Jute Body Puts Packaging Act Burden At Rs 45000 Cr

The All India Flat Tape Manufacturers' Association (AIFTMA) has estimated the colossal burden of the Jute Packaging Materials Act (JPMA) at more than Rs 45,000 crore in the last 13 years.

The additional transportation cost for jute bags amounts to Rs 101,20 crore.

At a meeting of the standing advisory committee of AIFTMA held on May 23 in New Delhi, the plastic industry players urged the Government of India to take effective steps for complete repeal of the JPMA, 1987.

The change in the Act, besides minimising subsidy outgo, will result in a gain of Rs 140 crore in excise collection for the Union government from the woven sacks industry.

 

The association claims, "The dilution had become so long overdue that it fails to yield much relief."

Marginal reduction in reservation for sugar and foodgrains translates to only around 14 kt of additional woven sack demand and this offers hardly any relief to the ailing woven sack industry whose growth is stymied artificially by JPMA reservations.

The CPMA iterates that jute packaging leads to degradation of sugar and results in 0.75 per cent price reduction. This results in a loss of Rs 16 crore. Further, loss due to seepage during transportation and handling at plant results in monetary losses worth Rs 72 crore. Loss of material during transit and storage of foodgrains results in a Rs 24-crore loss.

The association further says that a deficit in jute sacks is imminent according to the Indian Jute Mills Association (IJMA) estimates. IJMA expects a sharp fall in raw jute output in 1999-2000 to nine million bales from 10.2 million bales in the previous year.

Under the revised reservation levels, packing 15 per cent of total urea production in the country, is still left exposed to the vagaries of irregular jute sack supply.