Jute mills face labour crunch, owners blame MGNREGS

Jute mills face labour crunch, owners blame MGNREGS

Kolkata: West Bengal’s jute industry, which over the decades acquired notoriety for lockouts, employee retrenchment and union unrest, is struggling with a shortage of at least 40,000 workers, which has forced mill owners to cut back on production.

Most mills can run round the clock, but they are now operating at two-thirds of their peak capacity, said Sanjay Kajaria, owner of three jute mills and former president of the Indian Jute Mills Association (IJMA), an industry lobby.

There are 52 jute mills in the state and 78 across India, of which a few are closed. Jute mills in West Bengal employ some 300,000 people in all, according to IJMA.

Attrition and retirement are creating 7,000 new vacancies every year, according to a Union government estimate. A jute mill producing 100 tonnes of processed jute a day typically employs 3,500 machine operators.

The industry is facing a shortage of around 500 workers per mill, the Union ministry of rural development says, based on feedback it received from mill owners.

Ghanshyam Sarda, a leading jute mill owner who employs at least 18,000 people, said he had tried to recruit some 2,000 workers through the state employment exchange, but received only “a handful of applications".

“We had offered to pay a stipend of Rs80 a day during training, and an entry-level salary of Rs157 a shift (of eight hours), but couldn’t find people," he said. Adding other benefits, this translates to a daily wage of Rs227.

Some mills have been lately paying up to Rs247 a day to entry-level permanent employees, according to IJMA. The peak wage for permanent employees is Rs403 a day, which translates roughly to a monthly gross pay of Rs10,485. A large number of mills offer its permanent workers free housing too.

“The problem is escalating with every passing day," Kajaria said, adding that a lot of workers have migrated to other industries such as iron and steel, mining and construction. Attrition among new entrants is around 70%, according to Kajaria.

Until a few years ago, the jute industry had huge provident fund defaults, and mills were run through agents and fronts because the real owners would distance themselves from statutory liabilities. Talks on wage revisions would invariably fail—even in good times like now, the industry faced a 61-day strike, which ended in February—and sometimes lead to indefinite closure of mills.

But things changed over the last few years and, according to mill owners, old dues to provident fund authorities have been pared.

And, from being written off early this century, the jute industry has turned the corner in the past few years, thanks to increased procurement of jute bags by the Centre.

In the past three years, government buying of jute bags has gone up from 1.6 million bales to 2.4 million bales a year. Each bale contains 500 bags weighing 665 grams each.

With the government stepping up distribution of foodgrain through the public distribution system, procurement of jute bags increased rapidly, but this year it could be a little less than last year, at around two million bales, according to Manish Poddar, a jute mill owner and IJMA president.

Being environment-friendly, jute receives protection against cheaper packaging material such as plastic under the Jute Packaging Materials Act. It makes it mandatory to use jute as packaging material for foodgrain.

Although the government has over the years relaxed the restriction, “the effects of dilution of the Act were mitigated to a great extent by the increase in government buying", Kajaria said. The industry’s revenue jumped from Rs4,500 crore to Rs8,000 crore in the past two years alone, he added.

The industry is unable to get new people because it doesn’t offer permanent jobs. Only 30% of jute mill workers in West Bengal are permanent employees, according to Ganesh Sarkar, secretary general of the National Union of Jute Workers, which is affiliated to the Congress-backed Indian National Trade Union Congress.

Temporary workers are paid Rs190 a day, Sarkar said. Unlike permanent workers, they do not receive benefits such as housing and provident fund. “We have been demanding that at least 90% of a mill’s workers should be permanent, but owners aren’t agreeing," Sarkar said.

Kajaria and Sarda, however, blamed the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) for the expanding labour shortage in the jute industry. People have stopped migrating to Kolkata from neighbouring states such as Bihar, Jharkhand and Uttar Pradesh for jobs in jute mills because they can now find employment in their villages, the mill owners said.

Under MGNREGS, the Union government guarantees 100 days of employment a year to adult people willing to do unskilled jobs, and pays a minimum wage of Rs100 a day.

Until a few years ago, at least 60% of jute mill workers were natives of states such as Bihar, Jharkhand, Uttar Pradesh, Orissa and Andhra Pradesh, according to Gobinda Guha, general secretary of Bengal Chatkal Mazdoor Union (literally Bengal jute mill workers union), which is affiliated to the Centre of Indian Trade Unions affiliated to the Communist Party of India (Marxist).

“But now only 40% of workers are from outside the state," he said. “The local youth doesn’t seem to be interested in jute mill jobs, so owners are unable to get new people through the state employment exchange."

Romita Datta contributed to this story.