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Circular Economy

2023 NOV 23

Mains   > Environment & Ecology   >   Pollution   >   Conservation methods


GS 3> Environment & Ecology   >   Pollution   >   Conservation methods


AIM's RISE accelerator sparks global innovation for circular economy start-ups in India and Australia.(Hindustan Times)


  • Circular economy is an economic system based on the reuse and regeneration of materials, especially as a means of continuing production in a sustainable way.
  • Circular systems employ reuse, sharing, repair, refurbishment, remanufacturing and recycling to create a closed-loop system, minimizing the use of resource inputs and the creation of waste, pollution and carbon emissions.
  • A circular economy entails markets that give incentives to reusing products, rather than scrapping them and then extracting new resources. “The goods of today are the resources of tomorrow at yesterday's resource prices”(UNCTAD).


  • Improve resource utilisation:
    • The current linear economic model involves extracting resources, processing them into products, and then disposing of these products after use. This approach leads to inefficient resource utilization, as many discarded products could still be valuable if repaired, reused, or recycled.
  • Address the problem of waste management:
  • According to CPCB, India generates over 62 million tonnes of waste every year. About 43 million tonnes (70%) are collected, of which about 12 million tonnes are treated, and 31 million tonnes are dumped in landfill sites. 
  • This is expected to increase to 165 million tonnes by 2030. To tackle this growth, circular economy is a viable solution.
  • Promote sustainable resource management:
    • India’s resource extraction is 1580 tonnes/acre, which is 251% higher than the world average of 450 tonnes/acre. However, only around 20% of goods are recycled. Through circular economy, the rate of resource extraction can be reduced significantly.
  • Employment generation:
    • Ex- According to NITI Aayog, in the next 5–7 years,circular economic model has the potential to produce 1.4 crore employment and lakhs of new businesses like waste to energy.
  • Industrial growth:
    • Circular economy emphases on localizing production and using locally sourced materials, which could create new opportunities for MSMEs.
  • Preservation of Natural Capital:
    • Practicing a circular economy could enhance natural capital by encouraging nutrient flow within the ecosystem and creating conditions for regeneration.(SDG-12)
  • Attain Global climate goals: 
    • According to the Circularity Gap Report,2023, Only 7.2% of the global economy is circular. Hence, by promoting the use of renewable energy sources, and minimizing waste generation, the circular economy aligns with commitments under the Paris Agreement.



  • Global Alliance on Circular economy and Resource Efficiency (GACERE)- It was launched in 2021 and is supported by UNEP and UNIDO. India is a member of GACERE. It advocates for a global circular economy transition.
    The World Economic Forum's Platform for Accelerating the Circular Economy (PACE): It brings together public, private, and civil society leaders to collaborate on circular economy projects and initiatives.
  • The United Nations Environment Programme's (UNEP) Circular Economy Programme: It works to integrate circular economy principles into policy frameworks, and encourages the use of life-cycle approaches in decision-making processes.


  • Draft National Resource Efficiency Policy (NREP), 2019: Aims to establish a regulatory environment to integrate resource efficiency in mainstream practices, reducing primary resource consumption and promoting circular economy principles.
  • Extended Producer Responsibility (EPR): A regulatory approach making manufacturers responsible for their product's post-consumer waste, encouraging sustainable design and recycling.
  • Swachh Bharat Mission (SBM): Targets waste segregation, recycling, and composting to move India towards being a "zero-waste" country.
  • GOBAR-Dhan scheme: Converts cattle dung, kitchen, and agricultural waste into biogas-based energy.
  • Greene Programme: Aims to raise awareness about the environmental and health impacts of polluting e-waste recycling technologies and promote cleaner methods.
  • "Mission Life" : This initiative aims to promote sustainable lifestyles globally and create a mass movement for an environmentally friendly way of living.


  • Volume of waste generated:
    • With rapid urbanization, rising population, and increasing dependence on plastics, the amount of waste generated far exceeds the management capabilities.
  • Informal waste management sector:
    • As per a study by Chintan Environmental Research and Action Group, nearly 90% of waste in India is collected and segregated by informal workers, often without formal recognition or support.
    • This makes it difficult to implement the waste management rules, ensure scientific disposal of wastes and address the welfare of workers.
  • Lack of differentiation between circularity and recycling:
    • The policies around waste management in India broadly focus on end-of-life waste management. Hence, there is little regard for reuse, repair, refurbish and remanufacture of products.
    • Ex:  A survey by FICCI found that less than 30% of Indian businesses actively engage in practices beyond basic recycling, like refurbishing or remanufacturing.
  • Infrastructure deficit:
    • Due to lack of adequate infrastructure for waste management, considerable amount of plastic waste is not recycled, leading to it being incinerated or dumped in landfills.
    • Ex:  In Bengaluru, only about 40% of the plastic waste generated is recycled, as reported by the Bruhat Bengaluru Mahanagara Palike (BBMP), indicating a severe infrastructure deficit.
  • Lack of awareness:
    • There is lack of awareness and understanding of circular economy concepts among businesses and consumers.
    • Ex:  A 2020 study by TERI (The Energy and Resources Institute) revealed that over 70% of Indian consumers are unaware of the concept of circular economy, impacting its implementation.
  • Absence of collaboration:
    • There is absence of collaboration among the key stakeholder: government, business and consumers. This hinders the adoption of circular economic practices.
    • Ex:  A 2021 report by NITI Aayog highlighted that less than 20% of Indian waste management initiatives involve collaboration between government, private sector, and consumers.
  • Downcycling:
    • Downcycling refers to the process of recycling materials into products of lower value and quality compared to the original material.
    • This leads to a reduction in the quality and value of the recycled material, making it less desirable for reuse.
    • Ex:  Research from the Indian Institute of Science (IISc) Bangalore found that over 60% of plastic waste recycled in India undergoes downcycling.
  • Lack of incentives for industry:
    • Sustainability transition can be costly and time-consuming, and businesses need incentives to make the shift.
    • Ex:  According to a Confederation of Indian Industry (CII) report, only about 10% of Indian businesses receive any form of government incentives or support for transitioning to a circular economy.
  • Deficit in Research and development:
    • Ex:  The Department of Science and Technology's 2019-2020 report stated that less than 5% of its budget was allocated to research in sustainable and circular business models or technologies.


  1. Comprehensive Circular Economy Policy: A policy encompassing capacity building, awareness, R&D, and multi-stakeholder collaboration, similar to the European Union's Circular Economy Action Plan, which has successfully integrated circular economy principles into manufacturing and consumption.
  2. Circular Economy Stakeholder Platform: This platform, akin to the Netherlands' Holland Circular Hotspot, would facilitate knowledge sharing, networking, and progress monitoring, promoting best practices in circular economy.
  3. Improve Waste Management System: Investing in waste processing and recycling facilities, like Sweden's advanced recycling plants, can enhance India's waste management efficiency. Sweden's system is so effective that it imports waste for energy recovery.
  4. Awareness Campaigns: Government-led campaigns and education programs to promote circular practices, similar to Japan's "3Rs" (Reduce, Reuse, Recycle) initiative, which has significantly increased public participation in sustainable waste management.
  5. Encourage People and Industry Adoption:Policies incentivizing the use of recycled materials, similar to California’s Beverage Container Recycling Program, which offers incentives for recycling and has significantly increased recycling rates in the state.


Q. The concept of a circular economy has gained popularity in recent times. Why should India adopt this economic model? What are the challenges in adopting the model?(15marks, 250words)