India’s Plan to Boost Bioplastics: Key Recommendations from EY and ASSOCHAM
New Delhi, India – A recent report by EY and ASSOCHAM titled ‘Incentivising Bioplastics, a Biopolymer’ has made several key recommendations to promote the bioplastic sector in India. The report suggests offering capital subsidies of up to 50% on eligible investments over a five-year period. This financial support aims to offset high initial production costs and make bioplastics more economically viable.
Key Recommendations
The report recommends fiscal incentives, regulatory changes, and government-backed support for research and development. These measures align with India’s BioE3 policy, which aims to promote bio-manufacturing, create a circular economy, and achieve net-zero carbon emissions.
Financial Incentives
To encourage businesses to invest in bioplastics, the report suggests reducing GST rates on bioplastic products to 12%. State governments could also introduce sector-specific schemes offering benefits like interest subvention, SGST reimbursement, power rebates, and land subsidies.
Regulatory Framework
The report advocates for a strong regulatory framework, including mandating the use of bioplastics in place of traditional plastics. It proposes Quality Control Orders (QCOs) to maintain bioplastic standards and suggests import restrictions to protect domestic manufacturers.
Research and Development
Government-backed research and development and the creation of ‘bioplastics clusters’ are essential elements of the strategy. These clusters would foster innovation, encourage industry-academic partnerships, and create jobs.
Expert Opinions
Deepak Sood, Secretary General of ASSOCHAM, emphasized the government’s role in ensuring the success of bioplastics in India. He stated, ‘Government-backed fiscal incentives and regulatory policies are paramount in overcoming initial market entry challenges, such as high production costs and mandating their use.’
Bipin Sapra, Tax Partner at EY India, added, ‘By allowing grants, subsidies, and an apt regulatory framework, the Indian government can incentivize businesses to invest in bioplastic production, research, and development.’
Public Awareness
The report also highlights the importance of raising public awareness about bioplastics. It calls for educational campaigns and the allocation of funds under the Swachh Bharat Mission to promote the use of bioplastics and support composting initiatives. By enhancing public understanding, the report aims to drive community engagement in waste segregation and composting efforts, helping India move closer to its sustainability goals.
Doubts Revealed
EY -: EY stands for Ernst & Young, which is a big company that helps other businesses with things like taxes, audits, and consulting.
ASSOCHAM -: ASSOCHAM stands for The Associated Chambers of Commerce and Industry of India. It’s a group that helps businesses in India by giving them advice and support.
bioplastics -: Bioplastics are a type of plastic made from natural materials like plants, which are better for the environment than regular plastics made from oil.
capital subsidies -: Capital subsidies are financial help from the government to businesses to reduce the cost of buying things like machines or buildings.
fiscal incentives -: Fiscal incentives are benefits like tax reductions or money from the government to encourage businesses to do certain things, like using bioplastics.
regulatory changes -: Regulatory changes are new rules or laws made by the government to help or control how businesses operate.
R&D -: R&D stands for Research and Development, which is the work businesses do to create new products or improve existing ones.
GST rates -: GST stands for Goods and Services Tax, which is a tax people pay when they buy things. Lowering GST rates means making things cheaper by reducing the tax.
sector-specific schemes -: Sector-specific schemes are special plans or programs made by the government to help certain types of businesses, like those making bioplastics.
bioplastics clusters -: Bioplastics clusters are groups of businesses and factories that work together in one area to make bioplastics.
public awareness campaigns -: Public awareness campaigns are efforts to teach people about important issues, like why using bioplastics is good for the environment.
composting initiatives -: Composting initiatives are programs to help people turn food waste and other organic materials into compost, which is good for the soil.
