61-day strike costs jute industry Rs 2,200 crore

The end to the 61-day strike in the 50-odd jute mills of West Bengal on Firday may have brought some cheer to the mill owners but the unwarranted strike has cost the jute industry Rs 2200 crore.

During the strike period, the jute industry, the size of which is estimated at Rs 7000 crore, suffered a production loss of Rs 1200 crore.

Adding to the woes of the industry is the dilution of up to 76 per cent in mandatory packaging of food grains and sugar in jute bags, a move which was announced by the Union textiles ministry during the strike period.

The dilution plan dealt a blow to the already beleaguered jute industry, resulting in a loss of Rs 1000 crore.

Out of the total requirement of around 10 lakh bales of jute bags for the Rabi Marketing season of 2010-11, the government procurement agencies can use alternate packaging material like polymer bags up to 7.6 lakh bales for packing food grains and sugar. The dilution was effected by the Centre despite the Jute Packaging Materials Act of 1987 which provides for mandatory use of jute bags to the extent of 100 per cent for packing of food grains and sugar meant for government procurement.

Besides, the 61-day strike meant a wage loss of Rs 480 crore for 2.2 lakh people engaged in the jute mills.

To make matters worse, the jute industry has suffered a loss of over Rs 900 crore for selling B Twill jute bags under the DGS&D (Directorate General of Supplies and Disposal) account since 2001.

Even though the Tariff Commission has submitted its latest report in June 2009, the Union textiles ministry is yet to implement it as a result of which the industry is compelled to bear a daily loss of Rs 3962 per tonne on B Twill bags sold under DGS&D account.

Despite repeated appeals made by the jute industry, the textiles ministry is sticking to the old and outdated price formula of the Tariff Commission of 2001.

Sanjay Kajaria, chairman, Indian Jute Mills Association said, “While majority of the pending matters of the trade unions are believed to have cleared with the signing of the tripartite agreement on Friday among the jute industry, trade unions and the West Bengal government, the industry continues to be in distress due to the non-implementation of the Tariff Commission's report of 2009.” He pointed out that the report needs to be implemented to ensure a reasonable, justified and fair price on government orders for B Twill bags.