Jute Industry Welcomes Union Budget: Key Initiatives &' Benefits

Kolkata, Jul 23 (PTI) The Indian jute industry, facing reduced orders for foodgrain packaging, has welcomed the Union Budget, which includes several key initiatives expected to promote and impact the sector positively.

The Jute sector is a key economic activity worth Rs 10,000 crore for West Bengal supporting 2.5 lakh mill workers and over 4 million farmers in the state.

Raghavendra Gupta, Chairman of the Indian Jute Mills Association (IJMA) told PTI that increased allocation for the Minimum Support Price (MSP) scheme for jute from Rs 500 crore to Rs 700 crore is a significant step towards ensuring better price stability and encouraging more farmers to cultivate jute.

"The budget has also introduced a Rs 200 crore incentive fund for industries producing biodegradable and recyclable goods, including jute products. This fund offers subsidies for new manufacturing units and upgrades, which is expected to boost the production capacity and innovation within the sector," he said.

"Infrastructure development is another major highlight, with an allocation of Rs 1,000 crore for logistics and transport networks in jute-growing regions, particularly in West Bengal and Assam. Improving logistics and transport networks will facilitate smoother supply chain operations, directly benefiting the jute industry," jute sector veteran and former IJMA chairman Sanjay Kajaria said.

The industry body notes that export promotion schemes specific to jute products will receive Rs 300 crore, including reduced export duties and financial assistance for international trade fairs. Additionally, an extra Rs 150 crore has been allocated for research and development in jute, supporting innovations in cultivation and processing techniques.

This move is aimed at enhancing the global competitiveness of Indian jute products, Gupta said.

"The corporate tax rate for SMEs has been reduced from 25 per cent to 20 per cent, a decision that Gupta believes will significantly benefit many jute mills by enabling further investment in technology and capacity building. A special fund of Rs 100 crore will support jute diversification projects, encouraging the development of new jute-based products such as geotextiles, agro-textiles, and jute composites," Gupta said.

Kajaria emphasized the importance of maintaining the current GST rate of 5 per cent on jute products to avoid adverse effects on production costs.

"Adjustments to GST rates on certain inputs used in jute manufacturing could impact cost structures, and maintaining the current rate is crucial," he added.

He further highlighted the challenges posed by new labour laws, which may increase compliance costs for jute mills. He also pointed out the competition from synthetic alternatives despite the promotion of sustainable products.

"The sector needs to enhance marketing and quality assurance to maintain its competitive edge," Kajaria stressed.

The budget's focus on employment and skilling initiatives indirectly benefits the jute sector by ensuring a steady supply of skilled labour, experts said.

"Measures such as setting up hostels for working women, establishing creches, providing incentives for EPFO contributions, and launching skilling programs for 20 lakh youth over five years are expected to bolster the sector's workforce," Gupta stated.

Enhanced credit support for MSMEs during stress periods, inclusive human resource development initiatives under the Purvodaya scheme and environmental and sustainable practices promoted through plans to initiate one crore farmers into natural farming and establish 10,000 bio-input resource centres will help the golden fibre sector.