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The Centre has began diluting the mandatory jute packaging order from 90 per cent to 50 per cent for foodgrain packaging, which, it is feared, will deal a major blow to the Bengal's economy where nearly a million people are dependent on the sector.
"Starting this year the contingency plan is to reduce the use of jute bags by 5 per cent each year and finally bring it down to 50 per cent from 90 per cent within the next seven years. For 2017-18, the Standing Advisory Committee on Jute has recommended five per cent dilution for foodgrain packaging to 85 per cent," jute industry officials told PTI.
Till 2016-17, 90 per cent of total foodgrain and 20 per cent of sugar was to be packed in jute bags.
The Centre's decision is based on the suggestion made by a Committee of Secretaries (CoS) in April 2016, the sources said.
The Jute Packaging Materials (Compulsory Use in Packaging Commodities) Act, 1987 directs agencies for mandatory use of jute packaging materials for foodgrain and sugar to the extent decided by the government every year based on the Standing Advisory Committee's recommendations.
Jute industry produces around 200 crore bags valued at Rs 8500 crore and the scaling down in mandatory packaging figure means wiping out of Rs 3500-4000 crore business.
Bengal being the key player in the jute sector, will bear the brunt of the impact.
According to Indan Jute Mills Association estimates, about 40 lakh farm familes and and three lakh workers are associated with the sector.