The Centre proposes merging the Jute Corporation of India Ltd (JCI) and the Cotton Corporation of India Ltd (CCI) to form a larger public sector entity to handle all textile fibre procurement. To that end, a request for proposal (RFP) has been issued in order to appoint a consultant for the merger of both PSUs under the Ministry of Textiles.
"The Government of India has proposed merging the JCI and the CCI, both of which are public sector undertakings." "A new entity with a broader scope of business covering developments of all types of textile fibres is to be formed," according to the RFP document. Sources confirmed the development, saying the proposal was in its early stages.
JCI was established in 1971 as a price support agency for the procurement of raw jute/mesta from growers at the government's declared minimum support price (MSP). JCI's market presence has stabilized raw jute prices, protecting the interests of approximately four million jute farming families.
According to the most recent financials available on the JCI website, the PSU had a turnover of 169.25 crore and a profit after tax of 15.39 crore in 2019-20. It purchased approximately 1 lakh bales of jute in 2019-20 and was expected to purchase 0.79 lakh bales in 2020-21.
Similarly, the CCI, which was established under the Textiles Ministry in 1970, has been conducting price support operations whenever the market price of cotton falls below the MSP, providing a safety net to growers. Cotton cultivation employs an estimated 58 lakh farmers in the country, accounting for roughly one-fourth of global output.
Aside from MSP operations, CCI, which employs approximately 750 people, also conducts commercial purchasing operations to meet the raw material requirements of the domestic textile industry.
CCI procured approximately one-third of the cotton produced in the country, or approximately 200 lakh bales, in the last two cotton seasons (2019-20 & 2020-21), and disbursed more than 55,000 crores directly into the bank accounts of approximately 40 lakh cotton farmers. The Centre approved MSP funding of Rs 17,408 crore to CCI for cotton seasons 2014-15 to 2020-21 for support toe farmers in November.
According to the Textiles Ministry's annual report for 2020-21, CCI had revenue of 6452.23 crore and a profit of 38.07 crore in 2019-20. CCI had a turnover of 2832.45 crore and profits of 50.99 crore in the previous fiscal year 2018-19. CCI purchased 84.51 lakh bales of cotton in 2019-20, up from 11.03 lakh bales the previous year.
