The Centre has decided to lower purchase of jute packaging material by 2.03 lakh bales for April-June 2016 season citing shortage of bags, taking the total reduction to 4 lakh bales, or about 30 per cent, of the committed jute procurement in just three weeks.
The move, however, may aggravate job loss in the crisis-ridden jute sector as already 12 jute mills have been closed and about 70,000 workers have been rendered jobless.
Last month, the Textiles Ministry had decided to go ahead with jute dilution for 2 lakh bales or about 15 per cent of total procurement plan.
The Textiles Ministry on January 20 diluted 2.03 lakh bales of jute packaging material for April-June 2016 procurement season citing shortage of bags in the wake of sharp rise in raw jute prices, a communication by the ministry said.
With the two dilutions of similar quantities of about 2 lakh bales each, the total dilution is 30 per cent of the total procurement plan decided by the government for foodgrains under the Jute Packaging Materials (Compulsory use in Packing Commodities) Act, 1987.
The first dilution in December was carried out before the West Bengal government, which had sought time till December to provide a detailed feedback on raw jute availability scenario, could respond.
The Centre in the meanwhile imposed adhoc price cap of jute bags that will be supplied to the government at the December price.
Industry sources indicated that government was trying to bring in some restrictions in raw jute price in a method similar to the price cap after West Bengal government failed to curb raw jute hoarding.
Already 12 jute mills are closed and about 70,000 jute workers have been rendered jobless.
With more dilution the situation aggravate, the sources feared.