The recent few days have witnessed the citizens waking up to news of plastic-ban products ranging from retail packaging to thermocol. Amidst the announcement was a wave of confusion on the exact ban parameters and the products to which they have been extended to. While fines have been collected and chaos has prevailed, let’s have a look at how exactly the ban sums up for the plastic industry as on today. The article highlights a few aspects of the entire scenario involving plastic and the current state that it stands in.
The first man-made plastic was created by Alexander Parkes who publicly demonstrated it at the 1862 Great International Exhibition in London. The material, called Parkesine, was an organic material derived from cellulose that once heated could be moulded and retained its shape when cooled.
The word “plastic” was coined by Leo Baekeland.+-
According to various sources, The world’s first fully synthetic plastic was bakelite and the invention took place in New York in 1907 by Leo Baekeland.
Plastic industry in India began in the year 1926, combs, soapboxes and ashtrays being the first products. As per 2016-17 reports, annual turnover of Indian Plastic Industry was around 1 lakh crores with the contribution of Maharashtra standing at 50,000 crores. Indian Plastic Industry turnover by volume is 13.4 MMTPA (Million Metric Tonne Per Annum) with a CAGR (Compounded Annual Growth Rate) at 10%. There are presently 2000 exporters in this market. The Current Investment in the Machinery is approximately US$ 5 Billion expected to be around US$ 12 Billion by 2020.
The plastic industry contributes around 7% to India’s GDP while its contribution to Maharashtra’s GDP is 35% which is substantial compared to other sectors. More than 11 lakh people are employed in this sector as per 2016-17 report and year 2018 was to see a rise of 5 lakh more hires which may get impacted by the ban to some effect.
There are around 30000 organised processing units and more than 20000 unorganised processing units. In the year 2017 total consumption of plastic was calculated to be around 16.5 million tonnes. The use of plastic per person is around 11 kg which is estimated to be 20 kgs in the year 2020, the global average being around 40 kgs.
The state of Maharashtra has imposed a ban on various items from 23rd June 2018 in order to tackle issues of environmental concerns, the drainage choking during monsoons owing to plastic items being some key ones. The ban has immediately impacted the sector shattering nearly 3 lakh jobs overnight and rendering people jobless. Around 2500 plastic units have been shut down with more than 10% of the plastic goods completely wiped off from the market. The revenue loss due to the ban for the state is around Rs. 15000 crores. Mumbai (10 lacs+) reported a high fine collection post the ban implantation followed by Pune (3.69 lakhs) and Nashik (3.60 lakhs). Automotive, Packaging, Electronics, Agriculture, Textiles, Petrochemicals, Infrastructure, Ecommerce & Plastic Recycling Units have been severely affected because of the ban on plastics as it has hit them mainly for operations that required a regular usage of the plastic items that have been banned.
Example: Online portals & Logistics firms have been impacted in their packaging process, resulting in high costs of alternatives.
The ban has also resulted in offline retail sales plunge by 50% & restaurant parcels/takeaway business by 30%. As most of the Indian units work on loans, these bans may also potentially give rise to a bad debts situation as the closed units may find it hard to pay back the loan amount to the banks.
The imposed fine structure is as follows:-
(1) Rs 5,000 for the first offence.
(2) Rs 10,000 for the second offence.
(3) Rs 25,000 for the third offence or a three-month jail term or both.
(4) Manufacturers stand to lose their license.
In Mumbai, BMC has appointed special marshals who conduct the raids and penalise the violators.
While the ban has had its share of support & oppositions, there are new sources of alternatives which can be looked at as replacements for plastic if it is completely banned in the near future.
Paper, cloth & jute bags, Glass & Steel utensils, Cardboard, bubble wraps & tin foils are some avenues where the manufacturers and the common man can look to utilise to effectively counter this ban and not allow the routines to get affected. History has proved that any decision affects the economy in some or the other way, the best measure is to minimize the impact of viable solutions.