The jute industry in India has incurred losses to the tune of Rs 300 crore since 2001 due to an outdated pricing formula for B Twill jute bags adopted by the Bureau of Industrial Costs and Prices (now Tariff Commission) in 2001.
Adding to the woes of the jute industry is the Union textiles ministry which is sitting over the report of the Tariff Commission which the Commission submitted in June 2009, advocating a fair price for B Twill jute bags as demanded by the Indian Jute Mills Association (IJMA).
To change and streamline the existing pricing policy in line with the market conditions, IJMA has time and again approached the Union textiles ministry and the Jute Commissioner for urgent interventions. However, IJMA's appeals appear to have fallen on deaf ears.
The new Tariff Commission's report submitted in June 2009 has strongly supported IJMA's long pending claim on a fair price and revised price for B-twill bags. The commission had undertook the study from May 2007.
It may be noted that the government price for B-twill bags is currently fixed by the Jute Commissioner’s Office (JCO) based on the report of Bureau of Industrial Costs and Prices in 2001.
Based on this report, the Jute Commissioner’s office, the Jute Commissioner's office only takes care of jute cost, pack sheet, jute batching oil, power cost to the extent of power purchased and variation in dearness allowance (DA).
The old pricing formula of B-twill bags fixed by the Jute Commissioner’s Office fails to take into consideration the cost escalation on account of store material, packing material, repairing cost and overheads.
The jute industry has not been reimbursed of this escalated cost by the textiles ministry for the past 8 years and a new, reasonable and justified price has not been given to the industry since 2001. Moreover, as the prices of the B Twill jute bags are fixed on an outdated Tariff Commission's formula of 2001, the jute industry has also been deprived of a price hike of the bags even though the cost of stores and repairs and the packing costs have shot up drastically.
