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Jute-bag racket busted, linked to price fall

March 10, 2015

KOLKATA, July 27, 2015: The price of a jute bag, as declared by the jute commissioner, is Rs 43. But it only costs Rs 34.67 in the open market.

The jute commissioner’s office (under the textile ministry) has busted a racket that was supplying unbranded bags at half the stipulated price by siphoning the product from the government supply chain.

The government, the biggest buyer, procures eight to nine metric tonnes bags spending Rs 4,500 crore to Rs 5,000 crore annually. To counter the cheaper synthetic bags, the Jute Packaging Materials Act (JPM Act) was enacted in 1987. So, 90 % of food grains and 20% sugar are mandatorily packed in jute sacks.

TOI has accessed a report that exposes the modus operandi behind the devaluation of jute bags. “All stakeholders — from mill owners, procuring agencies that obtain the sacks for packing food grains and government officials are involved in the organized racket,” said Gouri Shankar Jain, who has filed an RTI on this.

A bag carries the names of the mill, procuring agency, the crop’s production year etc. Five hundred bags are packed inside a bale which also bears the same information. The mill owners first bribe the directorate of quality assurance (DQA) inspectors, who, instead of embossing, pass the unbranded bales that are dispatched on trucks and railway wagons to railheads of the procuring states.

According to the report, the agents make a killing by selling the bags in private markets of Telangana, Andhra Pradesh, Tamil Nadu, Odisha and West Bengal. Manufacturers and mill owners purchase these bags at lower rates and sell it to the government, which pays for new bags and gets the recycled ones.Source:

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