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Jute technology mission -- Textiles Ministry firming up funds

Jayanta Mallick

CALCUTTA, June 18

THE Textiles Ministry is in the process of firming up the financing of the Rs. 150-crore Jute Technology Mission.

The Textiles Secretary, Mr. Anil Kumar, told Business Line that the Agriculture Ministry had agreed, in principle, to contribute Rs. 50 crores, as envisaged in the draft financing scheme.

The scheme provided that Rs. 100 crores would be sourced from the cess fund. However, Mr. Kumar said certain bottlenecks had to be removed before the fund could be tapped.

The cess fund also takes care of the requirements under the external marketing assistance (EMA) for jute goods. But the EMA was currently running a backlog of around Rs. 60 crores. The jute mill industry has, therefore, proposed a restructuring and augme ntation of the cess collected from it.

As against the existing tonnage-based cess, the industry has suggested a two per cent ad valorem levy which, as per its estimates, would help raise Rs. 65 crores annually. This would mark a significant increase in collection as the yield under the existi ng mechanism was just around Rs. 25 crores annually.

The Textiles Ministry has urged the Law Ministry to incorporate appropriate changes in the Cess Act to facilitate a switch-over to the suggested basis for collecting the cess.

Only after these steps were taken, would the scheme for financing the Jute Technology Mission be finalised and forwarded to the Planning Commission for approval.

Meanwhile, at a meeting held by Mr. Kumar to review the operation of the Jute Entrepreneurs Assistance Scheme (JEAS) of the National Centre for Jute Diversification, it was decided that loan repayment defaults would attract a penal interest of 12.5 per c ent.

It may be mentioned that entrepreneurs setting up small and medium-scale units for jute diversified products get soft loans from NCJD under JEAS.