The Indian Tea Association (ITA) and apex chambers CII and FICCI welcomed Assam government’s initiative to improve the quality of life of tea workers and offer sops to the tea plantation sector to tide over the difficult times.
In his Budget proposal for 2020-21, Assam finance minister Dr. Himanta Biswa Sarma announced that the 7.21 lakh tea labourers will get ₹50,000 each as payment of gratuity on retirement. The budget was submitted on March 6.
This apart the third tranche of ongoing financial support of ₹3,000 each will be paid through bank transfer. Also, tea gardens will get substantial share of the government’s fresh rural development initiatives. This includes construction of over 100 high schools in tea estates.
The plight of tea workers and their inadequate access to civic amenities had been a long-debated issue. Accordingly, the interventions were much required.
However, to help the industry the government announced Orthodox (tea) production subsidy of ₹7 a kg. This coupled with subsidy on Orthodox machinery to manufacturing units that are commencing operations after April 1, 2020 is expected to improve returns of planters.
On the one hand, shift to orthodox may improve export opportunities. On the other hand, production cut in CTC may go a long way in correcting the demand-supply imbalance, thereby improving CTC prices.
Assam has also announced three per cent interest subvention on term loans and working capital loans. However, the modalities are yet to be worked out.
ITA termed the State government’s decision to launch ‘Tea Mission’ a visionary step that would help in long-term financial sustainability of the industry.
According to S K Barua, chairman of CII North Eastern Council, the three-year tax holiday on agricultural income coupled with subsidy for orthodox production will provide a big boost to the plantation sector.
Ranjit Barthakur, chairman of FICCI North East Advisory Council, said for the first time Assam recognized the problems faced by the tea industry.