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Wednesday, October 14, 2015

bagged cargo ~ jute bags scam unearthed !!!

In July 1905, country went up in flames – Viceroy Lord Curzon announced decision to partition Bengal.  Indians were outraged at what they recognised as a "divide and rule" policy, where the colonisers turned the native population against itself in order to rule, even though Curzon stressed it would produce administrative efficiency.

Marine is movement of goods from one place to another.  Cargo is packed [though one form of packing is ‘no packing’!] – one common form is ‘bags’.  Bagged cargo refers to commodities shipped in bags – of various hues – commonest being ‘gunnies’. Single gunny, double gunnies; used / unused / with inner lining, hessian, and more…. A gunny sack,is an inexpensive bag made of hessian usually formed from jute or other natural fibres, although modern sacks are often made from polypropylene.  The "gunny" portion of the name ultimately descends from Sanskrit gua, "thread, fibre", by way of imperial British corruption of that word's descendants in later Indian languages. Gunnies are traditionally used for transporting grains, potatoes, and other agricultural products.

Jute is a long, soft, shiny vegetable fibre that can be spun into coarse, strong threads. It is produced from plants in the genus Corchorus. The primary source of the fibre is Corchorusolitorius, - "Jute" is the name of the plant or fibre that is used to make burlap, Hessian or gunny cloth.  Jute, the natural fibre is second only to cotton in amount produced and variety of uses of vegetable fibres. Jute is also called "the golden fiber" for its color and high cash value.

In India, it is produced in big numbers – way back in 1971, an official agency of the Govt of India – the Jute Corporation of India Ltd was set up with the aim to provide minimum support price (MSP) to the jute cultivators and also work as a helping hand in the raw jute sector.  What initially started as a small agency expanded its network to many states.

Jute is now in news for wrong reasons as jute bags meant for packaging of foodgrains under the Public Distribution System (PDS) allegedly provided their manufacturers — in league with some officials of procuring State government agencies, quality insurance inspectors and middlemen — an opportunity to siphon off thousands of crores in government revenue.  The Hindu reports that PMO has taken serious note of it  and the Central Bureau of Investigation has been directed by the Union Textiles Ministry to inquire into the allegations. An investigation has been launched.

Government sources told The Hindu that at PDS packaging centres, new unbranded bags were being replaced with used ones. The new ones were diverted to middlemen who sold them off to clients and mills in other States at half the government price.This was recently noticed by Textiles Ministry officials in Haryana and Punjab, from where jute bag consignments were being allegedly diverted to Odisha, Telangana, Andhra Pradesh and Tamil Nadu. The stolen bags did not carry the name and licence number of the manufacturers.

As the biggest buyer, the government purchases about 9 lakh tonnes of jute sacks to pack foodgrains. State government agencies procure bags worth about Rs. 5,000 crore every year. The current government procurement rate is Rs.43 per bag, while in the open market it sell for Rs.15-20.It has been alleged that bags supplied to a State would find their way back to the mills, which sold them once again to the government.

Today’s The Hindu writes  that 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. So there reportedly has been rampant pilferage, illegal sale, recycling of bags and surreptitious supply of imported ones.   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.  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.

Sad state of affairs indeed !!

Getting back to history, the two Nation theory and partition of Bengal did great damage to the Nation.  In 1947, there were riots in Bengal after partition following birth of Nation.  Jute was the largest industry in Bengal at the time of partition. Radcliffe's line left every single jute mill in West Bengal but four fifth of the jute producing land in East Bengal. The best quality fibre yielding breeds of jute were cultivated mostly in East Bengal. However West Bengal rapidly increased jute production and by mid-to-late 1950s became largely self-sufficient in jute. West Bengal's mills became less dependent on East Bengal for raw material.

With regards – S. Sampathkumar

13th Oct 2015.

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