Opinion

Why the Indian government must rescind GST levied on scraps of plastic, paper, cardboard and glass

It will worsen environmental conditions, exacerbate poverty and defeat the aims of the Swachh Bharat Abhiyan.

To say that India enjoys a particularly complex economy would be stating the obvious. But an indication of exactly how complex the economy is came to the fore when the Goods and Services Tax was levied on recyclable scrap. The GST rate on waste cardboard, PET plastic and paper is 12%, while other old plastics and bottles attract 18% tax. The government has put municipal solid waste in an exempt category for GST but then seems to contradict itself by taxing recyclable waste materials that emerge primarily from municipal waste.

On its own, GST seems like a step forward in our complex taxation system. However, in its teething stages in dealing with waste, it has treaded on the toes of several lakh recyclers – the majority of them struggling to earn minimum wages to stay above the poverty line. It will end up worsening environmental conditions and cleanliness in public spaces too.

Drop in price of scrap

Most waste in India reaches our recycling factories via sheer human labour. Typically, factories in India do not import scrap as they once did. Instead, they depend on the country’s own explosion in consumption for their raw materials. They purchase scrap from large dealers sitting at the apex of a long trade chain, powered at the base by over 15 lakh waste pickers.

Some of the traders at the top of this chain are large, rich and formalised. Most of the rest of the six lakh traders have small enterprises, buying mixed waste from waste pickers and selling it onwards. These traders employ several lakh workers as waste sorters in their shops and recycling units. While data is patchy, a June 2015 report by the Federation of Indian Chambers of Commerce suggests that the plastics recycling industry in India employs about 1.6 million people, and has more than 7,500 processing units. Key to its success is the fact that the raw materials for this industry are free to start with.

(Photo credit: Reuters).
(Photo credit: Reuters).

But what is happening as GST, which was implemented across the country from July 1, rolls out?

Already, the prices of some scrap materials have dipped. In Delhi, the price of cardboard has fallen by Rs 3 a kg, a reduction of almost 25%. The price of waste PET bottles has fallen by about 30%. No trader wants to pay for a devaluating material. As formal sector recyclers anticipate taxes, they hedge against uncertainty by either not purchasing waste and creating a glut, or paying less for waste. Both lead markets to tank.

The GST on glass bottles and PET will reduce their competitiveness vis-à-vis virgin materials, resulting in reduced recycling. There is uncertainty right now, and the markets have slowed down. This, at a time, the markets are typically the busiest (in the summer).

Currently, even relatively low-value materials such as waste plastic bags are picked up for recycling at Rs 3 per kg because they have an economic value. Post GST, initial signs show that these materials will not be economically viable as the final recyclers pay taxes on them and hence will pay less to acquire them. Waste pickers are therefore unlikely to pick them up. This is a crisis in itself because plastic bags have proved to be a menace across India. They clog drains, are ingested by cows and other animals and now India has one of the world’s largest plastic landfills, fed by its plastic bags, floating in the Bay of Bengal. All these problems will stand exacerbated.

Ideally, plastic bags should simply be banned rather than taxed. Regardless, this trend implies an additional burden on an already overworked municipal system.

Recycling is widely acknowledged to be a means of reducing greenhouse gas emissions. Actors in the developed world have adopted this as one of many strategies to reduce their emissions. India already has a robust recycling system and one of the world’s highest recycling rates. A 2009 study by Chintan Environmental Research and Action Group computed that Delhi’s recycling efforts saved 3.6 times more greenhouse gas emissions than any project receiving carbon credits in India at the time. India’s commitment to fighting greenhouse gas emissions has to be an inclusive one if it must be effective. The GST must therefore protect recycling given its wider value to the nation.

Impact on most vulnerable

If it does not, its first victims could be women and children.

Women waste pickers, often scavenging or working only part time due to domestic chores, earn less. With a dip in prices for recyclable waste, their income is likely to reduce even further. As they become lower contributing members of the household, they will be further economically and socially marginalised.

A decline in the income of adults working as waste pickers will likely have a severe impact on children. Trends from other cases of reduced incomes from waste-picking showed that in 2013, 63% of the children of an impacted site dropped out of school to start working in order to supplement their family income when their parents were unable to access waste. In 2009, during the recession, waste prices also saw a similar dip. A 2009 study at Chintan showed that 41% families gave up buying milk for their children entirely for over nine months, and 80% stopped buying luxuries, which they defined as fruit, meat and milk.

Workers involved in recycling and sorting who are typically paid on the basis of the minimum prices of waste scrap could also take a hit in their incomes. Some employers also believe that with overall income reduced due to lower selling prices, they will be unable to continue to employ all the workers they have today. A conversation with several such employees recently suggested that older employees are likely to be let-off first, followed by women.

Thus, the unintended impact of GST on recyclable waste is likely to be severe. It will reduce livelihoods, exacerbate poverty and increase hardships particularly for women and children. It will have a negative impact both the environment and the aims of the Prime Minister’s Swachh Bharat Abhiyan, which would want all recyclable waste picked up and recycled rather than allowed to litter public spaces.

Rescinding the GST levied on scraps of plastic, paper, cardboard and glass is essential. These are the food-bowls of crores of India’s real environmentalists.

Bharati Chaturvedi is the director of the Chintan Environmental Research and Action Group.

We welcome your comments at letters@scroll.in.
Sponsored Content BY 

Not just for experts: How videography is poised for a disruption

Digital solutions are making sure it’s easier than ever to express your creativity in moving images.

Where was the last time you saw art? Chances are on a screen, either on your phone or your computer. Stunning photography and intricate doodles are a frequent occurrence in the social feeds of many. That’s the defining feature of art in the 21st century - it fits in your pocket, pretty much everyone’s pocket. It is no more dictated by just a few elite players - renowned artists, museum curators, art critics, art fair promoters and powerful gallery owners. The digital age is spawning creators who choose to be defined by their creativity more than their skills. The negligible incubation time of digital art has enabled experimentation at staggering levels. Just a few minutes of browsing on the online art community, DeviantArt, is enough to gauge the scope of what digital art can achieve.

Sure enough, in the 21st century, entire creative industries are getting democratised like never before. Take photography, for example. Digital photography enabled everyone to capture a memory, and then convert it into personalised artwork with a plethora of editing options. Apps like Instagram reduced the learning curve even further with its set of filters that could lend character to even unremarkable snaps. Prisma further helped to make photos look like paintings, shaving off several more steps in the editing process. Now, yet another industry is showing similar signs of disruption – videography.

Once burdened by unreliable film, bulky cameras and prohibitive production costs, videography is now accessible to anyone with a smartphone and a decent Internet bandwidth. A lay person casually using social media today has so many video types and platforms to choose from - looping Vine videos, staccato Musical.lys, GIFs, Instagram stories, YouTube channels and many more. Videos are indeed fast emerging as the next front of expression online, and so are the digital solutions to support video creation.

One such example is Vizmato, an app which enables anyone with a smartphone to create professional-looking videos minus the learning curve required to master heavy, desktop software. It makes it easy to shoot 720p or 1080p HD videos with a choice of more than 40 visual effects. This fuss- free app is essentially like three apps built into one - a camcorder with live effects, a feature-rich video editor and a video sharing platform.

With Vizmato, the creative process starts at the shooting stage itself as it enables live application of themes and effects. Choose from hip hop, noir, haunted, vintage and many more.

The variety of filters available on Vizmato
The variety of filters available on Vizmato

Or you can simply choose to unleash your creativity at the editing stage; the possibilities are endless. Vizmato simplifies the core editing process by making it easier to apply cuts and join and reverse clips so your video can flow exactly the way you envisioned. Once the video is edited, you can use a variety of interesting effects to give your video that extra edge.

The RGB split, Inset and Fluidic effects.
The RGB split, Inset and Fluidic effects.

You can even choose music and sound effects to go with your clip; there’s nothing like applause at the right moment, or a laugh track at the crack of the worst joke.

Or just annotated GIFs customised for each moment.

Vizmato is the latest offering from Global Delight, which builds cross-platform audio, video and photography applications. It is the Indian developer that created award-winning iPhone apps such as Camera Plus, Camera Plus Pro and the Boom series. Vizmato is an upgrade of its hugely popular app Game Your Video, one of the winners of the Macworld Best of Show 2012. The overhauled Vizmato, in essence, brings the Instagram functionality to videos. With instant themes, filters and effects at your disposal, you can feel like the director of a sci-fi film, horror movie or a romance drama, all within a single video clip. It even provides an in-built video-sharing platform, Popular, to which you can upload your creations and gain visibility and feedback.

Play

So, whether you’re into making the most interesting Vines or shooting your take on Ed Sheeran’s ‘Shape of You’, experience for yourself how Vizmato has made video creation addictively simple. Android users can download the app here and iOS users will have their version in January.

This article was produced by the Scroll marketing team on behalf of Vizmato and not by the Scroll editorial team.