Demonetisation of Rs 500 and Rs 1,000 notes has taken its severe toll on the jute industry. It has further exposed the illegalities within Bengal’s jute mills.
According to a conservative survey, because of demonetisation, almost 70,000 to 1.5 lakh workers in 60 jute mills are now rendered illegal. It is because these workers do not have proper status and bank accounts. They are engaged on a daily and piece-meal basis as casual workers by local syndicates and are poorly paid in cash by hand. Their names do not figure on the rolls and log books of jute mills.
There are about 0.25 million regular and irregular workers in the jute mills of Bengal who are paid fortnightly wages amounting to Rs 150 crore. At this moment, fortnightly wages of around 1.5 lakh workers amounting to Rs 125 crore is locked up because of demonetisation and there are problems in most mills.
As per the survey, only 25 per cent of the wages of Bengal’s jute mill workers are linked to bank accounts with proper status in the jute mills. The remaining is made to work daily without any benefit or status. Jute millers are now in fix as to how they could link the cash accounts of these hitherto engaged illegal workers.
There are several complaints before the state government as to how illegal human trafficking of workers is carried out in Hooghly and N 24 Parganas jute mills. Jute mills are run on tripartite agreements. As per each agreement, the ratio of permanent and casual workers should be 90:20 or 80:20. Instead, it is highly skewed in favour of illegal and casual workers in the ratio of around 25:75.
Jute mills have also defaulted on statutory workers dues of around Rs 600 crore, of which gratuity dues are about Rs 478 crore.
On Wednesday, the Kanoria owned Reliance Jute Mill ran into wage problems and there spinning and weaving departments were shut. Mill authority Sanjay Hada said: “As of now the mill is running. Although there were initial problems, we coped with it.”
The industry fears that soon, there would be more closures as there is also raw jute scarcity in the mills.
Cash transaction, which takes up around 98 per cent of raw jute trade are virtually closed. Raw jute store in many mills are super critical with 3 to 7 days stock.
To clean up the untidy jute mill wage and worker system, over a year ago Jute Commissioner Subrata Gupta suggested on linking all jute mill workers’ wages to bank accounts and direct online transfer of benefits. Gupta had focused on faceless workers known as ‘zero numbers’ and ‘ghost workers’.
The mill owners are allegedly accused of lowly paying these irregular and illegal workers and gathering maximum profits through sale of bags to the government. In 2009, the Union finance ministry had pointed out how jute millers had amassed huge profits, property and raised their net worth by almost 139 per cent in a span of five years.
Currently the mill owners are in a big problem on how to control the situation. Some have suggested on linking workers’ wages through bank accounts but as the process would take long there is a payments crisis in the jute industry.
Jute owners association IJMA has approached the central and state governments being quite unaware as to how demonetisation can punch holes into the 53 year old wage worker system in the mills.
Although a tripartite meeting was held on Wednesday, the state labour department failed to issue any specific direction or resolve the problem.
Chief Minister Mamata Banerjee is opposed to the way demonetisation was done as it had brought immense misery for the common person. The Jute Commissioner was briefed over the development.