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Ministry trashes jute mills' capacity claims

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Jayajit Dash Bhubaneswar

IJMA had claimed mills can meet the demand for the year.

In a blow to the jute industry, the Union textiles ministry has said that claims about manufacturing capacity made by the Indian Jute Mills Association (IJMA), the apex body of the jute industry, are unrealistic.

A note prepared by the Jute Commissioner’s Office (JCO) pointed out that almost 70-75 per cent jute mills operated below the norms of the Jute Manufacturers’ Development Council (JMDC). The note will be placed for approval at a meeting of the Cabinet Committee on Economic Affairs (CCEA) to be held soon.

Protesting the proposal made by the Standing Advisory Committee of the Centre for 25 per cent dilution, IJMA said there were no capacity constraints and the jute industry was equipped to meet the packaging requirement of government procurement agencies in 2010-11.

 

However, according to the JCO note, the sacking capacity shown by IJMA is not attainable because of machinery imbalance and bottlenecks. While IJMA said the jute industry had an installed capacity of 1.5 million tonnes jute bags, JCO said the actual capacity was 1.18 million tonnes per year.

Backing its stand for a 25 per cent dilution in favour of plastic bags in the current financial year, the Union textiles ministry has said that it is being done in the interest of the economy and is in conformity with the National Jute Policy 2005.

According to the Jute Packaging Materials Act (JPMA), it is mandatory for government procurement agencies to go for 100 per cent jute packaging for foodgrain and sugar. In 2009-10, the ministry had made a similar recommendation for dilution. However, it was reversed at a CCEA meeting in September 2009 on the intervention of Finance Minister Pranab Mukherjee and Railways Minister Mamata Banerjee.

This year also, an IJMA delegation is stated to have met Banerjee to press for reversing the dilution and continuing with 100 per cent reservation for foodgrain and sugar. The association has also sent representatives to meet the prime minister and the finance minister.

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First Published: Jul 21 2010 | 12:25 AM IST

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