The informal sector is at the heart of waste management in India. The value chain starts with collection from source of generation and the material flows across an array of stakeholders till it is recycled. The recycled material is then sold either to informal producers or MSMEs which helps them to remain competitive by incurring low cost on inputs.
The e-waste sector in India and the world is one of the fastest growing waste streams. The high obsolescence rates of electronic products is a key factor for such high rate of generation of e-waste. product differentiation, software upgrades entice the consumer to switch their products at a rapid pace leading to such fast paced generation of e-waste. The informal sector which is skilled enough to understand the value embedded in terms of resources in such waste pays for it and collects from the doorstep of the disposer.
E-waste is a source of different kinds of resources which include precious metals and rare earths. These are essential for production of such electronic goods and products. In the informal sector, which uses archaic means and methods to extract such resources, such precious metals and rare earths are lost forever. This is a serious drawback of the informal sector and is unsustainable in nature.
The formalisation of the informal sector is key to driving sustainability. Informal actors in waste management are primarily migrants who come from rural areas looking for a livelihood. The lack of livelihoods pushes them to become ragpickers and waste collectors from households. Herein starts the value chain of e-waste. Scrap traders purchase such e-waste from these collectors and segregate them to move up in the value chain to informal aggregators who then sell e-waste in bulk to informal and formal recyclers.
Key issues which are faced with formalisation of these informal actors are:
- Lack of awareness on benefits of formalisation
- Lack of access to land for conducting activities in a formal environment
- Lack of access to finance to be able to scale up activities
- Lack of access to technology which will ensure resource efficiency and upgrade livelihoods
Formalisation of livelihoods requires that all of the points mentioned above are enabled to create an ecosystem for such informal actors to access sustainable livelihoods. Furthermore, the policy regime should act to provide an enabling mechanism which ensures formalisation and the benefits which can accrue with it.
Informal clusters are found in slum areas across the urban landscape in India and the Global South. While tons of waste is disposed off daily, it is collected and channelised for recycling by informal actors. Formal infrastructure development requires capital which is not available with such actors. Furthermore, lack of skills on health and environment protection hinders the move towards formalisation.
To drive the growth of sustainable e-waste management in India, it is important that the bottlenecks mentioned above are addressed. The recent changes in the policy regime provides a fillip towards creation of infrastructure by ensuring enhancement of livelihood income through the Extended Producers Responsibility Framework in the e-waste management rules, 2022. Recycling of e-waste through use of technology ensures resource efficiency and enables a recycler to generate recycling credits which can be sold to OEMs, producers and other stakeholders.
The informal sector which has access to material because of the network of last mile collectors that have developed through decades can benefit from the different schemes of the Ministry of Micro Small and Medium Enterprises, Government of India. Recently, specific schemes have also been launched, including SPICE, which promote circular economy by integrating the microentrepreneurs and incentivizing them to upgrade the use of technology through provision of finance.
Larger schemes like RAMP (Raising and Accelerating MSME Performance), which are supported by the World Bank provide finance and technology upgradation to MSMEs. Furthermore, for clusters of informal sectors where key livelihood is waste, schemes like the Cluster Development Programme (CDP) are critical to enhance infrastructure and technology use. The development of such clusters can lead to enhanced use of technology and ensure implementation of Circular Economy in India.
As a developing country, India needs resources both in the form of metals to fuel manufacturing and finance to ensure investment in infrastructure. Formalisation is the key to ensure these dual benefits are accrued to ensure sustainability. Formalisation ensures development of large-scale recycling infrastructure through integration of stakeholders which in turns channelises secondary raw materials into production processes. Furthermore, with these stakeholders contributing to higher tax revenue for the Government, finance can be mobilised for development of infrastructure in the country. The crux lies in removing the bottlenecks towards formalisation. Awareness through outreach and advocacy are key to getting the informal sector to understand the benefits of formalisation. The initiation of the journey towards a sustainable future which has a positive social, economic and ecological bottom-line starts there.
Mr. Gautam Mehra, Director & Co-founder at Paripatram
