 "Jute sector in crisis as Punjab cracks down on mills")
The Punjab government’s decision to blacklist seven jute mills of West Bengal and abruptly halt supplies from seven other mills has landed the jute industry in a soup.
The move by Punjab, biggest buyer of jute bags, was on the basis of a complaint filed by a whistleblower, who pointed to the supply of poor quality, second-hand bags by some jute mill owners. The complainant alleged this had perpetrated a scam to the tune of Rs 2,000 crore a year.
While the Punjab government has already ordered a probe into the matter, the jute industry is headed for a crisis with eight mills shutting and many others staring at a closure. The closure of eight mills has led to 50,000 workers losing their jobs.
Punjab is the largest purchaser of jute bags in each rabi and kharif seasons for packing foodgrain. About 50 per cent of jute bags manufactured in the country and supplied to the government are purchased by Punjab.
The jute industry has the capacity to manufacture about two million tonnes of jute bags every year, valued at Rs 10,000 crore.
The whistleblower had also sent the complaint to Prime Minister Narendra Modi pointing out that 14 jute mills were selling second-hand, used and inferior bags at almost double the original price, resulting in a loss of around Rs 2,000 crore annually to the government exchequer. The accused mills are Angus Jute Works, Samnugger Jute Factory Co, Bally Jute Co, Ambica Jute Mills, Baranagar Jute Factory, Kankinara Jute Mill, Ganges Jute, Hastings Jute Mill, India Jute Mill, Delta Jute Mill, RDB Textiles, Rameshwara Jute Mills, Shree Gouri Shankar Jute Mills, and North Brook Jute Mill.
The jute commissioner is understood to have taken up the matter with the Punjab government and the Union food ministry.
Punjab had been defaulting on jute bag orders for the past three months. While the state was supposed to purchase 700,000 bales (300,000 tonnes) of jute bags in the past three months, they have purchased only 300,000 bales or about 100,000 tonnes. The jute industry has the capacity to supply 300,000 bales of jute bags each month.
The move by Punjab, biggest buyer of jute bags, was on the basis of a complaint filed by a whistleblower, who pointed to the supply of poor quality, second-hand bags by some jute mill owners. The complainant alleged this had perpetrated a scam to the tune of Rs 2,000 crore a year.
While the Punjab government has already ordered a probe into the matter, the jute industry is headed for a crisis with eight mills shutting and many others staring at a closure. The closure of eight mills has led to 50,000 workers losing their jobs.
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“This is very unfortunate. We have not received a single complaint from the Punjab government. The Indian Jute Mills Association (Ijma) has marked its strong protest against the decision. No miller should be penalised without a thorough enquiry and an opportunity of fair trial,” said Sanjay Kajaria, owner of a leading jute mill and former chairman of Ijma.
Punjab is the largest purchaser of jute bags in each rabi and kharif seasons for packing foodgrain. About 50 per cent of jute bags manufactured in the country and supplied to the government are purchased by Punjab.
The jute industry has the capacity to manufacture about two million tonnes of jute bags every year, valued at Rs 10,000 crore.
The whistleblower had also sent the complaint to Prime Minister Narendra Modi pointing out that 14 jute mills were selling second-hand, used and inferior bags at almost double the original price, resulting in a loss of around Rs 2,000 crore annually to the government exchequer. The accused mills are Angus Jute Works, Samnugger Jute Factory Co, Bally Jute Co, Ambica Jute Mills, Baranagar Jute Factory, Kankinara Jute Mill, Ganges Jute, Hastings Jute Mill, India Jute Mill, Delta Jute Mill, RDB Textiles, Rameshwara Jute Mills, Shree Gouri Shankar Jute Mills, and North Brook Jute Mill.
The jute commissioner is understood to have taken up the matter with the Punjab government and the Union food ministry.
Punjab had been defaulting on jute bag orders for the past three months. While the state was supposed to purchase 700,000 bales (300,000 tonnes) of jute bags in the past three months, they have purchased only 300,000 bales or about 100,000 tonnes. The jute industry has the capacity to supply 300,000 bales of jute bags each month.