in equity stakes of around 80 listed public sector enterprises (PSEs) and banks.

What is a Sovereign Wealth Fund (SWF)?

A Sovereign Wealth Fund is a state-owned investment vehicle that manages national savings or surplus revenues—often derived from foreign exchange reserves, natural resource exports, or trade surpluses.

According to the Santiago Principles (2008), SWFs:

• Are owned by the general government (central or sub-national),
• Invest primarily in foreign financial assets, and
• Aim to achieve financial objectives rather than monetary policy.

Types of SWFs include:

• Stabilization Funds: Cushion fiscal shocks from revenue volatility.
• Future Generation Funds: Preserve wealth for long-term national benefit.
• Strategic Development Funds: Support priority sectors and national growth.
• Reserve Investment Funds: Enhance returns on foreign currency reserves.

Examples include:

• Norway’s Government Pension Fund Global ($1.7 trillion),
• China Investment Corporation ($1.35 trillion),
• Abu Dhabi Investment Authority ($993 billion).

India’s SWF Landscape and the BSWF Proposal

India previously explored SWF models in 2007–08 and again in 2010–11. While the National Investment and Infrastructure Fund (NIIF) was launched in 2015, it remains sector-specific and limited in scale. The proposed BSWF envisions a comprehensive and transformational fund akin to global best practices.

Key features of the BSWF proposal:

• Consolidation of government equity in PSEs and PSU banks under a professionally managed umbrella.
• Strategic divestment—e.g., reducing government stake from 51% to 40%—without losing operational control.
• Leveraging this pooled equity to attract global co-investors, potentially unlocking tens or hundreds of billions in foreign capital.

Why India Needs the Bharat SWF

• Wealth Unlocking: Potential monetization of over ?40 lakh crore in dormant government equity assets.
• Fiscal Prudence: Even a modest 2% annual divestment could yield $10+ billion, narrowing the fiscal deficit from 4.9% to ~4.6% of GDP.
• Strategic Sector Investment: Deployment into high-potential sectors—AI, semiconductors, electric vehicles, hydrogen energy, biotechnology—to drive innovation and economic leadership.
• Attracting Global Capital: Enhanced investor confidence, especially from established SWFs like those of Singapore, Norway, and Abu Dhabi, which are already increasing exposure in Indian equities and infrastructure.
• Social Sector Funding: Generate non-debt financial resources for welfare programs and national development missions.
• Soft Power Projection: Fund ventures, disaster relief, and advocacy efforts, strengthening India’s international standing.

Governance and Reform Imperatives

For the BSWF to succeed, it must:

• Be governed by a clear legal and regulatory framework aligned with Santiago Principles.
• Operate independently, with professional asset managers, market-based remuneration, and arm’s length oversight.
• Transition PSEs to function with autonomy and efficiency, reducing bureaucratic delays and enabling innovation.
• Foster joint ventures to turn around non-performing PSEs—among the 1,830 PSEs, around 400 remain non-functional, demanding nearly ?9 lakh crore annually in budgetary support.

Challenges and Concerns

• Macroeconomic Constraints: India faces a current account deficit and substantial fiscal pressures—conditions unlike traditional SWF-rich nations.
• Geopolitical and Market Risks: Global uncertainty and decoupling trends could impact cross-border investment strategies.
• Environmental and Technological Vulnerabilities: Investment risks in carbon-heavy sectors and exposure to data fraud or tech disruptions.
• Institutional Resistance: Political and bureaucratic inertia may delay implementation unless national interest is prioritized.

SWF Investments in India: A Growing Trend

Foreign SWFs are already deepening their footprint in India:

• $6.7 billion in direct investments in 2022 (up from $4.3 billion in 2021).
• Preferred sectors: healthcare, entertainment, renewables, infrastructure.
• Beneficiaries of tax exemptions on direct infrastructure investments via InVITS (Infrastructure Investment Trusts) and AIFs (Alternative Investment Funds), valid for investments made before March 31, 2024.

These incentives have encouraged foreign SWFs to explore establishing physical presence in India’s financial hubs, especially GIFT City, Gandhinagar.

In News:

MoEFCC Notifies Rules for End-of-Life Vehicles to Minimize Waste and Pollution.

Key Highlights:

Notified by: Ministry of Environment, Forest and Climate Change (MoEF&CC)
Effective from: April 1, 2025
Legal Basis: Environment Protection Act, 1986
Objective: To promote environmentally sound management of end-of-life vehicles (ELVs), enable recycling and reuse of vehicle components, and reduce resource extraction, pollution, and waste generation.

Key Features of the ELV Rules, 2025

1. Scope and Coverage

• Applicable to all vehicle categories including electric vehicles (EVs), e-rickshaws, and e-carts.
• Exempted vehicles: Agricultural tractors, trailers, combine harvesters, and power tillers.
• Exempted waste types: Batteries, plastics, tyres, used oil, and e-waste (governed under separate waste management rules).

2. Extended Producer Responsibility (EPR)

• Vehicle producers are mandated to meet annual scrapping targets based on the age of vehicles:
  • Transport vehicles: 15 years
  • Non-transport vehicles: 20 years
• Producers must fulfill their EPR obligations for all vehicles introduced into the domestic market, including those used internally.
• Annual EPR declarations must be submitted to the Central Pollution Control Board (CPCB) by April 30 each year.
• Producers must promote ELV deposition at designated collection centres or Registered Vehicle Scrapping Facilities (RVSFs).

3. Responsibilities of Stakeholders

• Registered Owners & Bulk Consumers: Required to deposit ELVs at designated centres or RVSFs within 180 days of becoming unfit.
• Collection Centres:
  • Handle ELVs in an environmentally responsible manner.
  • Maintain records and ensure safe storage and transfer to RVSFs.
• Registered Vehicle Scrapping Facilities (RVSFs):
  • Undertake depollution, dismantling, segregation, and recycling.
  • Ensure environmentally sound disposal of non-recyclables via authorized TSDFs.
  • Issue EPR certificates based on the volume of steel processed; valid for 5 years.

4. Monitoring, Compliance, and Penalties

• CPCB and State Pollution Control Boards (SPCBs) are responsible for:
  • Registration, inspection, and audit of producers, RVSFs, and bulk consumers.
  • Taking action against non-compliance, including suspension or cancellation of registration.
  • Levying environmental compensation for violations that cause harm to public health or the environment.

5. Registration & Certification

• Producers register with CPCB; RVSFs and bulk consumers with respective SPCBs.
• Registration certificates are issued within 15 days of application via a centralized online portal.
• EPR certificates are non-transferable and allow adjustment of both current and backlog obligations.

Related Policy and Incentives by MoRTH

The Ministry of Road Transport and Highways (MoRTH) supports the ELV Rules through:

• Vehicle Scrapping Policy: Targets voluntary phasing out of unfit and polluting vehicles.
• Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021: Provides operational criteria for RVSFs.
• Central Motor Vehicles (Amendment) Rules, 2021:
  • Waiver of registration fee for buyers submitting ELV Certificates of Deposit.
  • Concession in motor vehicle tax: 25% for non-transport, 15% for transport vehicles.

Electric Mobility Push

• MoRTH has issued several notifications promoting EVs, including:
  • Permit exemptions for battery-operated and ethanol/methanol-fueled vehicles.
  • Fee exemptions for registration and renewals.
  • Tourist permit benefits for EVs and distinct registration marks for visibility.

PM E-DRIVE Scheme

• Launched by Ministry of Heavy Industries on 29th September 2024 with a ?10,900 crore outlay.
• Aims to support electric 2-wheelers, 3-wheelers, ambulances, trucks, and buses with ?3,679 crore in demand incentives.
• Targets subsidization of over 28 lakh EVs.