Industry seeks compensation for businesses hit by single-use plastics ban

With the Centre set to enforce single-use plastic ban from Friday, industry bodies have sought financial support especially for micro, small and medium businesses that will get impacted. The ban is expected to affect between 88,000-1 lakh business units as per various estimates.

The ban will be enforced on 19 products, which have been identified as items of low utility with high littering potential including plastic sticks used in ear buds, balloons and candies, straws,  cutlery items such as cups and plates and packing films on sweet boxes, invitation cards and cigarettes.

Sources said talks with the government officials had also been held on such a compensation mechanism earlier this month.

In its latest representation to the government, PlastIndia Foundation stated that the plastic industry comprises mostly MSMEs, is labour intensive, and involves huge capital expenditure in terms of plants and machinery. Jigish Doshi, President, PlastIndia Foundation said, “These manufacturing units will face unprecedented impact. The Government should extend financial or fiscal support to those manufacturing units, which have heavily invested in standalone plant and machinery, for manufacturing of those plastic products that are being banned.

As per some estimates, close to one lakh registered MSMEs will be impacted due to this ban.

Vinod Kumar, President, India SME Forum said, “These MSMEs need some form of compensation or fiscal support to be able to invest in new machinery to switch to making alternatives. Many units have taken loans from banks and will need to continue making payments even as they shut shop and their existing machinery will become redundant due to the plastic ban.”

He added that even as India bans these plastic items ,there is still potential to export them to other countries but only units located in SEZs will continue to manufacture these products. “Small businesses are not located in SEZs. Overall, there are several issues and we believe the Environment Ministry, Commerce Ministry and the MSME Ministry need to jointly look into the challenges being faced by these businesses.” Kumar said.

Industry bodies have also urged the government that instead of a blanket ban, certain standards in terms of thickness and weight can be set for the items that are coming under the purview of the ban. For instance, the government has already said that only plastic carry bags of more than 120 microns will be allowed from December 31. Industry bodies said that similar distinguishing parameters can be set for items such as plastic cutlery items. In addition, concerns have been raised regarding availability of made-in-India alternatives for banned items such as paper straws.

Jayesh Khimji Rambhia, Co-Convenor of Environment Committee, All India Plastic Manufacturers Association said as per some estimates nearly 88,000 manufacturing units will be impacted due to the single use plastic ban. “We should not rush into banning these items. We need to look into the health impact and affordability of the alternatives. The way project-impacted people are compensated similarly there should be compensation for businesses who get impacted by this policy,” he added.