Thursday, April 28, 2011


Jute industry, made up of about 66 mills, is located predominantly in the state of West Bengal and their main product, the jute sac is purchased by the GOI for packing food grains for storage and distribution. That quality of the sack has a critical bearing on its ability to protect the grain for long periods is well known and it is mandatory for the Jute Mills to supply as per the well-laid standards specified for its quality. However a serious fraud seems to be taking place through collusion between the government personnel entrusted with jute sac procurement and the suppliers causing almost Rs 9 billion loss annually to the exchequer. It is condemnable that these fraudsters perpetuating this scam have no social conscience about the wastage of precious food through supply of inferior sacs for lining their pockets. Here is a take on this episode.

"Meanwhile, the Punjab government has already written to the Union food ministry, requesting for the use of polythene/plastic bags for packing of food grains in the ongoing Rabi season and the upcoming Kharif season under its PUNGRAIN scheme. It is estimated that the mills are cheating the government to the tune of around Rs 72 crore per month by supplying 4,000 bales of inferior quality and used bags that are almost 65 gms lower than the standard weight of 665 gms. While the mills are quoting a price of a new B–Twill bag at Rs 37, they are only supplying used and inferior quality bags weighing 600 gms and priced at around Rs 33.36. In this way they are making an illegal income of Rs 3.64 per bag and Rs 1820 per bale. Almost 40 per cent of the annual industry production of 1.2 million tonnes of jute bags is purchased by the government under the Jute Packaging Materials Act of 1987".

The Jute Mills should be grateful to GOI for purchasing almost half their production of jute sacs at a profitable price and if FCI switches over from the jute sac to woven plastic sacs, there could be disaster waiting for the industry with most of them forced to down their shutters. In stead of being appreciative of this arrangement, it is reprehensible that the industry is trying to "bite the hand that feeds it." GOI is right in taking severe action against those indulging in this crime and no punishment will be too big for these fraudsters.


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