Bengal jute mills' stir losses at Rs 800 crore

The strike in West Bengal jute mills over the past two months has resulted in losses of more than Rs 800 crore.

Industry estimates indicate that the production loss in the mills is to the tune of 2.28 lakh tonne. Further, losses are likely to mount with the dilution of the Jute Packaging Materials Act (JPMA) hanging overhead.

Industry sources said 48 mills in the state, producing 1.20 lakh tonne a month of jute goods, were on strike. The value per tonne is around Rs 35,000.

The strike is a fallout of a dispute on non-fulfilment of obligation on the part of workmen accepting productivity-linked wages and on the part of the mills paying variable dearness allowance, as per the tripartite agreement. The second tripartite meeting between the workers, the management and the West Bengal government failed to reach a consensus and an intervention from the central ministry could not be ruled out, the sources said.

Prices of raw jute have dropped by around Rs 1,500 a tonne to Rs 1,350 a quintal and could be further affected unless work is resumed. "The loss to the farming community will be immense with the drop in demand for raw jute," said the sources.

Around four million families of farmers are associated with the industry, which employs 2.2 lakh workers in the state and 10,000 new workers every year, on an average. The state jute industry generates over Rs 4,000 crore revenues.

There is more to the Rs 800 crore loss. Neighbouring countries such as Nepal and Bangladesh are reaping the benefits of this industry-wide strike, industry representatives said.

Nepal is on a massive expansion drive, importing jute from India and Bangladesh and converting them into jute goods, ironically selling mostly to India, they added.

Imports from Bangladesh are also understood to have increased. The industry sources further said procurement season for food grains was also on and unless the strike was immediately called off, the JPMA could be further relaxed, which was already diluted by the Gujarat High Court.

The Indian Jute Mills Association challenged the dilution with the Appellate Authority and the strike could impact the case, the industry members felt.