The Cabinet on Wednesday approved extension of norms for mandatory packaging of foodgrains and sugar in material for the Year 2019-20.

The decision taken by the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, mandates that 100 per cent of the foodgrains and 20 per cent of sugar will be mandatorily packed in diversified bags.

"The decision to pack sugar in diversified jute bags will give an impetus to the diversification of the jute industry. Further, the 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 approval will benefit farmers and workers located in the Eastern and North Eastern regions of the country particularly in the states of West Bengal, Bihar, Odisha, Assam, Andhra Pradesh, Meghalaya and Tripura," an official statement said.