Calcutta, Sept. 23: The Indian Jute Mills Association (Ijma) today said the jute industry was faced by the threat of extinction due to the dilution of the Jute Packaging Materials Act (JPMA).
The Act promulgated in 1987, made use of jute mandatory for packing of food grains, sugar and other commodities.
The government has recently ordered dilution of the Act, and other materials can be used to pack up to 20 per cent of food grains, and 25 per cent of sugar.
But the industry feels, those thresholds are not enforceable.
“It’s like repealing the Act altogether,” former Ijma chairman Sanjay Kajaria said.
Most of the 59 jute mills would close down by March next year, experts said in a press meet here today. Jute baron Arun Bajoria said the government had signed the “death certificate” for the industry.
There would be no alternative to closing down the mills as demand for jute bags would decline by at least 15 per cent across all items once the Act was diluted, said Ijma chairman R. K. Poddar.
The industry employs over 40 lakh farmers and more than 2.5 lakh workers. “Unless the government’s order for the dilution of the Act is withdrawn, the industry and its dependants would face disaster,” Poddar added.
Inventory had started going up, and the price of raw jute had already fallen below the government-administered minimum support price (MSP), industry experts said. Of the total jute consumption of 16 lakh tonne, 15 lakh was in the form of bags.