Circular Economy

iasparliament Logo
December 30, 2022

Why in news?

The COP27 meet brought to fore a circular economy’s relevance in mitigating carbon emissions by ensuring responsible consumption and sustainable resource management.

What is circular economy?

  • Circular economy - According to the World Economic Forum, a circular economy is “an industrial system that is restorative or regenerative by intention and design.”
  • It is a model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible.
  • In practice, it implies reducing waste to a minimum.


  • Need to switch to a circular economy - The world's population is growing with the demand for raw materials but the supply of crucial raw materials is limited.
  • Extracting and using raw materials has a major impact on the environment.
  • It also increases energy consumption and CO2 emissions.

How does circular economy work?

  • Designs out waste and pollution - Circular economy designs out economic activities that negatively impact human health and natural systems.
  • Keeps products and materials in use - Circular economy favors designing products for durability, reuse, remanufacturing, and recycling to keep materials circulating for as long as possible.
  • Regenerates living systems - Circular economy avoids the use of fossil fuels and non-renewable energy.

What about the picture in India?

  • Rules - In sync with a circular economy, the government formulated
    • Battery Waste Management Rules 2022
    • Plastic Waste Management Rules as amended in 2022
    • e-Waste Management Rules 2022
  • These rules promote utilisation of waste generated by setting out target waste disposal standards for stakeholders along with enabling transactions for extended producer responsibility certificates.
  • Budget - The Budget recognises the action plans formulated across 10 sectors including electronic waste, lithium-ion batteries, end-of-life vehicles, scrap metal, municipal solid waste, etc.
  • They emphasise the importance of reusing secondary materials recovered from waste, implementation of an extended producer responsibility framework and tax rebates.

circulareconomyWhat are the challenges?

  • Lack of clear vision - There is a lack of clear vision towards the end-goal of India’s circular economy mission and gaps in actual implementation of the policies.
  • Reluctance of industries - Industry is also reluctant in adopting the circular economy model due to supply chain limitations, lack of incentives to invest, complex recycling processes.
  • Sub-optimal outcomes - The efforts are made at the very end of value chains, resulting in sub-optimal economic and environmental outcomes.

What more needs to be done?

  • There must be legislative mandates for the procurement of recycled/ secondary raw materials in the initial stages of the production cycle.
  • A streamlined framework on circular economy for providing fiscal incentives to businesses to complete the supply chain will also help.
  • The government’s initiatives need to be in conjunction with industry collaboration to reap the benefits of the circular economy.



  1. The Hindu Businessline | Circular economy
  2. RTS | How does circular economy work?
Login or Register to Post Comments
There are no reviews yet. Be the first one to review.



Free UPSC Interview Guidance Programme