Jute packaging order ruins plastic sector

State's loss estimated at Rs 800 crore

The decision of Union minister of textile Shankarsinh Vaghela to implement the Jute Packaging Mandatory Act (JPMA), under pressure from the Leftist parties, has resulted in the closure of six lakh plastic industry units in the country and has seriously jeopardised the interest of the plastic industry in Gujarat.

According to industry estimates, the act has caused over Rs 800 crore annual loss to Gujarat alone, which accounts for over 40 per cent of production of plastic bags in the country.

"The Union textile minister, caving in to the pressure from the Left parties, has ruined plastic industry in the state by banning the use of plastic bags and instead making jute bags compulsory for packaging of food grains and sugar. This decision of the textiles minister has ruined the plastic industry in the state," Saurabh Dalal, state minister of petroleum told Business Standard.

However, he appeared unconcerned about the environmental benefits of using bags made of jute.

A plastic bag costs Rs 10, while the jute bag costs Rs 30. The nation will have to spend over Rs 1,900 crore more due to this decision.

During the rule of NDA government, around 270 members of parliament demanded relaxation of the JPMA as it was ruining the plastic industry in the country, and the demand was accepted. The UPA government, however, reversed the decision taken by the NDA government, and Vaghela made use of jute for packaging mandatory.

"The NDA government wanted to phase the JPMA out and introduce technology mission to the tune of Rs 700 crore. Successive governments had over the years made a concerted attempt at modifying the policy by gradually reducing the ratio of jute bags, used for packaging foodgrains purchased and distributed by the Food Corporation of India (FCI) in favour of high-density polypropylene and polyvinyl bags. We will be representing to the central government to withdraw its decision," said Dalal.

The Gujarat State Plastics Manufacturers Association (GSPMA) and Flat Tape Manufacturers Association have called for a repeal or dilution of the latest notification by the Union ministry of textile to compulsorily use 100 per cent jute in packing foodgrains and 90 per cent for sugar.

"We have urged the Gujarat government to represent the case of a large number of plastic woven sack units, likely to be hit hard by the centre's notification," said Hasmukh Patel, chairman, executive council, GSPMA.

He has urged the government to plead with the Centre to revert the notification to prior-September 28, 2004 notification under the JPM Act of 1987, by which foodgrain could be packed in sacks containing 60 per cent jute and sugar with 50 per cent jute.