Author: Sujal Kumar Poddar, Aasvi Kedia, Ditti Baid, Suryansh Pratap Singh

ABSTRACT

This study investigates the structural and economic disconnect between India’s municipal waste management ambitions and the lived realities of the informal waste workers who form the actual backbone of the country’s recycling ecosystem. While modern policy frameworks, exemplified by the Extended Producer Responsibility (EPR) guidelines of 2022 and urban clean-city campaigns, promote a highly formalized, capital-intensive vision of the circular economy, they systematically marginalize the informal sector, which handles 60% to 70% of urban recyclable waste. Utilizing primary survey data collected from 110 informal waste workers across Indian urban clusters, this paper analyzes the micro-economic constraints, behavioral realities, and institutional dynamics that govern waste worker decision-making. The empirical findings indicate that waste workers are not inherently unaligned with environmental sustainability; rather, their practices are strictly bounded by severe financial precarity, high transaction costs, and systemic institutional exclusion. Descriptive and cross-tabulation analyses demonstrate that over 57% of surveyed workers earn less than ₹10,000 per month, and 81.8% experience high financial instability, leaving them with zero economic margin to absorb the costs of enhanced segregation or safety compliance. Furthermore, the existing fiscal framework, such as an 18% Goods and Services Tax (GST) on recyclable scrap, drives transactions into untaxed, informal cash networks, penalizing formalization. This paper argues that India’s circular economy cannot succeed through top-down corporate monopolization. Instead, sustainable waste management requires an incentive-compatible policy framework that restructures fiscal policies, enforces informal cooperative sourcing quotas within EPR, provides micro-level neighborhood infrastructure, and leverages municipal co-management models to elevate informal workers into recognized green-collar professionals.