India’s transition to a circular economy is vital for sustainable growth. Budget 2025 can accelerate this shift through tax incentives, waste-to-energy investments, and expanded PLI schemes, driving innovation, job creation, and environmental benefits while enhancing economic resilience.
India must prioritise a circular economy through collaboration among all stakeholders.
By Prashant Singh
The Viksit Bharat 2047 vision aims to transform India into a developed economy, with GDP projected to expand from USD 3.4 trillion to USD 30 trillion. Central to this vision is the advancement of sustainability through a robust circular economy.
The Case for Circularity
Circularity represents a sustainable economic model that optimises resources, minimises waste, and significantly reduces carbon emissions. In contrast, India’s current linear economy heavily relies on resource extraction, production, and disposal, leading to substantial waste and environmental degradation. India generates over 62 million tonnes of waste annually, yet only 12 million tonnes are treated, while 31 million tonnes end up in landfills. By 2030, waste generation is expected to surge to 165 million tonnes, underscoring the urgent need for circular economy efforts.
Policy Framework and Opportunities
India has laid a strong foundation for circularity with policies such as the National Resource Efficiency Policy (NREP), Extended Producer Responsibility (EPR), Swachh Bharat Mission (SBM), and the Atal Innovation Mission. Budget 2025 presents an opportunity to amplify these efforts by introducing financial incentives that encourage sustainable practices.
* Tax Rebates and Subsidies: Tax breaks for companies adopting sustainable technologies and green manufacturing can spur innovation and reduce reliance on virgin materials. For instance, lowering the GST rate on recycling equipment (currently 18%) could accelerate the adoption of advanced waste management systems.
* Waste-to-Energy Investments: Providing subsidies for waste-to-energy projects could make these technologies more affordable and widely accessible, fostering innovation and investment in this critical sector.
* PLI Schemes: The existing Production Linked Incentive (PLI) scheme has already attracted INR 1.23 lakh crore in investments and created 8 lakh jobs across 14 sectors. Extending this scheme to include circularity could further boost resource efficiency, promote waste minimisation, and inspire young entrepreneurs to develop sustainable solutions.
Economic and Environmental Impact
Integrating circularity into business processes has the potential to generate employment, enhance GDP growth, and position India as a global leader in sustainability. With agriculture accounting for 15% of GDP and 43% of employment, the circular economy is especially crucial in mitigating climate change risks that affect agricultural output and coastal livelihoods.
To mitigate climate challenges and achieve sustainable growth, India must prioritise a circular economy through collaboration among all stakeholders. By embracing circularity in Budget 2025, India can set global standards in sustainability and drive inclusive economic progress.
(Prashant Singh, Co-Founder & CEO, Blue Planet Environmental Solutions.)
