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Sirens off in six jute mills in West Bengal in less than a month

Over the last few months, in at least six jute mills, sirens have stopped blaring as mills have shut operations

Namrata Acharya  |  Kolkata 

Sirens, the mass-alarm system of yesteryears, are history. However, for workers of 58 jute mills in West Bengal, sirens are still of utmost significance. Every morning, a 9 am siren denotes the nearby jute mill is up and running, the gates open.

Over the last few months, in at least six jute mills sirens have stopped blaring as, the mills have shut operations. About two weeks back, Hari Kusum Maheshwari, CEO of Northbrook Jute Mill was beaten to death by agitating workers.

The management wanted to reduce working days of the mill either to run the plant three days a week or five hours a day. However, the owners wanted to run the mill at least five days a week. Following the incident, in less than a week, close to five jute mills closed operations or suspended work.

Apart from Northbrook, the mills that have closed down are-Bevelry, Hanuman, Ackland, Victoria and New Central (work suspended). The six mills together had a production of close to 400 tonnes of jute bags per day till about a year ago.At present, there are 50 mills running a day, with production of 4,000 tonne per day, against a capacity of 6,000 tonnes per day.

According to a January 2013 report by the National Skill Development Corporation, the jute sector is the second highest employment generating industries in West Bengal, providing jobs to nearly 214714 people.

Between November and April 2014, eight jute mills suspended operations, but later opened on political intervention. The reasons behind the present unrest in the jute mills is the poor demand for jute bags, which has prompted the mill to go for massive production cut in the last one month.

The problems in the jute sector started in 2012-13, when the earlier UPA government decided to dilute the JPMA (Jute Packaging Materials Act), 1987. So long, the Act provided a cushion to the jute sector by providing 100% reservation to the jute sector for packaging food grains and sugar.

In other words, food grains and sugar could not be packed in anything other material than jute bags. However, in view of perennial delay and shortage of jute bag production to meet the huge demand, in 2012-13, the government diluted the reservation for jute under JPMA to 90% for food grains and 40% for sugar. Subsequently, in 2013-14, the reservation for sugar packaging was further reduced to 20%.

What further aggravated the situation was an overestimation of government projection of food grains in 2013-14, according to Raghav Gupta, chairman, IJMA. Last year, the government decided to purchase seven lakh bales of plastic bags instead of jute bags for packaging. However, the government used only five lakh bales of plastic bags. The government planned to use the carried-over stock of plastic bags during the current, which dried-up the demand for jute bags in the present season.

Therefore the industry was starved off orders for four months from February till present. Thus in May, against an expected order of 2.1 lakh jute bales, the actual demand turned out to be only 1.28 lakh bales In June, the situation worsened, with demand dipping to .78 lakh bales, against an anticipated demand of 2.7 lakh bales, as the Punjab government did not placed orders in the months.

While earlier, jute mills were making yearly profit of Rs 1-3 crore per year, now they are making monthly losses of Rs close to Rs 50 lakh per month, according to Ghanshyam Sarda, a Kolkata-based jute mill owner. At present, the operating jute mills in the state are running at not more than 50% of the installed capacity.

"The jute mills are undergoing severe crisis, and if the present situation continues, many more jute mills will close," according to Gupta..

Notably, lockouts are no aberrations in jute mills. While, the dilution of the JPMA Act came as a deadly blow, the jute industry for long has been subject to strained relation with the management and workers. In December 2009, jute mill workers in 52 mills in the state had gone on an indefinite strike, culminating in a tripartite agreement between the government, mill owners and workers.

Wage disparity, poor working conditions, hiring of contractual working and deprivation of statutory dues, including provident funds-are some of the accusations that the jute sector has always faced. In the tripartite agreement, it was decided the arrears in dearness allowance (DA) would be settled by jute mills in six instalments spread over three years. I

n addition, the entry level pay of workers was increased from Rs 100 per day to Rs 157 per day. According to jute mill owners, at present, there are no fresh pending PF dues, except those subject to court cases, with the jute mills.

The earlier tripartite agreement was to be revised last year, but has so far not been revised due to lack of agreement. In the backdrop of the present crisis in the industry, the mill owners will meet the workers this month to draw up new terms of accord.

"There are no uniform wages in jute mills. Moreover, only 60% of workers in jute mills are getting statutory dues, like PF and ESI benefits. No new entrants get service book. The earlier government had started ESI inspections in jute mills, but ever since the TMC government has come to power, there has been no such monitoring. At present, the average pay of a jute mill worker is Rs 250 a day, which is even less than a mason," said a trade union leader at a jute mill.

According to Manish Poddar, former chairman of IJMA, at present about 80% of workers are permanent, while 20% are new entrants, with the average pay of a permanent worker comes at Rs 450 per month.

With the jute mill sector going through one of the toughest times, it could be the debacle of one of few surviving manufacturing sectors that West Bengal ever had.

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First Published: Thu, June 26 2014. 15:48 IST