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Jute: An Industry in Distress

 Nirmalya Mukherjee |  2016-12-25 22:49:41.0  |  New Delhi

Jute: An Industry in Distress

In Bengal, nothing is or could be complete without Mamata Banerjee. So also is with jute, the state’s largest organized industry providing livelihood to a mass of over 3 crore people.  Possibly, Mamata Banerjee is the only leader who had spoken so much to save this national fibre and West Bengal’s jute industry. Even today she remains active despite not remaining in the Union cabinet since 2012 and jute being a central subject with five (5) ministries – agriculture, textile, food, commerce and labour monitoring it in parts and phases. 

Demonetization has already derailed Bengal’s jute economy in a big way with almost Rs 4000 crore funds locked up on raw jute supply due to the cash crunch and a virtual devastation in the jute mills. Around 1 lakh allied jute mill workers have lost jobs due to shift and cuts in production and millions of farmers are stuck up on their stocks. Around 60 percent of raw jute produced during this season is locked up in different godowns and there is rampant hoarding much to the chagrin of the industry and the hapless farmers.  Around 70 percent jute mills are already on the ‘Red List’ for imminent closure indicating law and order problems for the jute districts. Demonetization had dealt a body blow to the livelihoods of millions of farmers and workers attached to the industry. 

Alongside Pranab Mukherjee, Banerjee was always the lone voice of protest in the Union Cabinet against those that were trying to kill jute for the past one decade.  The UPA 2 government had set the ball rolling for killing jute NDA 2 is only pursuing Congress’s left over the programme.

While in Union cabinet, she played a dual role of Bengal’s de–facto jute minister.  None could debate on the fact that she was always more than eager to save the jute industry than her counterparts in the Textile Ministry. A miller had even told on the face the former textile minister Dayanidhi Maran, “Sir I am sorry to say that you are not our saviour. Mamata Banerjee is our jute minister and saviour alongside Pranabbabu”. A shock indeed for Maran, but he was forced to swallow it. Later at a high level meeting in North Block sometime January 2010, Maran proposed nationalising all jute mills and Sharad Pawar, then Food Minister wanted to lift the age old jute protection Act as millers were indulging in fraud practices. Pranabbabu, then Finance Minister left a snub and said tersely, “gentlemen let us discuss something serious. I believe we do not have time for such wayward talks”. The writer was a mute witness to all that happened on that day before the entire Economic Advisory Council that was preparing for the 2011–12 budget discussion. 

Late Rajeev Gandhi wanted to save jute from the deluge of plastics in 1987. The aim was to save the suffering millions of farmers and workers. Thirty years down line, the benefits are still being enjoyed by those for whom the Jute Packaging Mandatory Act (JPMA) 1987 wasn’t designed. Jute industry lobbies are the biggest proponents to save the Act. It is definitely to their own interest where workers and farmers have only used a shield before the government. Jute has already earned the qualification of being called “jhoot industry or a sector filled with falsity and deceit” and a thriving tribe of “most cash rich men in the poorest industry”. 

Even after three decades millions of workers live in penury in the jute mill colonies that are infested with criminals and anti social activities. Around 80 per cent of the industry is filled with irregular and faceless workers who do not have their names on the rolls of the jute mills. While the jute sector raises its voice against the flagrant violation of the jute packaging act, none bothers to question why are the jute mills filled with casual, faceless and unregistered permanent labourers when there are definite directions given in each tripartite agreement. Since 1969, there had been 12 industry–wide strikes in jute sector but with each tripartite agreement, the number of casual labour had increased. 

 Around Rs 468 crore of statutory gratuity funds and another Rs 300 crore by way of provident fund and ESI had been stashed away by jute millers and the issue is locked up in the courts. Even today jute industry survives through loss financing and subsidy from the government. Despite statutory defaults, not a single jute miller has yet gone behind bars after 1993, when the late jute baron Arun Bajoria was taken into Howrah police custody.  

Of late, Mamata Banerjee’s struggle to save the beleaguered sector seems to be on low ebb. Despite protests, the Centre has increased the use of plastic bags for jute bags to pack food grains and sugar replacing jute bags. The jute industry has already lost the entire Rs 2000 crore market of sugar packing and is now all set to lose a large chunk of food bag market. Earlier UPA 2 and now the NDA 2 governments were and are in favour of scrapping the almost 30 year old jute mandatory packing act (JPMA, 1987).  It is still the life–support of jute sector. 

The 2011 National Fibre Policy jointly derived by the Textile Ministry and consultant Dun and Bradstreet has focussed on a road map to gradually phase out JPMA by 2027.  Each year jute industry manufactures over 200 crore jute bags and pays a cess of the similar amount that are deposited in the Consolidated Fund of India. The Union Food Ministry picks up 55 per cent of jute bags through Food Corporation of India (FCI) and 15 other state food procuring agencies, the biggest being Punjab, Haryana and Chattisgarh. Until now Bengal does not have a food procuring policy although 60 of the 76 operating mills of India are located in this state providing employment to 0.25 million industrial workers and 4 million jute cultivators. Around 80per cent of raw jute is produced on 8 lakh hectares of jute fields that are spread out in its fifteen districts. Almost four years ago the state jute group of ministers had converged on a new State Jute Policy. 

Who to blame? Decadence in jute set in after Banerjee withdrew her nominee from the Union Cabinet in 2012. After that she never went back to the Union cabinet and quite naturally so, jute became ‘orphaned’ with Pranab Mukherjee leaving for Raisina and Mamata in Bengal as Chief Minister since 2011.  The Union Government seized on the opportunity and since 2012, all Jute Commissioners converged to decide that JPMA should be scrapped, use of jute bags should be periodically lowered and finally phased out, modernization ought to be stopped as it was being carried in an ineffective way and suitable deterrents and restrictions should be imposed on the jute sector to make them look like “crooks’’ and waylay their finish. Surprising, the officer who initiated on taking jute industry to task in now a senior officer in the Bengal government and is supposedly closed, Banerjee. Banerjee, however, is a hard nut to crack with her commitments.  Each year jute bag supply to government is overestimated as part of the advanced planning and then low indents were given to make the industry look incapable and incompetent to supply. This was done to build fit cases for scrapping JPMA. In April 2016, all received support from the Committee of Secretaries (CoS) led by the Cabinet Secretary a relation to the present Textile Secretary Reshmi Verma. CoS concluded on preparing a road map on how exemptions could be increased for jute. Interesting, the complaint rate from consumers of jute bags is less than 1per cent The Prime Minister’s Office (PMO) has already raised questions before Textile Ministry,” why over dependence of jute bags are counter–productive to jute industry’s interest”? The answer is still awaited and looks unlikely. 

A study of different rules and regulations brought in by the Centre on suggestions from the Textile Ministry are more than enough to prove that jute needs to be ‘policed’ and not only ‘monitored’. Therefore 16 years later the jute and jute Textile Control Order of 2000 was suitably amended and the new Order of 2016 included a provision of unfair practices that indicated that jute millers who are trying to dupe or cheat the governmentto prevent themselves being arrested and going beyond bars if they misappropriated on jute bags, defaulted on supplies to the government, used old and underweight jute bags or manufactured bags with imported raw jute, jute yarn and fabric that do not conform to BIS standards or specifications mentioned in the production control orders. This provision is again backed up with further Cr Pc provisions of 1973 (2 of 1974) where search, seizure and inspection could be done on the jute mills. A new section number 8 has also been included in the order where the government can stop and prohibit supply to a jute mill on seven main and subsidiary grounds for a period of three months to 2 years depending on the nature of the offence committed. A new 31–point inspection protocol has also been introduced to check jute mills from committing future frauds and force them to focus on quality improvements of jute bags. The two laws have taken the wind of the sails of jute industry that are now grumbling and filing court cases against the government to save their skins and stop such punitive action by trying to satisfy the authorities promising to invest in research and development funds. 

Interestingly, manipulation and illegality charges framed against the jute sector by the plastic lobby had recently been shot down by the Appellate Tribunal of Competition Commission (COMPAT), the quasi judicial anti monopoly wing of the government, Competition Commission of India (CCI). The Textile Ministry, however, is not ready take cognizance of COMPAT’s view and are grilling the industry. Jute industry has been made a ‘soft target’ for the Textile Ministry and other ministries as it has lost both its saviours at the Union level – Mamata Banerjee and Pranab Mukherjee. The industry also seems a house divided with jute millers vying at each other’s throat and making secret complaints before the government. As a result, the government might have also skipped on its notion to have a clear and free thinking and are too eager to utilize the differences. 

While the government holds the industry with the suspicion that is backed with the part framed and part genuine allegations, it might not have done its piece of work on issues like violation of the Act by sugar mills despite definite orders from the Law Ministry and the Comptroller and Auditor General in 2011. A number of millers that had fraudulently imported raw jute from Bangladesh had not been booked. Rued a senior textile ministry official, “I did not have the powers to catch the thieves. The new Jute Control Order 2016 came much later when the calamity had happened”.  The official is on the heels of the millers, of course, with a sadistic vengeance.

The argument looked a little out of place as the government could have taken action against them on the basis of the violation of JPMA that mandates supply of jute bags to the government manufactured in the country. While the industry is being prodded and grilled, the center ought to fix accountability on those government officers that had defaulted on controlling illegal imports and hoarding of raw jute by speculators. It obdemands a Central Bureau of Investigation (CBI) inquiry as to why imports were allowed and action not taken against sugar mills that had flouted country’s law although there were instructions from the CAG and the Law Department five years ago. Then it would be clear who wants to kill jute, the Government, the industry or is it in the absence of the two person army Banerjee and Mukherjee duo.

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