The Telegraph
Tuesday , June 10 , 2014
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Jute seeks measures to regain lost glory

Changes in jute packaging material act
Introduction of export policy
Upgraded tariffs and modernisation programme
Revised formula for pricing jute bags

Calcutta, June 9: Jute mill owners are in favour of policy changes by the Narendra Modi-led government to revive the ailing industry.

The Indian Jute Mills Association (Ijma) chairman Raghavendra Gupta has written to Union textile minister Santosh Kumar Gangwar on May 27 for an appointment.

The association plans to apprise the minister of the need for policy changes, particularly those relating to the jute packaging material (JPM) act. They will also seek the introduction of an export policy and an upgraded tariffs and modernisation programme.

In his letter to the minister, Gupta said the meeting was for a “brief introduction regarding the serious problems of the jute sector”.

“One of the key policy issues for the industry is the fate of the JPM act. The Planning Commission has recommended the gradual phasing out of the act, but the industry’s sustainability depends on its survival,” Sanjay Kajaria, former chairman of the Ijma, said.

The JPM act initially made it 100 per cent mandatory to use jute bags for packing foodgrains and sugar. However, cheap plastic bags have now emerged as an alternative.

Another blow to the jute industry came when the cabinet committee on economic affairs set the mandatory packing limit in jute bags to 90 per cent of foodgrains between July 2013 and June 2014. It has also lowered the extent of packaging of sugar to 20 per cent from 40 per cent in the previous year.

Kajaria said the industry could benefit from an export policy that offered subsidy on the export of jute goods.

“Bangladesh offers a cash subsidy of around 10 per cent,” he said, adding that such a subsidy will allow the industry to compete with exports on the pricing front.

The industry is also looking at a revision of the pricing for jute bags. The present pricing of bags was based on a formula set in 2001 and has not been revised despite several attempts.

The industry has sought a revised formula based on the current wages of labourers, price of raw jute and other expenditure side components. Kajaria said the benefit to the industry could be around Rs 3,000 per tonne.

According to Kajaria, the industry is also looking forward to the reforms in the Food Corporation of India, which is a key government food procuring agency that places orders for jute bags.