Jute millers want govt not to cut cash incentive

FE Report | Published: February 27, 2015 00:00:00 | Updated: November 30, 2026 06:01:00

Jute millers have recently urged the government not to cut cash incentive on export of jute products.
They also have demanded that the authority increase the cash incentive up to 20 per cent (for hessian, sack, CBC makers) and 10 per cent (for spinners) from existing 10 per cent and 7.50 per cent respectively.
In two letters sent to the ministry of jute and textiles on February 22 and 18, the Bangladesh Jute Mills Association (BJMA) and the Bangladesh Jute Spinners Association (BJSA) urged the government not to reduce the cash incentive on export of jute goods.
The millers made the request following media reports on a government move to reduce the cash incentive from existing 10 per cent to 7.50 per cent on jute hessian, sack, CBC (Carpet Backing Cloth) and jute yarn from 7.50 to 5.0 per cent from the next fiscal year.
In the letters, the millers said due to political unrest in the Middle East and global economic recession, the demand for jute products and its prices had declined significantly.
According to the letters, the millers were counting huge losses as the present political turmoil in the country was hampering production and the supply process of the mills.
If the government reduces cash subsidy, it would hit the sector hard, the association leaders said.
BJSA in its letter also requested the government to exempt them from paying interest on their capital loans in the first quarter from January to March and the second quarter from April to June.
The association, which provides 65 per cent of export earnings from jute sector, also called for reducing tax at source to 0.30 per cent from existing 0.60 per cent.
A total of 145 small and large jute mills are operating under BJMA while 96 under BJSA. The sector provides employment for over 20 million people directly or indirectly.
Meanwhile, Indian jute industry has demanded imposition of a countervailing duty on imports of jute goods from Bangladesh, according to an online report by India based www.business-standard.com.
The Indian Jute Mills Association (IJMA) has raised the demand ahead of the Union Budget to counter surging imports from Bangladesh.
Indian jute imports from Bangladesh have grown 35 per cent in the April-December period of this fiscal at the expense of domestic manufacturers.
Over the same period, the domestic jute bags manufacturers have cut production by more than 25 per cent.
"Under the SAARC treaty, there is zero duty on import of jute goods from Bangladesh, thereby creating a non-level playing field between jute manufacturers of India and Bangladesh" said Raghavendra Gupta, IJMA chairman said in a note.
He also said subsidised jute goods from Bangladesh is flooding the Indian market, severely causing injury to the interests of Indian jute manufacturers.
The countervailing duty on imports of jute goods from Bangladesh, to the tune of 10 per cent subsidy extended by the Bangladesh government, has to be facilitated, thereby ensuring a level playing field for Indian jute manufacturers, he suggested.
The industry has also urged the Union government to expedite the use of jute geo-textiles in at least 15 per cent of the road construction undertaken by the Pradhan Mantri Gram Sadak Yojana (PMGSY) programme, as using this product in about 200 projects has been found to be beneficial and cost effective in road construction, river bank protection as well as hill slope stabilisation.
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