Cabinet approves extension of jute packaging norms; raises ethanol price

The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi, on Thursday approved a mechanism for procurement of ethanol by public sector oil marketing companies (OMCs) under Ethanol Blended Petrol Programme. It also gave nod to extension of norms for mandatory packaging of food grains in jute materials.

The Cabinet announced an increase in the price of ethanol derived from different sugarcane based raw materials under the Ethanol Blended Petrol (EBP) programme for one year starting 1 December to 30 November 2021. The government has been implementing EBP programme wherein OMCs sell petrol blended with ethanol up to 10 per cent.

The price of ethanol for doping in petrol has been hiked by 5-8 per cent, which will help farmers get remunerative price while also cutting down oil imports, said Union Minister Prakash Javadekar while addressing a press conference after Cabinet meeting.  

"The move also checks pollution as ethanol is environment-friendly," Javadekar said.  

The price of ethanol derived from C heavy molasses has been increased from Rs 43.75 a litre to Rs 445.693.75 per litre, and for B heavy molasses to Rs 57.61 per litre from Rs 54.27 earlier, as per the Cabinet statement.

Also, the price of ethanol from sugarcane juice, sugar, sugar syrup route has been increased from Rs 59.48 per litre to Rs 62.65 per litre. Additionally, GST and transportation charges will also be payable.  

"Oil marketing companies (OMCs) have been advised to fix realistic transportation charges so that long distance transportation of ethanol is not disincentivised," as per the Cabinet statement.

The government has approved that 100 per cent of the food grains and 20 per cent of the sugar shall be mandatorily packed in diversified jute bags. The move will give an impetus to the diversification of the jute industry. The reservation norms in present proposal would further the interest of domestic production of raw jute and jute packaging material in India, thereby, making India self-reliant in consonance with Aatma Nirbhar Bharat, the government said.

Considering that nearly 3.7 lakh workers and several lakh farm families are dependent for their livelihood on the jute sectors, the government has been making concerted efforts for the development of jute sector; increasing the quality and productivity of raw jute, diversification of jute sector and also boosting and sustaining demand for jute products.

Further, the Cabinet decision also mandates that initially 10 per cent of the indents of jute bags for packing foodgrains would be placed through reverse auction on the Gem portal. This will gradually usher in a regime of price discovery.  The Government has expanded the scope of mandatory packaging norms under the Jute Packaging Material (JPM) Act, 1987.  

The jute industry is predominantly dependent on Government sector which purchases jute bags of value of more than Rs 7,500 crore every year for packing foodgrains. This is done in order to sustain the core demand for the jute sector and to support the livelihood of the workers and farmers dependent on the sector.