Representative picture. Source Freepik

As India accelerates its shift toward circular economy solutions, Goa’s upcoming Deposit Refund Scheme (DRS) is emerging as a closely watched pilot. Designed to tackle non-biodegradable beverage packaging through a digitally enabled, stakeholder-inclusive framework, the initiative is being positioned as a potential template for other states.

Anthony D’Sa, former Chief Secretary of Madhya Pradesh and Chairman of the Scheme Administrator Committee, outlines the system architecture, on-ground readiness, and broader implications for India’s waste management ecosystem.

“The scheme targets non-biodegradable packaging materials—glass, PET, aluminium, and multi-layered plastic. It adapts international models to India’s highly complex and decentralised waste ecosystem. Goa’s DRS model involves key stakeholders across the waste value chain, including manufacturers, consumers, and the informal waste economy.”

He highlights four foundational design choices underpinning the scheme:

Digital traceability via unique QR codes:

DRS will utilise unique QR codes on product labels to track the lifecycle of each non-biodegradable package from production to recycling. This creates a transparent, fraud-resistant data trail that enables consumers to claim refunds and manufacturers to secure Extended Producer Responsibility (EPR) credits.

Strategic collection network with RVMs and collection routes:

Goa’s hybrid DRS model will deploy Reverse Vending Machines (RVMs), where consumers can deposit packaging and receive instant refunds, alongside manual collection centres equipped with hand-held devices. Dedicated collection routes will serve bulk generators in the hotel, restaurant, and tourism sectors.

Integration of the informal sector:

Deposits may be claimed by any individual returning eligible packaging, allowing scrap dealers and waste pickers to participate and earn fixed values per container. This approach helps formalise all waste management actors, including informal waste pickers and scrap dealers.

Financial settlement via UPI integration:

When consumers scan the QR code at return points, deposits will be refunded instantly to their UPI accounts, eliminating the cash-handling burden for small retailers.

Closing the gaps in EPR compliance

D’Sa emphasises that the DRS is designed to complement and strengthen India’s existing EPR framework.

“Under current national EPR rules, brands often meet targets by purchasing certificates from recyclers that may lack physical material traceability. Moreover, EPR credits are often location-agnostic—a brand can collect plastic from another state to offset sales in Goa, leaving tourist hotspots with unmanaged litter and no dedicated clean-up funding.”

He notes that Goa’s model directly addresses this gap. “Goa’s DRS provides digital traceability of every DRS package introduced into the Goan market by tracking movement at every point of sale and use through unique QR codes. This data will be integrated with the Central Pollution Control Board (CPCB) portal, offering manufacturers robust, transparent, and audit-ready proof of recycled content while ensuring geographic alignment between consumption and recovery.”

D'sa further adds that the DRS creates shared public infrastructure—collection points, RVMs, material recovery facilities (MRFs), and onboarded verified recyclers. Instead of brands building individual, capital-intensive take-back systems under the national EPR framework, they will pay annual fees to access this unified network, significantly lowering collection costs while ensuring full legal compliance.

Infrastructure rollout gains momentum

On implementation readiness, D’Sa says the immediate focus is identifying locations for the initial 350 RVMs, with at least one planned in every panchayat area. Some panchayats will host multiple machines based on population density and tourist footfall, while towns will see significantly higher deployment. The machines are already under manufacture, and collection routes are being finalised.

The backend ecosystem is being built in parallel. A network of collection hubs is being established for secondary sorting and baling of returned materials. In high-tourism zones, reverse logistics are being streamlined through partnerships with existing waste management bodies and local village panchayats.

Cleaner feedstock for recyclers

For recyclers, the scheme could significantly improve material quality.

“Indian recyclers often struggle with contaminated waste from mixed streams or landfill sourcing. Under DRS, the entire supply chain will shift toward source-segregated, high-purity waste streams,” says D’Sa.

He explains that direct returns by consumers and waste pickers will reduce contamination. The structural integrity and homogeneity of materials will improve, enabling recyclers to produce higher-value outputs while reducing the need for energy-intensive processing.

Industry transition underway

Preparations are underway for brand owners, bottlers, and retailers through phased technical integration. Brand owners and bottlers are updating labelling lines to incorporate the serialised QR codes required for the Goan market.

On the financial transition, D’Sa notes the system shifts from variable collection costs to a predictable per-unit deposit prepaid into a central escrow account. Retailers are being sensitised to their role in deposit collection and refund processing alongside consumer awareness efforts.

He adds that the digital, UPI-based refund mechanism helps ease retailer concerns around cash flow and small-change handling, though the transition will initially require inventory management adjustments.

Formalising waste pickers

A central pillar of the scheme is informal sector inclusion. D’Sa notes that waste pickers currently sell PET bottles or aluminium cans by weight, where prices are often low and volatile. Under DRS, the value is fixed to the deposit amount per unit, typically higher than the raw scrap value.

Any individual—including waste pickers—can return DRS packaging in bulk to designated centres and claim the fixed deposit per container, effectively earning more for the same effort. The scheme also provides for registration of waste pickers, scrap dealers, and kabaadi networks with Aadhaar-linked identities and bank accounts, formalising Goa’s informal waste sector and positioning waste pickers as authorised logistics partners.

Ambitious return targets

The scheme has set clear recovery milestones. D’Sa says the mandated minimum return rate for the System Operator is 50% by year two, rising to 90% by year four. He believes actual recovery could exceed targets even in the first year.

He encourages other states to replicate the model, noting that wider adoption will simplify supply chain management for manufacturers. He also advises states to prioritise three areas: robust stakeholder consultation and transition timelines; digital integration of DRS data with national and state CPCB portals to prevent double counting of EPR credits; and adoption of a hybrid return network combining manual centres and RVMs. Such a model, D'sa says, ensures infrastructure readiness and consumer convenience while enabling kirana stores and local scrap dealers to become certified collection points even in rural or low-tech environments.

Advances are underway, but challenges remain

Commenting on the scheme, Manguirish Pai Raikar, past president of the Goa Chamber of Commerce, says: “The Deposit Refund Scheme being introduced in Goa appears promising on paper and can significantly improve waste collection if implemented properly. However, its success will depend on resolving practical challenges, especially in a tourist-driven state where consumers may not return to the same point of purchase to claim their deposit. For the system to work effectively, Goa must ensure widespread access to return infrastructure—such as bins and machines—so consumers can conveniently dispose of recyclables anywhere. Alongside the DRS rollout, strong enforcement against littering and sustained public awareness will be critical. If implemented with adequate coverage, flexibility, and incentives, the scheme can meaningfully reduce the volume of waste reaching landfills.”

Similar concerns were also echoed by the Goa Waste Management Association, which believes that the scheme will address less than 5% of the roadside garbage. They suggest the inclusion of sanitary waste in the scheme to resolve the issue of roadside garbage.

“The price of plastic bottles could increase under the deposit refund system, as consumers would pay an additional amount upfront with the expectation of receiving it back. While a refund mechanism may be in place, the need to visit collection centres and claim the deposit could be inconvenient for some consumers. It is also not yet clear who would bear the cost of establishing and operating the required infrastructure.

Another aspect that merits attention is the potential impact on livelihoods. At present, high-value recyclable waste is largely collected by local waste pickers. If operations become more centralised under the new system, it could affect the informal sector, with an estimated 3,000 to 5,000 waste pickers potentially impacted,” says Clinton Vaz, the President of Goa Waste Management Association and the founder of VRecycle.