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 foodgrain and sugar.
This is for the second year in a row that 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 pack foodgrain and sugar in jute bags.
It is believed that the two Union ministers hailing from West Bengal –Finance minister Pranab Mukherjee and Railways Minister Mamata Banerjee – played a vital role in reversing the dilution proposal.
The political repercussions of the move are also significant, as West Bengal goes for assembly polls in 2011. The jute industry is labour-intensive and engages around 400,000 workers directly, while creating indirect employment for nearly four million 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 proposal was turned down earlier in 2000 and 2009.
This is also the fifth instance of dereservation. The textiles ministry had argued that production would be lower than consumption and also debunked capacity claims made by the jute industry representative body Indian Jute Mills Association.
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 foodgrain and sugar by relaxing JPMA norms to the extent of 25 per cent in 2010-11.
The earlier routine annual term of JPMA expired on July 30, but no extension was given as the matter was being debated by the Jute Commissioner's Office under the ministry.
