The Punjab government had been defaulting on jute bag orders for the past three months, the biggest buyer of jute bags have pointed out that jute mills were supplying poor quality, inferior and second hand bags at almost double the original price resulting in a loss to the tune of Rs 2000 crore every year. The complaint has been forward to Prime Minister Narendra Modi.

The decision of the Punjab government to blacklist seven jute mills of West Bengal and unexpectedly stop supplies from seven other mills has landed the jute industry in the soup.

While the Punjab government has already ordered a probe into the matter, the jute industry has plunged into a crisis with eight mills already shutting down and many others staring at closure. The shutdown of eight mills has led to 50,000 workers losing their jobs.

The Indian Jute Mills Association (IJMA) has launched a strong protest against the decision as they did not receive a single complaint from the Punjab government so far. Sanjay Kajaria, owner of a leading jute mill and former chairman, IJMA said that no miller should be penalised without a through enquiry and an opportunity of fair trial.

The accused mills are Angus, Samnugger, Bally, Ambika, Baranagar, Kankinnarah, Ganges, Hastings, India, Delta, RDB Textiles, Rameshwara, Shree Gaurishankar and North Brook Jute mill.

Punjab is the largest purchaser of jute bags in each Rabi and Kharif seasons for packing food grains. Over 50 percent of jute bags manufactured in the country and supplied to the government are purchased by Punjab.

The Jute Commissioner is understood to have taken up the matter with the Punjab government and Union food ministry after Punjab refused to place any order for jute bags.

Punjab were supposed to purchase over 700,000 bales or 0.3 million tonne of jute bags in the past three months, but purchased only 300,000 bales or around 0.1 million tonne. The jute industry has the capacity to supply around 300,000 bales of jute bags each month.

The jute industry has the capacity to manufacture about two million tonne jute bags every year valued at Rs 10000 crore.