When the Modi government made a pledge in 2014 to clean up India as a national concern, it also triggered attention towards devising solutions to India’s waste burdens. The government under the Swachh Bharat Mission and AMRUT (Atal Mission for Rejuvenation and Urban Transformation) schemes offers financial support to build a waste-management facility, which includes subsidies up to 30 per cent. However, the need of the hour is judicious allotment of financial resources to the right projects and technology. Given the rapid pace of urbanisation, India is facing a massive waste-management challenge. As a matter of fact, India could be one of the biggest producers of solid waste in the next five to 10 years, according to a report.
Over 377 million urban people generate 60 million tonnes of municipal solid waste per annum in India. Adding to the woe is the explosion of technology devices, which have resulted the recent spike in the pile of solid waste. Municipal authorities that provide solid waste management services are largely found to deposit the waste chaotically at landfill sites in and around major cities. By and large, the waste management in cities has so far been in an awful state. According to a report by The Indian Express, over three-fourths of the municipal budget on solid waste management goes into its collection and transportation, which leaves very little money for processing recovery and disposal.
With the existing urban population of 377 million set to reach 590 million through 2030, the condition of waste management will get worse if proper measures are not taken. The clear dearth of adequate waste processing infrastructure in place can amplify the problem to grow manifold in coming years. This calls for an aggressive approach by all stakeholders including politicians and ground players – especially those in informal sectors, who could foresee the issue beyond the experts’ committee rooms. A broad vision on policymaking to handle the burgeoning problem of waste management needs a war footing.
The major hurdle in waste handling in India is segregation of waste at source point attributed to low awareness level among people. The 2016 environment ministry’s directive of waste management rules mandates waste segregation at the source into dry, wet and hazardous. However, poor implementation of rules by the civic authorities has led to the big problem in waste collection and processing.
The rising waste burden
According to the National Solid Waste Association of India, typical Indian municipal solid waste (MSW) constitutes 16 per cent of recyclables, of which 55 per cent is bio-degradable and 29 per cent is inert materials. As much as 94 per cent of the MSW, medical waste and e-waste is dumped in open dumping grounds, while only six per cent goes for recycling, according to the analysis of Central Pollution Control Board of India.
India’s waste management market is projected to grow at a compound annual growth rate (CAGR) of 7.1 per cent through 2025 reaching US$ 13 billion. On an average, India produces over 60 million tons of solid waste annually, out of which only 70 per cent is collected by various agencies comprising of many civic agencies and private players. Categorically, there are four types of waste processed in India including solid, liquid, recyclable and hazardous. Considering the rapid consumption pattern in domestic and industrial sectors, India’s domestic waste burden is set to reach 162 million tons through 2030.
With opportunity stakes high in this market, social disgrace and lack of established models combined with basic challenges are inhibiting the visible growth in this sector. The problem is not only increasing volume of municipal solid waste, the ever-changing composition especially plastic with biodegradable waste is another concern. Another issue is the inadequate design of waste dumping landfill sites in addition to the poor enforcement of waste management rules across the verticals.
“The most basic challenge we face is no segregation of waste at source along with the insufficient capacity of waste handling PPA projects. Even today, the problem area remains the least business priority in India attributed to lack of management and knowledge about utilization of waste such as qualitative and quantitative data and inadequate disposal of scrap and other industrial waste,” says Dinesh Yadav, director and CEO, Arvind Envisol, a wastewater management organisation in Ahmedabad. Multiple challenges related to policy, finance, technology and capacity building are also grey areas of this sector, Yadav adds.
SMEs ushering in a cultural shift
Currently, majority of the waste produced in India is piling up in dumping grounds due to a lack of inadequate facilities for processing them. Given the size of the menace, the civic agencies alone cannot handle this problem. This gap offers huge void for investment opportunities for businesses, especially small and medium businesses, which have helped to bring in a culture of decentralised waste handling.
Until a few years ago, waste management was limited to collection transportation and dumping. The entry of SMEs has professionalised the waste handling and turning into useful products and harmless by-products. Ajay Popat, president of Ion Exchange (India) Limited says, “SMEs play a vital role in the socio-economic development of a country. Hence, it is important that they implement waste water management systems that are sustainable at the same time help improve their bottom line.” Pollution and increased demand have made good quality of water scarce and expensive, both in terms of direct cost of water and the effect of unsuitable water on plant economics and product quality, he adds.
SMEs began with focusing on industrial scale waste processing such as extensive composting, generating fuel from waste and recycling apart from establishing an informal system to collect waste at massive scale. Currently, SMEs in India are handling a range of sectors for collection and treatment of biomedical and hazardous wastes, municipal waste, industrial waste, plastic recycling and informal waste.
In addition, the regulatory guidelines are widening the possibility of foreign investment in the sector, in turn, giving an edge to the existing network of SMEs and other serious players operating in the waste management segment. The waste management market in India is on the rise, although this will take significant time to resolve the menace completely. The infrastructure being laid by the SME players to handle the waste is going to be the key facilitators to these investors in order to grow sustainably. The government is also pushing the new and existing players to join the growing market.
Collaboration with informal sector
Informal sector forms a crucial block of the waste management chain, especially for recycling and collection of e-waste. About 95 per cent of the e-waste is recycled by the informal sector alone and offers support to the formal sector in waste management players and agencies. Informal sector has a widespread network of a skilled workforce. However, some anomalies exist in their operations. SMEs can fill this gap and address the issue of irregularities by helping the informal sector players or partnering with them.
The major issue with the informal sector players is that they are limited to two or three stages of recycling for e-waste, which is not a comprehensive solution to e-waste management. SMEs may step in with better business models and tap the small e-waste pickers, who are currently being exploited by the large recycling companies. This will provide an established network of waste collectors to SMEs while giving a sustainable and formal platform to the informal sector. The collaboration can help avoid under-valuation of used electronic items that will enhance the revenue of the informal sector and individual e-waste pickers. This will also ensure higher yield and recovery of precious metals from existing 60 per cent extraction, in turn, making safe disposal to landfills. The practice will also reduce health hazards to people working in the informal sector and giving them job security.
According to a report published by ASSOCHAM, the waste generating segments including municipal waste, bio-waste and e-waste are projected to register a compound annual growth rate of about 7.1 per cent, 8.1 per cent and 10 per cent, respectively. The market will take some time to become an organised sector by incorporating sustainable waste management practices by and large. There is also a huge demand for experts to set up waste management units and projects to handle incinerators, e-waste, plastic waste, industrial hazardous waste. The sector requires more than Rs. 50,000 crore to Rs 1 lakh crore of investment over the next 10 years or so, according to Yadav.
A market that has almost free of cost raw material that is available across every visible corner of the country, can be a local goldmine for every potential processor around. SMEs are best suited to explore the waste management market right in spirit and will. Developed nations and advanced technology/methodology used by them to take on this massive challenge could be an inspiration model for sincere players. India has seen local snack makers, who have turned their businesses into global restaurant chains. SME entrepreneurs need to come out their social stigma to make best use of the opportunity in waste management sector along with government support.