Union Cabinet to discuss capital expenditure support for critical mineral processing, VGF for RE grid-scale storage system

File photo for representational purposes only. | Photo credit: Reuters

The Union Cabinet is expected to take up two major plans for consideration, the first of which is to support capital expenditure to support critical mineral processing and the second is the Viability Gap Funding (VGF) scheme for developing a grid-scale storage system, according to a memorandum seen by The Hindu.

The Union Cabinet is scheduled to meet on Wednesday (November 4, 2026).

Critical processing of minerals

Although the memorandum did not specify the outline of the scheme and its scope, the policy has been in the works for some time.

The Hindu had earlier learned that the potential scheme could provide a subsidy of about 30% to set up these processing plants.

At an event by industry body FIMI in September this year, union ministry of mines secretary Keshav Chandra hinted that the government would introduce a scheme for domestic processing of lithium and nickel.

As early as April, Piyush Goyal, the former secretary, had indicated that the government had identified two minerals to launch the program, which are expected to, among other things, ensure the resilience of the electric vehicle battery chain.

Also read | Shifting critical minerals to India’s strategic hub

Financing the viability gap for grid storage

Grid-scale energy storage systems are deployed in transmission and distribution for greater grid stability, absorbing excess electricity when supply exceeds demand and discharging it during peaks or when needed.

About 1,835 million units (MU) of renewable energy were curtailed during July and August of this year, according to data collected by the Center for Energy and Clean Air Research (CREA). This includes 1,462 MU of solar power and 373 MU of wind power.

The Ministry of Heavy Industries is already implementing a Production Linked Incentive (PLI) scheme to set up 50 GWh of advanced chemical cell manufacturing capacity, of which 10 GWh would be for stationary grid storage.

Published – November 4, 2026 12:17 PM IST