Life of an Unsung Hero

‘Paryavaran Mitra’

&

The Way Forward

Project Conceived

By:

Year: 2014-2015

Rag Picking In India

India‘s booming urbanization comes with the overwhelming problem of waste

management. As more people migrate into the major cities, the amount of waste increases at

a rapid pace, resulting in the critical issue of how to manage waste. Rag pickers play an

important but usually unrecognized role in the waste management system of Indian cities.

According to World Bank, rag pickers form two percent of most city populations. In

Ahmedabad their their census is more than 40,000i. Rag picking ranks lowest in the hierarchy

of urban informal occupations and a large number of those employed in this occupation are

women and children. Rag pickers are predominantly illiterate, unskilled and/or migrants,

belonging to the lowest in the caste hierarchy and the poorest of the poor, as they are

unable to find any other kind of employment. Currently, many of them collect waste from

landfills dotting urban spaces.

Generally, there is no employer-employee

relationship in this trade even though

contractors sometimes organize the rag picking

activity. Rag pickers are self-employed workers

with no formal or legal relationship with the

municipality or the recyclable traders. Rag

pickers suffer from occupational related health

issues such as muscular-skeletal problems,

respiratory and gastro-intestinal ailments. They

also face regular harassment and extortion

from the police, the municipal authorities and

antisocial elements. No social security benefits

are available to workers in this sector.

Manav Sadhna’s endeavour is to bring positive

changes in the lives of rag picker women,

situated in Rampir No Tekro, Ahmedabad

through the project discussed below.

Manav Sadhna

Manav Sadhna is a non-profit organization based in a quiet corner of Mahatma Gandhi’s

Ashram in Ahmedabad. Our humble mission is to serve the underprivileged. At Manav

Sadhna we navigate with the philosophy to love all, serve all. By seeing God in every

individual (Manav), mere service is transformed into worship (Sadhna). To this end, Manav

Sadhna is engaged in constructive humanitarian projects that cut across barriers of class and

religion while addressing issues faced by socio-economically neglected segments of society.

In executing this mission, Manav Sadhna is guided by Mahatma Gandhi’s unshakable beliefs

in love, peace, truth, non-violence and compassion.

Today, Manav Sadhna serves more than 8000 children and women through more than 35

projects. We also indirectly touch the lives of many more individuals through our healthcare

and supplementary education projects. The projects are created based on the needs and

participation of the community.

Manav Sadhna has partnered with more than 20 reputed organisations in the pursuit to better

serve the unprivileged.

Rampir No Tekro

One of the communities where Manav Sadhna has been working is Rampir No Tekro,

situated opposite the Gandhi Ashram. Nearly 150,000 people, mostly belonging to scheduled

castes, reside in this slum community. Over the years, through efforts in hygiene, sanitation,

value-based education, women’s empowerment, health, awareness, and community building

and other various initiatives, Manav Sadhna has been working towards the holistic

development of the community.

In the 25 years that Manav Sadhna has been working at the grassroots level, it has observed

that women are the most vulnerable of all the social groups. Women not only take care of the

households but they also contribute equally towards the income generation for the family.

However, since most of women are illiterate, they often face exploitation in various forms.

They also start working at a very young age and generally fall ill with time because of poor

working conditions. On a positive note, through Manav Sadhna’s efforts towards socio-

economic improvements, many women have realized the importance of education. As a

result, they are making sincere efforts to educate their children.

Rag Picker Women Of Rampir No Tekro: “Paryavaran Mitra”

Women in the community are involved in a variety of income generating activities such

cooking and cleaning homes, sewing and hand work, daily labour, rag picking, etc. We are

focusing on the rag pickers, as they constitute a large number of the women (more than

1500), with the focus to improve their working conditions and overall quality of life.

A considerable percentage of rag picker women are widows or their husbands do not work,

but engage in other illicit activities.

On an average, these women’s daily earnings are Rs. 85-110, out of which they spend as

much as 25- 30 % on fuel wood itself. Since the sector is highly unorganized, the working

conditions are very poor. They do not have the

proper equipment or supplies, often leading to

chronic back and knee pain along with

respiratory and heart related issues. The money

earned is hardly sufficient for their daily

existence and results in their dependency on

Kabadiwalas for a small loans (upto Rs 10,000

@0%) and Baniyas (merchants) for large loans

(>10,000 @10% per month).

The work of rag picking in itself is a service to

the society. Due to these women’s labour, a

large amount of waste reaches the recycling

industries rather than dumpsites. At dumpsites,

the waste is neither segregated nor sent for

further recycling. Instead, the waste is either

burnt or left to rot, which in turn releases

harmful gases. The process of burning also emits

highly toxic gases, thereby polluting the

environment. By collecting waste, rag pickers are contributing directly towards a Greener

Environment. Therefore, we choose to refer to them as ‘Friends of the Environment’ or

‘Paryavaran Mitra’ (PMs).

India’s Laws And Policies In Context Of Waste Managementii

The Municipal Solid Waste (Management and Handling) Rules passed in January 2000

mandated a comprehensive policy for collecting, handling and managing solid waste. The

Rules direct 41 Class I municipalities to extend their mandatory responsibility (collection

from common points) and undertake measures for doorstep collection of waste and citizens’

education for source segregation.

Although the Rules do not specifically mention rag pickers, they are explicit in offering a

wide range of choices to the municipalities in the systems that they may want to adopt

depending upon local conditions. Contracting out the system of doorstep garbage collection,

partly or fully, to both local and multinational operators is the most popular because there is a

strong lobby that believes that privatisation of garbage collection is cheaper and more

efficient. Frequently these measures displace rag pickers as the contracting party now has

direct control over the waste and its disposal.

Current Value Chain Of Recyclable Wastes:

Based on the detailed study conducted by students of the Institute of Rural Management,

Anand (IRMA) in 2013 and various reports available online, it is clear that only two kinds

of value addition are happening in the whole chain of plastic waste management (from

plastic littered on the roads to the plastic that reaches the recycling unit). These include

volume accumulation of segregated waste (done by Kabadiwalas) and the cleaning and

drying of the plastic waste (done by third party vendors). In the case of paper, only volume

accumulation takes place at different levels.

As a result of these two simple processes, the monetary worth of the plastic collected by the

PMs increases from Rs.5-6/kg (earned by the PMs) to Rs.23-25/kg (earned by the Dealer for

delivering cleaned plastic). Recycling units use this cleaned plastic as raw material. Whereas

in the case of paper waste, the price does not increase drastically as no processing is done.

The price increases marginally from Rs3-4/kg (earned by the PMs) to Rs.7-8/kg (earned by

the Dealer after the segregation and volume increases). Most recycling units cannot directly

use the paper collected from the roadside, and so, only a limited gain is available on volume

accumulation.

There are some issues in the relation of the Kabadiwalas and the PMs. Although the KBWs

support the PMs whenever they need of money, they also take unfair advantage in other

situations. First, a major portion of the waste collected by the PMs can only be sold to the

KBWs. They also give the PMs a relatively lower rate for their waste as compared to the one

Pary

av

ara

n M

itra

(PM

)

•Goes late-night for collecting waste from roadside/stations/public dustbins etc.

•Faces security problems from people as well as stray animals.

•Segregatescollected waste into paper/plastic at home .

•Sells at Rs.5-6/kg for plastic and Rs.3-4/kg for paper.

Kab

aad

iwala

(K

BW

)

•Purhcases the segregated waste from the PM on daily basis.

•Earns a margin as they have much higher volumes and do further segregation.

•Lends money to PM not on interest but with some indirect conditions.

•Sells plastic at Rs.9-10/kg and paper at Rs.6-7/kg.

Deale

r(D

)

•Purchases the accumulated and hightly segregated plastics from KBW.

•Gives the plastic to 3rd party for value addition like cutting and cleaning (3rd party charge Rs.8-10/kg).

•This increaeses the quality of plastic as a raw material to a great extent .

•Selling price is Rs.23-25/kg. No similar thing for paper.

Recy

cle

r (R

)

•Purchases the final clean recyclable plastics from dealer.

•Converts this to granules or plastic bricks, which are used by various plastic industries as raw material.

•Selling price is Rs.40-50/kg range. For paper the selling price is nearly Rs.10-12/kg.

prevailing in the market. Also, the machines used by the KBWs are rigged to measure less

weight, thereby giving them a cost benefit.

We have also identified a huge information assymtery for the PMs as they do not even know

where their collected waste goes or how much they could earn through simple value addition

to the waste they collect.

Proposed Business Model

In order to overcome the prevailing issues and to bring about some socio-economic

development in the lives of PMs, we propose the following business model:

Since the increase in volume of waste is one of the components for increasing returns, the

main idea is to bring PMs into a cooperative group wherein they can combine and accumulate

segregated waste. As soon as they are in a group, the volume will increase automatically.

The registered group will have a name that will become the identity of the PMs. We will

issue them identity cards, which will make them official persons for collecting waste. They

will no longer face issues related with their identity thus bringing about a major social

change in their life.

PMs will also receive proper equipment, such as coats, gloves, mouth coverings, torch lights,

identity cards etc., for carrying out their work. This will not only ensure improved health but

also improve their work productivity.

The other component of our plan is to add value to the collected waste by including the

cleaning and drying process. For this, a processing facility will be opened in the community

which will be run by these PMs wherein the complete process of second tier segregation,

washing, cleaning, drying and bailing will take place. The cooperative members will hire

formal executives to manage this processing facility. After the processing, the waste is ready

to be sold as raw material to the recycling industries.

We will develop market linkages with various recyclers and agencies working with waste,

which will directly purchase this clean recyclable waste from PMs’ cooperative. Agencies

like WOW, Odhisa Recyclers’ Association etc., are ready to purchase this clean waste from

PMs’ cooperatives. The monetary worth of plastic will increase from Rs.5-6/kg to Rs.23-

25/kg after completing the above-mentioned steps. In the case of paper, the price increases to

just Rs.7-8/kg from Rs.3-4/kg since no processing advantage exists as of now.

Recyclers’ Association

Agencies like WOW or

Let’s Recycle

PMs Cooperative Market Linkages

A large part of this increased monetary worth will trickle down to the PMs after taking care

of the expenditures of the cooperative. This increase of Rs.30-40/day will bring some

financial stability in the life of the PMs.

In phase two, the cooperative itself will convert this waste into the granules, which can then

be sold at nearly Rs.50-55/kg to the industries making pipes, buckets etc. The members can

take care of the many governmental schemes available to cooperatives. Insurance/loan

facilities of different kinds such as health and education can be introduced. They can start a

saving-lending mechanism among themselves, thereby minimizing their dependence on

KBWs and Baniyas for the money they need now and then. Municipalities are also looking

for agencies that can do the work of collecting waste from homes/societies on their behalf.

This will also enable them to get better quality paper, which they are not getting now, further

enhancing the monetary worth of the waste they are collecting.

Please note that Manav Sadhna will play a supportive role in this project as the PMs will own

and run the cooperative. Manav Sadhna will initiate the process and then slowly phase out.

Financial Feasibility

We are considering 50 PMs for the pilot project and after conducting financial feasibility

tests, we found that there will be an increase in income of nearly Rs.30-40/day for each PM.

This increased Rs.30-40/day will accumulate to nearly Rs.1000/month, which is a substantial

amount for a PM for bringing small meaningful changes into their lives. The main change we

are aspiring is the social status and recognition that they will get by coming into a

cooperative. This project would transform the lives of these 50 women in every possible

aspect be it health, financial, social or other.

Please find below an expected cash flow statement of the PM cooperative on a monthly basis.

Assumptions:

1. There are 50 PM in the pilot project, each collecting nearly 20kgs of the final

segregated waste on a daily basis.

a. The cooperative is paying each PM nearly Rs.7.5/kg of waste. So, on a

monthly basis the total figures comes out to be 50PM* 20kg/PM-

day*Rs.7.5/kg* 30days= Rs. 2,25,413/month

b. The cooperative is receiving nearly Rs.13/kg by selling the processed waste in

the market. So, on a monthly basis the income made by selling the waste is

50PM* 20kg/PM-day*Rs.13/kg* 30days= Rs. 3,39,000/month

2. Being a section-25 company, the cooperative group is exempted from tax.

3. The average life of the equipment purchased is calculate to last 2 years as the

processing facility will be functioning on a double shift basis.

The surplus generated can be used as follows:

1. For the benefits of the cooperative members

2. For other projects in the community

3. For repaying the donors, in case monetary returns are expected out of the project

Rs. 20 lakh is required as the starting cost of this project. This budget includes:

1. The cost of purchasing the land where the processing facility will be set up. There is

economic rationale behind purchasing the land rather than leasing it out. The total cost

of leasing land will exceed the cost of actually purchasing land within a short period

of 5 years.

2. Cost of equipments used for both processing the waste like blowers, cutting

equipment, and weighing machines as well as gloves, masks and other supplies

needed by the PMs to improve hygiene and sanitation of the waste collection process.

3. The amount required to pay the outstanding loans of PMs taken from Kabadiwalas

and Baniyas. We are calculating an average of Rs.7,500 per PM as the outstanding

debt.

Also, the cooperative will keep Re.1/kg as their retained earnings. This amount will be used

towards cooperative requirements such as stationary, telephone bills, etc. We will recruit two

Monthly Rs.

Income

Net Sales ( 50PMs*20Kg/PM-day*30days*Rs.13/kg) 3,90,000

Operating Expenses

COGS (Rs/Kg of recyclable plastic)) @Rs 7.5/Kg 2,25,143

Wages at Rs 150/day/worker-8 workers in 2 shifts 72,000

Cost of Water and Electricity during cleaning and drying @ Rs. 30-35/day 3,000

Cost of Raw Materials - Soap, Salt,Wire etc. @ Rs.450/day 13,500

TOTAL 3,13,643

Selling, General & Administrative Expenses

Salary to 2 Executive@Rs.15,000/executive 30,000

Transportation-Sales(Emergencies) 6,000

Miscellaneous Expenses 15,000

Repairs and maintenance 600

Electricity Expenses 1,500

TOTAL 53,100

PBDIT 23,257

Depriciation (Life of equipment is considered 2 years) 3,208

PBT 20,049

Surplus over Expenditure 20,049

full time professionals along with eight working staff for the smooth operation of the

processing facility. They will be working on a double shift basis.

So, we believe that there is immense potential in this project both financially and socially. It

can successfully bring the required change in the lives of the PMs. After the implementation

of the project, the women will not only be earning better, but more importantly, they will

shift from being an unidentified person to a legitimate individual with an important role in

society, an identity that would boost the confidence of any human being at large.

i http://www.solidar.org/IMG/pdf/d3_india-social_protection_final.pdf

ii www.wiego.org/informal_economy_law/rag pickers-india