Demonetisation locks up 2.5 lakh jute workers’ wages worth Rs 300 crore

The jute industry fears industrial unrest in the state’s jute mill areas as wages of 0.25 (2.5 lakh) million workers of around Rs 270–Rs 300 crore are locked up because of the demonetisation of Rs 500 and Rs 1,000 notes.

There is an apprehension that daily cash payment to jute workers will stop because of demonetisation.

Raw jute trade has also come to halt as traders are unable to make bulk or marginal purchases from jute farmers. According to industry experts the situation can once again lead to raw jute scarcity and a subsequent closing down of jute mills. Recent income tax raids linking unaccounted funds of jute traders to some jute mill owners had also instilled a sense of fear within the raw jute traders

In 2015, the industry suffered due to raw jute scarcity arising from hoarding and delayed government action. There was also crop failure because of poor monsoons.

Jute industrial lobby Indian Jute Mills Association (IJMA) has cautioned if situation lingers beyond November 24, the next upcoming day for payment of wages, there could be industrial unrest leading to law and order problems in the 60 odd jute mill areas of state spread over five districts – North and South 24 Parganas, Howrah, Hooghly and Nadia. IJMA said: “The issue is sensitive’’.

Each jute mill worker receives fortnightly cash payments by hand from the labour offices of jute mills that range between Rs 257 per day and Rs 462 per day at the lowest and highest levels depending on the category of workmen.

At present, the 2.5 lakh jute workers who receive fortnightly payments for 12 days equivalent to Rs 3,084/ 12 days at the lowest level and Rs 5,544 / 12 days at the highest level.

Apart from fringe benefits and other statutory benefits the monthly wages of jute workers range between Rs 6,168 and Rs 11,088 at the minimum and top levels. Almost 98 percent of the jute mills pay their workers through cash by hand.

Speaking to Millennium Post, a concerned Jute Commissioner Subrata Gupta said: “Almost one and half year ago, I proposed a direct benefit transfer (DBT) of funds to the workers accounts. This is an opportunity for the jute mills to link the workers’ wages through banks. It will help eliminate ghost workers and other faceless category workers from the jute mills that are mostly riff-raff.”

Gupta claimed a few jute mills have already come forward with proposals to his office to urgently link their workers’ wages to the banks. The Commissioner would soon take up the matter with the Textile Ministry to avoid any bigger crisis.

Gupta said: “it is a very big opportunity for the jute mills who had defaulted on statutory dues of workers and to regularise issues in the jute industry. 

We have already proposed linking government jute bag orders or PCOs to non-payment of statutory dues of the workers and are awaiting a decision on the matter”. At a recent meeting held in the Textile Ministry CPI(M) led CITU leader Anandi Sahu claimed that jute mills have defaulted on workers gratuity payment of around Rs 478 crore.

According to state Labour minister Malay Ghatak: “Chief Minister Mamata Banerjee is apprised of the matter. She is aware of the problems faced by the jute and tea industry.”

The state labour department is believed to have referred the matter to the Chief Secretary for appropriate action from the Chief Minister’s office. At a later stage the state jute Group of Ministers will also discuss the issue. 

IJMA has approached Rekha Warrier, Regional Director of Reserve Bank of India to relax the upper limit of withdrawal of Rs 10,000 per day and overall limit of Rs 20,000 per week for disbursement of workers’ wages. To the appeal, Gupta said: “I do not think there could be any scope for relaxation as the decision is not industry specific. It has an overall connotation.”