Innovative Funding Initiatives Making Progress : Financing India’s Waste Management

The main hurdle for solid waste management projects in low and middle income countries often is not about technology or process implementation but financing of the waste management infrastructure, explains the Institute for Sanitary Engineering and Waste Management’s Vishwas Vidyaranya.

This was one of the key points debated at the ISWA congress in Antwerp this year. In many developing countries, there is hardly any gate fee for waste processing and hence it becomes economically unviable. It is therefore necessary to find other economic channels such as taxes that can continuously fund these projects.

On October 2nd 2014, The Government of India launched the ambitious Swachh Bharath Abhiyaan or the Clean India movement which aims to provide access to basic sanitation to all citizens of the country. Apart from this, it also aims at achieving 100% coverage for waste collection and processing in 4041 towns and cities across India for a population of about 306 million by October 2nd, 2019 which marks the 150th birth anniversary of Mahatma Gandhi (SwachhBharatUrban, 2015). This initiative has been one of the top priorities of the government and has gained high popularity in the country.

The government has allocated approximately $1.11 billion for solid waste management projects in urban areas which generate about 0.18 million tons of MSW every day (SwachhBharatUrban, 2015). Apart from direct funding from central and state governments, special taxes and cess have been implemented to finance these projects. During the national budget allocation for FY 2015-16, the government enabled the provision to implement a tax of up to 2% on all or certain services to fund the Clean India initiative and on November 15th 2015, a tax of 0.5% on all taxable services was officially notified.

Another special legislation which can benefit the sanitation and waste management projects in India is The Companies Act 2013 which mandates large companies to spend 2% of their net profits on social welfare (The Gazette of India, 2013). With this law, approximately $2 billion could be spent by companies annually towards corporate social responsibility (CSR) (Ghuliani, 2013). Even though the CSR activities are not restricted to sanitation or waste management, this can definitely contribute to the Clean India mission.

Apart from the national budgets, many municipalities have their own tax for waste management projects. The city of Bangalore, for example generates around 4000 tons of municipal solid waste every day and the municipal body collects a solid waste management cess of approximately $0.5 per month for a residential plot having an area of 3000 Sq. ft. along with the property tax (BBMP). While this is a meagre amount, it still contributes to the local waste management budget.

In many developing countries across the world, it might not be possible to implement high user fee directly for waste management services as in the EU and hence other ways of financing needs to be explored through policy changes. Some of these initiatives in India seem to be headed in the right direction.

Vishwas Vidyaranya

(2015). Retrieved November 23, 2015 from SwachhBharatUrban

BBMP. (n.d.). BBMP. Retrieved November 23, 2015

Ghuliani, C. (2013, November 22). BSR. Retrieved November 22, 2015

The Gazette of India. (2013).

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