The government’s commitment in eco-friendly and sustainable development, may find an echo in the Union Budget, which could nudge both public and private entities to invest in the circular economy with an initial focus on about a dozen areas, including agricultural, municipal, electronic and petroleum waste, two officials familiar with the thinking on Raisina Hill said.
The transition from a linear to a circular economy has been part of the budgetary exercise since Prime Minister Narendra Modi envisaged his vision of ‘Lifestyle For Environment’ or ‘LIFE’ at Glasgow in November 2021. Since then, India has committed to reach net zero emissions by 2070. The coming budget may incentivise investments in the circular economy for both reasons — to achieve the country’s climate goal and to create a new stream of economic activity with immense potential for employment generation, the two people added, requesting anonymity.
“So far, 10-12 areas have been identified such as recycling of end-of-life vehicles; lithium-ion batteries; gypsum; plastics; electronics and electrical equipment; hazardous industrial waste ; all kinds of rubber ; scrap metals; solar panels; municipal waste, both solid and liquid; petroleum items; agricultural waste, and food,” one of the two explained, adding that the list could expand.
The Budget may nudge various ministries and departments to work in this direction with specific targets and under coordination of the environment ministry. The key ministries include, agriculture, road transport and highways,petroleum, housing and urban affairs, steel, electronics and information technology, new and renewable energy, commerce and industry,chemicals and fertilizer,and food processing, he said.
Experts called the focus on the circular economy a smart move that could boost sustainable economic development. “The circular economy is not only key for enabling India to meet its climate-related goals but is likely to attract additional investment and create employment,” said Arindam Guha, partner & leader – Government & Public Services at Deloitte India. The Budget should incentivise investments in recycling activities and set up industrial parks for the specific purpose, he added.
According to Saket Dalmia, president of PHD Chamber of Commerce and Industry (PHDCCI), moving to a circular economy is “extremely important” . “Circular economy will not just reduce waste but has the potential to create employment and at the same time extract the value materials which are required for future manufacturing.”
Arvind Sharma, partner at law firm Shardul Amarchand Mangaldas & Co said that recycling and reuse had been an essential part of Indian culture, and are hence easier to implement in the country. “By 2050, India may save over $600 billion by implementing circular economy techniques in relevant industries including food, agriculture, infrastructure as well as mobility,” he said adding that a “proper budgetary allocation” for circular economy is needed in 2023-24.
According to Dalmia, industry is willing to actively participate in the government’s endeavour . “This budget can introduce something like a framework on circular economy reporting, clarifying the mechanism surrounding trading of extended producer responsibility certificates and providing fiscal incentives to businesses to complete the supply chain.”
“Also, investing in capacity building of alternative energy, direct incentives for EV, incentives for building recycling plants for various sectors, and providing exemption on duties and taxes for recycled products can be a couple of things that can be addressed by this budget to kickstart the circular economy,” he added.
The previous budget recognised the importance of circular economy and that led to formulation of rules for e-Waste, plastic and battery waste management in 2022, he said.