In a big boost for the jute industry, the Cabinet Committee on Economic Affairs (CEA) has reversed the Union textile ministry’s proposal for 25 per cent dilution in mandatory use of jute bags for packaging of food grains and sugar.
This is for the second consecutive year that the CCEA has turned down the proposal for dilution of the Jute Packaging Materials Act (JPMA), much to the cheer of the ailing jute industry.
According to JPMA of 1987, it is mandatory for the government procurement agencies to go for packaging of food grains and sugar in jute bags compulsorily to an extent of 100 pr cent.
It is believed that the two Union ministers hailing from West Bengal-Finance minister Pranab Mukherjee and Railway Minister Mamata Banerjee played a pivotal role in reversing the dilution proposal.
The political repercussions of the move is also significant as West Bengal goes for the assembly polls in 2011 and the jute industry being a labour intensive industry engages around four lakh workers directly while creating indirect employment for nearly 40 lakh farmers.
In a span of 22 years since the jute sector was protected by the JPMA from 1987, this is for the third time that the Textile Ministry's decision has been reversed, the other two being in 2000 and 2009. This is also the fifth instance of dereservation. The textiles ministry had advanced arguments that production would be lower than consumption and also debunked capacity claims made by the jute industry's representative body Indian Jute Mills Association (IJMA).
According to the ministry, the jute sector is a habitual defaulter on supplies and therefore options should be kept open to use polypropylene and high-density polyethylene sacks for packing food grains and sugar by relaxing JPMA norms to the extent of 25 per cent in 2010 - 11.