 "Jute industry may lose govt support")
The ailing jute industry is in for fresh trouble if the recommendations of the Jute Commissioner are to be considered seriously.
The Jute Commissioner Subrata Gupta has indicated at lifting of government support for the industry, citing that it has become stagnant, unproductive and inefficient due to over dependence on jute sacks.
Since 1987, the jute industry is enjoying government patronage under Jute Packaging Materials Act (JPMA), 1987. The Act mandates 100 per cent reservation for jute bags for packaging of food grains and sugar by government procurement agencies.
Moreover, the sector's capacity is also impacted and highly stressed on account of non-availability of raw jute in time and labour crunch. The Commissioner indicated the factors are enough to derail and destabilize the sector in future. Jute sector analysts feel, based on the Commissioner's view the government may scrap, dilute or de-reserve JPMA in the coming days. The 12th Planning Commission now, NITI Aayog and the National Fibre Policy 2011 had already recommended phasing out of JPMA.
According to the Commissioner, the industry should not be supported in a way so that it becomes Rs inefficient'. Raghav Gupta, chairman of Indian Jute Mills' Association (IJMA) denied knowledge of any such recommendation by the Jute Commissioner. "The Jute Commissioner has backed our cause for mandatory reservation. He has not made any indication or recommendation for lifting government support to the jute industry."
It may be noted that the jute industry's 10 year CAGR (compounded annual growth rate) is less than 0.1 per cent.
Gupta is in favour of an export subsidy to revive the sagging Indian jute sector.
Bangladesh offers 10 per cent export subsidy on jute including 7.5 per cent on export yarns. India exports almost two lakh tonne of jute goods valued at around Rs 2000 crore. In terms of volume and value, Bangladesh is twice India's exports.
The Jute Commissioner Subrata Gupta has indicated at lifting of government support for the industry, citing that it has become stagnant, unproductive and inefficient due to over dependence on jute sacks.
Since 1987, the jute industry is enjoying government patronage under Jute Packaging Materials Act (JPMA), 1987. The Act mandates 100 per cent reservation for jute bags for packaging of food grains and sugar by government procurement agencies.
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But Gupta has pointed out that despite protection from the enabling legislation, production, consumption and export of jute goods have stagnated for the past three to four years. Also, the industry has not been able to scale up production or export of jute goods. Gupta is likely to voice his opinion at the upcoming meeting of the Standing Advisory Committee on Jute on June 9.
Moreover, the sector's capacity is also impacted and highly stressed on account of non-availability of raw jute in time and labour crunch. The Commissioner indicated the factors are enough to derail and destabilize the sector in future. Jute sector analysts feel, based on the Commissioner's view the government may scrap, dilute or de-reserve JPMA in the coming days. The 12th Planning Commission now, NITI Aayog and the National Fibre Policy 2011 had already recommended phasing out of JPMA.
According to the Commissioner, the industry should not be supported in a way so that it becomes Rs inefficient'. Raghav Gupta, chairman of Indian Jute Mills' Association (IJMA) denied knowledge of any such recommendation by the Jute Commissioner. "The Jute Commissioner has backed our cause for mandatory reservation. He has not made any indication or recommendation for lifting government support to the jute industry."
It may be noted that the jute industry's 10 year CAGR (compounded annual growth rate) is less than 0.1 per cent.
Gupta is in favour of an export subsidy to revive the sagging Indian jute sector.
Bangladesh offers 10 per cent export subsidy on jute including 7.5 per cent on export yarns. India exports almost two lakh tonne of jute goods valued at around Rs 2000 crore. In terms of volume and value, Bangladesh is twice India's exports.