CCEA to decide dilution proposal of jute soon

The Cabinet Committee on Economic Affairs (CCEA) would meet on Thursday to decide on the proposed 25 per cent dilution under Jute Packaging Materials Act (JPMA) of 1987.

JPMA provides for 100 per cent reservation for jute bags for packaging of sugar and food grains for procurement by the government procuring agencies.

The CCEA would meet on Thursday to decide the proposed dilution issue, said a source close to the development.

The CCEA meeting assumes significance as it would clear the air on the dilution issue which has drawn flak from the jute industry in the country.

The indecisiveness on the dilution proposal had led to an unprecedented situation which had resulted in a progressive decline in prices of raw jute and jute goods in this month.

Amid fears of dilution, the sugar industry in the country had refrained from procuring jute bags from July this year even though the new jute crop had started arriving by then.

Prices of raw jute had drastically fallen from Rs 28,500 per tonne on August 1 this year to Rs 20,500 per tonne (as on August 26 this year).

Similarly, the price of B Twill jute bags (665 gms) were ruling at Rs 39,500 per tonne (as on August 26 this year) compared to Rs 42,000 per tonne on August 1.

Keeping in view the interests of more than four million jute cultivators and 2.5 million jute workers across the country, the Indian Jute Mills Association (IJMA) had sought the reversal of the dilution plan. After approaching three Union Cabinet ministers- Sharad Pawar, Mamata Banerjee and Pranab Mukherjee, IJMA in a last ditch effort to reverse the dilution move had sought the intervention of Prime Minister Manmohan Singh earlier this month.

The 25 per cent dilution in JPMA was made by the Standing Advisory Committee (SAC) chaired by the Union textiles secretary.

The committee was of the view that raw jute production for 2009-10 would be 90 lakh bales and this was inadequate to meet the requirement of government procurement agencies for packaging of food grains and sugar.

The 25 per cent dilution in JPMA was made by the Standing Advisory Committee (SAC) chaired by the Union textiles secretary.

The committee was of the view that raw jute production for 2009-10 would be 90 lakh bales and this was inadequate to meet the requirement of government procurement agencies for packaging for food grains and sugar.