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Textiles
ministry rules out creating revolving fund for JCI
Agencies
- Kolkata
The
Union textiles ministry has ruled out creation of a revolving fund
for reimbursement of losses incurred on minimum support price (MSP)
operations by the Jute Corporation of India (JCI).
“There
is no proposal under consideration to create a revolving fund for
reimbursement of JCI’s losses incurred on MSP operations,”
the textiles ministry sources said. The JCI had incurred a loss
of Rs 158.86 crore in MSP operation between 1996-97 and 2002-03.
The government had reimbursed JCI’s losses between the year
1996-97 and 2001-02 through a loan of Rs 147.75 crore, but in 2002-03
it had provided a subsidy of Rs 30 crore, they said. “In addition,
the government provided guarantee of Rs 33 crore towards margin
money for availing cash credit facility to the extent of Rs 99 crore
for both price support and commercial operation of JCI in 2002-03,”
the sources said.
Sufficient
fund was always made available to JCI so that it could smoothly
conduct MSP operations. Meanwhile, JCI had till now procured about
13 lakh bales at MSP during the jute year July 2002 to June 2003.
“It is surprising that JCI had to be given a subsidy of Rs
30 crore for MSP operations despite the fact that it was charging
a price from mills that covered all its expenses,” the sources
said.
They
further stated that of the 12 lakh bales supplied to the industry,
JCI had already received payment for about 10 lakh bales in the
form of LCs and 8 lakh bales of it was already delivered.
Meanwhile,
the Commission for Agricultural Cost and Price (CACP) has urged
the central government to completely clean up the balance sheet
of JCI to help it play an effective role in defending MSP. “The
government should take up all steps to clean the balance sheet of
the JCI once and for all,” CACP said in its report on price
policy for jute for 2003-04, which also recommended further strengthening
of JCI’s financial footing.
The
CACP recommendations, however, had not gone down well with the textiles
ministry, which had objected to increase in funding to JCI. “An
increase in the funding of JCI is not justified at this stage. In
fact, JCI has a lot of surplus staff and our effort has been to
reduce the administrative expenditure of JCI,” the ministry
said in its comments on CACP recommendations.
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