Jute Manufactures Development Council - Ministry of Textiles
Jute Manufactures Development Council - Ministry of Textiles
Jute Manufactures Development Council - Ministry of Textiles
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JUTE MANUFACTURES DEVELOPMENT COUNCIL<br />
INCENTIVE SCHEME FOR MODERNISATION OF JUTE INDUSTRY<br />
1. Short Title :<br />
The Scheme may be called, the <strong>Jute</strong> <strong>Manufactures</strong> <strong>Development</strong> <strong>Council</strong> (JMDC)<br />
Incentive Scheme for Modernisation <strong>of</strong> <strong>Jute</strong> Industry.<br />
2. Objective :<br />
The objective <strong>of</strong> the scheme is to facilitate modernisation and upgradation <strong>of</strong><br />
technology in jute mills.<br />
3. Commencement and Duration :<br />
The scheme will come into effect on and from a date to be notified by the <strong>Jute</strong><br />
<strong>Manufactures</strong> <strong>Development</strong> <strong>Council</strong> and shall remain valid initially for a period <strong>of</strong> three<br />
years. However, the tenure <strong>of</strong> the scheme is subject to annual review by the <strong>Council</strong> <strong>of</strong><br />
the JMDC.<br />
4. Definitions :<br />
i) “<strong>Jute</strong> <strong>Manufactures</strong> <strong>Development</strong> <strong>Council</strong>” means <strong>Jute</strong> <strong>Manufactures</strong> <strong>Development</strong><br />
<strong>Council</strong> constituted under the <strong>Jute</strong> <strong>Manufactures</strong> <strong>Development</strong> <strong>Council</strong> Act, 1983.<br />
ii) “<strong>Jute</strong> Commissioner” means the incumbent holding the post <strong>of</strong> <strong>Jute</strong> Commissioner.<br />
iii) “<strong>Jute</strong> <strong>Manufactures</strong>” means <strong>Jute</strong> <strong>Manufactures</strong> as defined in the <strong>Jute</strong> <strong>Manufactures</strong><br />
Cess Act 1983.<br />
iv) “<strong>Jute</strong> Mill” means ‘producer’ <strong>of</strong> <strong>Jute</strong> <strong>Manufactures</strong> as defined in the <strong>Jute</strong><br />
<strong>Manufactures</strong> Cess Act 1983.<br />
v) “IJIRA” means Indian <strong>Jute</strong> Industries Research Association located at 17 Taratola<br />
Road, Kolkata – 700 088<br />
vi) “IJMA” means Indian <strong>Jute</strong> Mills Association located at 6 N.S. Road, Kolkata – 700<br />
001<br />
5. Operating Agency :<br />
The scheme will be operated by <strong>Jute</strong> <strong>Manufactures</strong> <strong>Development</strong> <strong>Council</strong>,<br />
Kolkata.<br />
6. Eligibility Criteria :<br />
All jute mills, who pay statutory cess on manufacture <strong>of</strong> jute goods and submit to<br />
JMDC returns on payment <strong>of</strong> cess will be eligible to receive subsidy under the scheme<br />
provided that the modernization and upgradation is carried out subsequent to the date <strong>of</strong><br />
notification <strong>of</strong> the scheme.<br />
7. Types <strong>of</strong> Machinery / Equipment / Ancillary Items Eligible for Subsidy :<br />
(i) All items <strong>of</strong> machinery identified under the Technology Upgradation Fund<br />
Scheme (TUFS) from time to time;
(ii) Other items <strong>of</strong> machinery including stand-alone units, not covered under sub-clause<br />
(i) above may be approved by the Empowered Committee and notified by JMDC for the<br />
purpose <strong>of</strong> this scheme from time to time;<br />
(iii) Energy saving equipment in the manufacturing process.<br />
(iv) Equipment utilizing non conventional energy – solar power and mill waste – which<br />
provide a supplementary source <strong>of</strong> power and facilitate energy savings;<br />
will be eligible for subsidy under the scheme, provided that such machinery and<br />
equipment – except those second hand machinery allowed for import under TUF scheme<br />
– are new.<br />
8. Subsidy for Modernisation :<br />
i) All eligible jute mills under the scheme will be entitled to get subsidy for procurement<br />
<strong>of</strong> the eligible items mentioned in Clause 7(i) to 7 (iv) above, for modernisation and<br />
upgradation, on making an application in a format prescribed for the purpose. The<br />
subsidy shall be restricted to 15% <strong>of</strong> the cost <strong>of</strong> machinery/equipment procured by the<br />
<strong>Jute</strong> Mills.<br />
ii) The subsidy will be Payable only in Rupees in India. The amount will be released after<br />
the jute mill installs the eligible machinery and certifies its operation. The eligible<br />
machinery may be purchased from out <strong>of</strong> the loan <strong>of</strong> any financial institution / bank /<br />
leasing company or from the available resources <strong>of</strong> the jute mill.<br />
9. Conditions for Grant <strong>of</strong> Subsidy :<br />
Grant <strong>of</strong> subsidy under the scheme is subject to the following conditions:<br />
i) When any jute mill acquires and installs in its declared premises the eligible machinery<br />
for upgradation and/or modernisation from its own resources,<br />
(a) Such acquisition and/or installation shall be preceded by an intimation to JMDC in<br />
writing about the intention for such up-gradation and / or modernisation along with the<br />
scheme. JMDC will involve IJIRA or any other technical institution, as considered<br />
appropriate by the Empowered Committee for technical appraisal. In principle decision<br />
for eligibility <strong>of</strong> the scheme for subsidy will be intimated by JMDC within 30 days from<br />
the date <strong>of</strong> receipt <strong>of</strong> such an intimation.<br />
(b) Such acquisition has to be made from a list <strong>of</strong> vendors approved by the Empowered<br />
Committee in consultation with IJMA / IJIRA. The Empowered Committee as defined in<br />
clause 12 may include and delete the names <strong>of</strong> the vendors from the said list as and when<br />
deemed necessary.<br />
ii)A jute mill may acquire and install in its declared premises the eligible<br />
machinery/equipment for upgradation and/or modernization from any source as permitted<br />
by the financial institution / bank / lease company.<br />
iii) A <strong>Jute</strong> Mill receiving subsidy under clause 8 above shall not be eligible to claim<br />
assistance under the TUF scheme or from any scheme <strong>of</strong> the MOT for the same<br />
equipment / machinery. Similarly, any beneficiary under the TUF scheme or from any<br />
scheme <strong>of</strong> the MOT will not be eligible for availing subsidy under this scheme for the<br />
same equipment / machinery.<br />
iv) The jute mill will not be allowed to dispose <strong>of</strong> the items for which subsidy has been<br />
disbursed within a period <strong>of</strong> 5 years from the date <strong>of</strong> receipt <strong>of</strong> subsidy except with the<br />
prior approval <strong>of</strong> JMDC.<br />
v) In case it is found that the subsidy has been availed <strong>of</strong> on the basis <strong>of</strong> any false<br />
information, the company shall be liable to refund to JMDC the subsidy availed <strong>of</strong> along
with interest to be charged from the date <strong>of</strong> disbursal to the date <strong>of</strong> refund. The rate <strong>of</strong><br />
interest shall be the prime lending rate <strong>of</strong> JMDC’s banker at the time <strong>of</strong> invoking this<br />
penal clause.<br />
10. Procedure for Applying for Subsidy :<br />
i) The jute mill company will make an application for subsidy, in the prescribed format<br />
along with the scheme for up-gradation and / or modernisation duly appraised by the<br />
financial institution, alongwith necessary documents in support <strong>of</strong> the loan or such<br />
documents as required by JMDC. This procedure will be followed if the machinery for<br />
upgradation / modernization is purchased from a sanctioned loan <strong>of</strong> any financial<br />
institution / bank / leasing company.<br />
ii)In case a jute mill acquires and installs machinery and/or equipment for up-gradation<br />
and/ or for modernisation, from its own resources, the <strong>Jute</strong> Mill will make an application<br />
for subsidy in the prescribed format. Pro<strong>of</strong> <strong>of</strong> the installation and / or acquisition <strong>of</strong><br />
machinery and other documents that may be required by JMDC will be provided by the<br />
jute mill. Such acquisition and installation will be inspected by <strong>Jute</strong> <strong>Manufactures</strong><br />
<strong>Development</strong> <strong>Council</strong> or its duly authorized representative or the Directorate <strong>of</strong><br />
Industries <strong>of</strong> the respective State Govt. or IJIRA or any other agency to be decided by the<br />
Empowered Committee.<br />
iii) JMDC shall settle such claims within 30 days <strong>of</strong> the receipt <strong>of</strong> the same. JMDC shall<br />
notify such additional procedural guidelines as and whenever required.<br />
11. Funding :<br />
<strong>Jute</strong> <strong>Manufactures</strong> <strong>Development</strong> <strong>Council</strong> shall from its own budget allocate annually<br />
such amount as may be deemed necessary for the scheme every year.<br />
12. Committee :<br />
An Empowered Committee, the composition <strong>of</strong> which is given below, will look into all<br />
aspects <strong>of</strong> the scheme including advising JMDC on the modus operandi and on<br />
implementation <strong>of</strong> the scheme.<br />
• <strong>Jute</strong> Commissioner – in the chair<br />
• Secretary, JMDC – convenor<br />
• Two representatives <strong>of</strong> <strong>Ministry</strong> <strong>of</strong> <strong>Textiles</strong><br />
• Director, IJIRA, Kolkata<br />
• Director, CRIJAF, Kolkata<br />
• Any 3 members representing industry to be selected by Chairman, JMDC.<br />
EMA Scheme Extended by GoI >><br />
The External Market Assistance (EMA) Scheme operatedby JMDC has been extended by the Central Government for a<br />
further period <strong>of</strong> one year w.e.f. 01-04-2003 on the following items at rates indicated against them :
Sl.<br />
Rate <strong>of</strong> EMA on FOB Value<br />
Category<br />
No. Realisation<br />
1 <strong>Jute</strong> or jute blended/ union fabrics<br />
5%<br />
(subject to a cap <strong>of</strong><br />
Rs. 5000/tonne)<br />
(FOB above Rs. 50000/tonne)<br />
2 <strong>Jute</strong>/blended/union carpets/ mats/ matting 5%<br />
3 <strong>Jute</strong> handicrafts 5%<br />
4 <strong>Jute</strong> wall-hangings 5%<br />
5 <strong>Jute</strong> or jute blended garments and made ups 5%<br />
6 Food grade jute products 5%<br />
7 Geo-textiles 10%<br />
8 <strong>Jute</strong> Yarn, jute twine and value added hessian cloth and jute or jute<br />
7%<br />
blended/ union fabrics (FOB above Rs. 50000/tonne except for jute<br />
yarn and jute twine) exported by 100% EOUs<br />
The benefit under Sl. No. 8 will, however, not be in addition to the eligibility criteria in respect <strong>of</strong> products mentioned<br />
against Sl. No. 1. An additional 5% EMA shall be made available on Food Grade <strong>Jute</strong> Products ( including Cloth) exported<br />
to 71 enlisted Latin/Central American and African countries. The EMA would also be available on jute geotextiles, hessian<br />
and sacking made-ups in addition to DEPB benefits admissible on these items.<br />
< Top ><br />
JMDC Incentive Scheme for Mordernisation <strong>of</strong> <strong>Jute</strong> Industry Amended >><br />
By a letter dated 19th September, 2003, the Union <strong>Ministry</strong> <strong>of</strong> <strong>Textiles</strong> conveyed its approval to the following<br />
amendments in the scheme :<br />
a) The "Objective" <strong>of</strong> the Scheme has been amended so as to facilitate induction <strong>of</strong> modern technology in new jute mills<br />
to be set up in jute growing areas, in addition to modernisation and upgradation <strong>of</strong> technology in existing jute mills as<br />
originally envisaged.<br />
b) The "eligibility criteria" has been amended by providing for grant <strong>of</strong> a higher subsidy @20% <strong>of</strong> the cost <strong>of</strong> machinery (<br />
in place <strong>of</strong> normal rate <strong>of</strong> 15%) in respect <strong>of</strong> new modern jute mills set up in new locations in jute growing areas having<br />
inadequate jute processing facilities, but only after such mills pay cess for at least 3 months on products manufatured by<br />
them.<br />
DutyEntitlementPass Book (DEPB) Scheme.<br />
On the recommendation and follow-up by JMDC, the Director General <strong>of</strong> Foreign Trade<br />
(DGFT) under <strong>Ministry</strong> <strong>of</strong> Commerce & Industry has extended the benefits under DEPB<br />
Scheme to major jute products,viz. <strong>Jute</strong> Soil Saver, <strong>Jute</strong> Yarn/Twine, Hessian cloth &<br />
Hessian made-up and Sacking cloth & Sacking made-up with effect from 9 th July 2002.
The DEPB rates applicable to the major jute products with effect from 1 st April, 2003 are<br />
as follows :<br />
Product Group : Miscellaneous Product Code : 90<br />
S.No. Description DEPB Rate<br />
%<br />
24. <strong>Jute</strong> Soil Saver 5.00<br />
25. <strong>Jute</strong> Yarn / <strong>Jute</strong> Twine 5.00<br />
26. aHessian cloth<br />
7.00<br />
bHessian made-up<br />
7.00<br />
27. aSacking cloth<br />
10.00<br />
bSacking made-up<br />
10.00<br />
Value cap for<br />
DEPB entitlement<br />
Rs.40/Kg<br />
Rs.55/Kg<br />
Rs.30/Kg<br />
Rs.40/Kg<br />
Product Group : Plastics Product Code : 63<br />
Sl.No. Description DEPB Rate<br />
%<br />
Value cap for<br />
DEPB<br />
entitlement<br />
34. Hessian Bags with LDPE/HDPE/PP 8.00 Rs.175/Kg<br />
liner/Lamination and with/without<br />
Zipper/Handle<br />
37. <strong>Jute</strong> Bags with HDPE<br />
liner/ LDPEliner/ Lamination<br />
with/without Zipper/Handle<br />
8.00 Rs.175/Kg.<br />
With introduction <strong>of</strong> DEPB scheme with effect from 9 th July, 2002 export<br />
performance <strong>of</strong> these exportable items during July’02 - March’03 have been shown<br />
below. Export during July’01-March’02 from same source is also shown alongside for<br />
comparison.<br />
Qty.:<br />
000’M.Ton<br />
Value<br />
:Rs./Million
July’02-March’03 July’01-March’02<br />
Product Qty. Value Qty. Value<br />
% increase<br />
(+) or decrease<br />
(-) over<br />
July-Mar.’01<br />
Hessian 67.0 2342.92 27.0 957.39 (+) 145%<br />
Sacking 36.4 1245.58 11.5 385.62 (+) 223%<br />
Yarn 71.3 2049.72 61.3 1759.49 (+) 16%<br />
Export <strong>of</strong> All <strong>Jute</strong><br />
goods<br />
196.9 7854.30 113.7 4426.29 (+) 77%<br />
It reveals from the above table that after introduction <strong>of</strong> DEPB, export<br />
performance <strong>of</strong> eligible items <strong>of</strong> jute products has shown a steep increasing trend as<br />
compared to corresponding period <strong>of</strong> previous year. While export <strong>of</strong> hessian has<br />
registered an increasing trend by 145 per cent, sacking and yarn have increased by 223<br />
per cent and 16 per cent respectively. Moreover, this upward trend in export is mainly<br />
attributable to DEPB coupled with grant <strong>of</strong> support under EMA to various diversified jute<br />
products which made export prices <strong>of</strong> jute goods quite competitive in world markets and<br />
contributed to a healthy increase in exports.<br />
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