Kamal Nath: Saving grace

July 21: Interest subsidy and more soft loans will form part of the fresh package that the government is preparing to revive sick tea gardens. A capital subsidy for replantation in old tea gardens is also on the cards.

The Centre will provide interest subsidy as part of the revival package which would include promoters’ contribution, further loans from the banks concerned and restructuring of accounts. The package will also cover the tea gardens that the governments of Assam and Bengal plan to privatise.

The scheme will be financed from the special fund created out of additional excise duty collections.

“We are preparing a special tea package...We are concerned and cautious and are according highest priority to the revival and rejuvenation of the tea industry,” commerce minister Kamal Nath told the Lok Sabha today.

The minister was responding to a ‘calling attention motion’ on the situation arising out of the closure of a number of tea gardens in Bengal, Assam, Tamil Nadu and Kerala, resulting in the unemployment of thousands of workers and steps taken by the government.

Indian Tea Association chairman C. K. Dhanuka said, “The minister has assured us that the Rs 60-crore deposited as additional excise duty by the industry would be released on September 15. The money will be used for orthodox tea production, generic promotion and research and development. We hope the package will be beneficial for the industry.”

The minister said the major challenge facing the industry was replantation and rejuvenation as 50 per cent of bushes in the gardens were degraded.

Dhanuka added that the industry needs to uproot 20,000 hectares of land over a period of 15 years at a cost of Rs 4,000 crore.

Nath said the Centre wanted state governments to tighten norms as small growers were not following the auction rules and the Plantation Labour Act.

The minister, however, said imported tea, mainly from Sri Lanka, did not affect the domestic industry as these were essentially re-exported after processing.

An inter-ministerial committee, set up by the ministry of labour, has studied issues relating to the plantation sector, including social costs, provident fund dues of plantation workers and taxation structures.

The continuous fall in prices of tea, coupled with high costs of production, sluggish domestic demand and increased age of tea bushes have adversely affected the viability of tea gardens — particularly the medium-sized and financially weak ones —resulting in closure and abandonment of some tea gardens.

At present, 54 gardens are closed, of which 20 are in Bengal, 17 in Kerala, 11 in Assam and six in Tripura. About 28,00 workers are affected due to the closures. Some of these workers are reported to be plucking green leaf by forming workers committees.

“However, there is some improvement in the auction prices of tea during the last few months. If this trend continues, it will bring immense relief to the Indian tea industry,” Nath added.