Blind Spots In GST Could Push Millions Into Poverty And Wreck The Swachh Bharat Plan

By Rajat Rai Handa:

The Goods and Services Tax (GST) was introduced earlier this year by the Government of India and hailed as the greatest tax reform since Independence. While GST can be seen as a step ahead in India’s large and complicated taxation system, there are a few blind-spots in the design of the policy which are having severe unintended consequences for millions of people in India’s informal sector. These affects are particularly bad for the recycling industry, where several lakhs of waste pickers across the country are already struggling to earn minimum wage to survive.

Under the GST Regime, most of the recyclable items have been taxed at 18%, while some are taxed at 12%. This has led to recyclable items being sold in the market for the same price as virgin (brand new) items, driving down demand, directly affecting the daily income of waste pickers.

Wastepickers put in a lot of effort to collect, segregate and manage waste, which is all crucial for the environment and society. They help recycle 20-25% of all of Delhi’s massive 10,000 metric tonnes of waste generated every day. Yet theirs is a thankless job without security, safety or dignity. Chintan Environmental Research and Action Group went around collecting data and found out that most of them have suffered a loss of around 50% in their income. Aminoor from Vivekananda Camp in Chanakyapuri, who used to make ₹450 a day earlier, is now struggling to make even ₹250 a day, due to which he is finding it hard to put food on the table for his family. Waste pickers from Teesri Pushta, Usmanpur, have it even worse, where on an average they used to make ₹260 a day, they are now making ₹130 a day.

The problem, however, does not stop there. The unintended consequences of GST go beyond impacting the livelihoods of millions, and directly affect our environment. If waste pickers are unable to recycle waste, it will lead to accumulation of waste over time, which would mean more waste in landfills and public spaces, further exacerbating pollution problems in a country already grappling with a pollution crisis. This would then also go against the aims of the Prime Minister’s Swachh Bharat Abhiyan, which would ideally want all recyclable waste picked up and recycled rather than be allowed to remain littered around.

The good news is that waste pickers are not taking this quietly. In today’s information age, they are using social media with the help of Chintan to voice their concerns and reach out to more and more people in the hopes that this will attract the attention of policymakers and make them reconsider GST on recyclable items. You can check out the hashtag #WasteGST on social media to find out more stories like this, particularly on Instagram, to hear directly from the waste pickers about their struggles post-GST.

The blind-spots in the Goods and Services Tax must be addressed, or millions of people will be pushed further down the poverty line deeper into the vicious poverty trap. Rescinding GST on recyclable waste is thus essential to protect their livelihoods, and for the environment.

If you too have a comment about this problem, please use #WasteGST and voice your opinion on social media.