The Union Textiles Ministry has unearthed a major racket in large-scale import of cheap jute bags from Nepal and Bangladesh by Indian manufacturers, many of whom were supplying these to government agencies after putting their own seals.
The Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987, mandates that jute bags supplied to government agencies for packaging foodgrains and sugar under the Public Distribution System (PDS) must be manufactured by the supplier, using only domestically produced raw jute.
But with many Indian manufacturers surreptitiously supplying cheap imported jute bags, their prices have plummeted in the domestic market, adversely affecting lakhs of farmers and jute mill workers across the country. The current government procurement price is Rs.43 a bag, while the imported ones cost Rs.30-35 in the open market.
“An estimated two lakh bales (each containing 500 bags) are imported every year,” said a senior government official.
On Monday, The Hindu had reported a scam involving alleged pilferage, illegal sale and recycling of new bags supplied to State government agencies, which is currently being probed by the Central Bureau of Investigation.
RTI activist Gouri Shankar Jain said suppliers also produced fake raw jute procurement bills to conceal the sale of imported bags to the government. “Several manufacturers under-report the number of imported bags, pushing the unreported lot into the PDS system. Through over-invoicing, they inflate outgoing remittances and round-trip the rest of the amount through the hawala channel. It is nothing but black money,” he said.
Many manufacturers, particularly those based in Bihar, have also set up mills in Nepal, it is suspected. Mills in Nepal procure raw jute from India, manufacture bags and sell them to clients in India.
Over the past few years, Ministry sources said the jute mafia has used individuals to import bags from Nepal without detection. “They recruited individual players for as low as Rs.5,000 a month. First they obtained an importer-exporter code for the agents from the Directorate General of Foreign Trade offices. Then they got them registered with the Jute Commissioner’s Office to facilitate import of the bags from Nepal,” said another official.
After the fraud was detected, the Jute Commissioner’s Office cancelled over 300 such registrations last month and set new terms and conditions for new registrations. Now, applicants are required to file monthly returns on imports and sales. The subsequent buyers also have to furnish the necessary details.
Raw jute traders and mill workers in different parts of the country have been alleging that several manufacturers, who draw subsidies from the government and get easy loans, have not been clearing their dues running into hundreds of crores. Last year, workers at a Kanpur mill got a police case registered against the owners, alleging that while the latter had shut the mill, they were still supplying jute to government agencies.
In another instance, the RTI activist said, jute traders in West Bengal filed a complaint with Union Textiles Minister Santosh Kumar Gangwar, accusing an owner of shutting down his mill and disposing of the machinery without clearing dues of over Rs.100 crore. Similar complaints were lodged against two other mills in the State on behalf of about 5,000 jute producing farmers.
Government records say there are 93 jute mills, 67 of them in West Bengal alone.
