Fabrication of industrially valuable PLA based coated abrasive and packaging products are made using bio-polymeric blends of PLA-PEG without involving the use of hazardous halogen based solvents, such as, chloroform and dichloromethane. Accordingly, an attempt has been made in our study to substitute a relatively less harmful ethyl acetate (EA) solvent in place of the toxic halogenated solvents to dissolve both PLA and PEG polymer blends to produce an environmentally safe PLA-PEG coating and film formulation in EA. This attempt in turn eliminates and replaces the use of non-degradable polymer coatings, (such as, acrylates, PVC, and synthetic latex) on Kraft paper thereby contributing to sustainability and environmental safety besides reduction in waste disposal to realize a cleaner environment. PLA is a hard and brittle polymer, which restricts its unexplored industrial user applications. On the other hand, PEG toughens the brittle PLA due to its plasticizing action. Hence, PLA-PEG polymer blends were prepared using increasing percentage of PEG content systematically from 5% to 25% and the % of PEG in PLA was optimized to 10% to get the maximum toughening effect in PLA-PEG formulation, which is ascertained by differential scanning calorimetry analysis. FTIR analysis confirmed the possible interaction that occurred between PLA and PEG, due to which a shift in vibration frequency of the PLA carbonyl group is observed. The other important test results from mechanical properties, contact angle, surface roughness, Cobb values, WVTR, and SEM analysis support to reveal that PLA-PEG (10%) blend is the best coating and film forming material on Kraft paper for the fabrication of industrially valuable both coated abrasive and packaging products to demonstrate its dual purpose applications.