Will GST set back Swachh Bharat Abhiyan’s objectives?

Prime Minister Narendra Modi’s Swachh Bharat Abhiyan completes three years today, but some of its footsoldiers who are doing their bit to keep India clean, are struggling to survive – thanks to GST, which kicked in from July 1.

“My earnings have gone down by at least 20-40 per cent after GST,” says Chote Lal, who has been collecting, segregating and selling plastics, glass, metal, paper and leather scrap for the past 23 years in Delhi.

Bent over heaps of waste metal, paper and glass, Chote Lal, in his mid-30, however, says he has no option but to continue this work as at least all that he collects is being picked up by scrap dealers, albeit for a lower price.

“The scrap dealers say they are helpless because recycling factories are paying them much lower than in the pre-GST era,” he says, adding that if earlier he used to earn about ₹500/day, “this has now come down to about ₹300/day.”

According to an estimate, there are about 15 lakh waste-pickers in the country who collect about 10,000 tonnes of waste every day, which is segregated and sold to scrap dealers, who then sell it factories for recycling.

After the goods and service tax (GST) was set in motion, waste-pickers, positioned lowest in the supply chain, are the worst hit, said Sashi Pandit of the All India Kabadi Mazdoor Mahasangh.

Post-GST, the tax on glass waste is 18 per cent, while cardboard, PET plastic and paper attract 12 per cent tax.

It is not just the unorganised waste collection sector — the raddiwallahs — but also start-ups and recycling companies that are facing the GST heat on their business.

“It is not the difference in the pre- and post-GST rates on scrap but the tax differential on electronics and scraps that is impacting the industry. Electronics are taxed at 28 per cent and the recycled scrap at 18 per cent,” said Akshay Jain, Managing Director at Namo eWaste Management Ltd, adding that recyclers now have to ‘only’ sell directly to the factories as middlemen have vanished under GST.

Another company, PomPom, which was working on recycling and provided doorstep service to households and bought items, including waste paper, cardboard, plastics, glass and metal, is understood to have temporarily put a stop to its services.

While Deepak Sethi, CEO and Co-founder of Pom Pom Recycling Pvt Ltd, did not respond to repeated calls and text messages, calls to the company’s pick-up service said that services had been temporarily put on hold due to GST.

“We will get in touch with you for your order once we resume,” said the company’s call centre.

Owing to GST’s impact, rates for recycling items offered to its customers have also been reduced.

The owner of another e-waste recycling company said they had not taken any orders after GST. “We work with companies primarily, and post-GST, we have not got any orders as the market has been depressed,” he said, declining to be named.

While the industry has proposed lowering of rates on recycling items to make it profitable for operators, the GST Council is yet to take a decision.

Till then, one can only hope that piling city waste does not end up crashing down the Clean India Mission.

COMMENT NOW