The cabinet committee on economic affairs (CCEA) has approved the textile ministry’s proposal for 60% dilution in the mandatory Jute Packaging Materials Act (JPMA) of 1987 for packing sugar in 2012-13. The committee has also allowed 10% dilution in JPMA for packing food grains. The Act directs all sugar factories to use jute bags for packing sugar to the extent of 100%. The committee is expected to issue an order regarding this early next week.
The total quantity of jute bags required for packing food grains and sugar stands at 14 lakh tonne for the jute year 2012-13. The ministry of textiles in its note circulated to the Cabinet said that there was a demand-supply gap. Out of the 14 lakh tonne jute bags, 10.67 lakh tonnes would be required for packing food grains (the projected requirement for kharif season is around 6.34 lakh tonnes and for the rabi season is around 4.33 lakh tonnes) and 3.33 lakh tonne for packing sugar.
The note stated that installed capacity (for sacking) of the jute industry is 15.02 lakh tonne for the year. At the moment, 10 mills remain closed whose total capacity is around 1.5 lakh tonne, which would bring it down to about 11 lakh tonne. The textile ministry added that accessibility of a reliable and secure market with guaranteed returns has acted as a restriction for the jute industry which has not adequately expanded into non-reserved sacking and non-sacking items.
The total availability of raw jute stands at 132 lakh bales. The dilution will reduce the orders of most jute mills, thereby indirectly affecting workers employed at these mills. Nearly 2.5 lakh workers will go through as 54 jute mills will be forced to reduce work shifts and insist on job cuts. Further, if the dilution is done the jute industry is expected to suffer a blow of nearly Rs 1,500 crore.
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