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A Tea Advisory Committee has been constituted in the Ministry of Commerce to monitor the implementation of 25-point recommendations of the Stakeholders Conference. This was announced by Shri Kamal Nath, Union Minister of Commerce & Industry, here today evening at the concluding session of the two-day Stakeholders Conference on Challenged before the Tea Industry. The Committee would consist of representatives of all the stakeholders to monitor the implementation. The Stakeholders Conference has proposed the formation of Special Purpose Fund with revolving corpus of Rs.1000 crores for replantation/rejuvenation of tea plants. This will target 1,70000 hectares as replantation over 15 years @ 11500 hectare per annum and 42000 hectares as rejuvenation over 15 years @ 2800 hectares per annum. Referring to the 25-point recommendations made by the Conference, Shri Kamal Nath said that he would closely monitor the implementation of it and would meet the respective State Chief Ministers concerning the state-specific issues. He said that the government would hold another Stakeholders Conference in 6 month to take stock of the implementations and would review it, if necessary. The government is committed to restore the past glory of the tea industry, the Minister said and asked the representatives of tea industry to come forward in this endeavor.
Following are some of the recommendations of 25-points proposed by the Conference:
Considering the fact that India is the largest consumer of tea in the world, and the practice of tea drinking is spread throughout the country, in both rural and urban areas, tea may be declared as the "national drink" of India.
Tea Board subsidy for replantation/rejuvenation should be enhanced to 40% from existing 25%. For this the plan funds to the Board may be appropriately enhanced.
The formation of Special Purpose Fund with revolving corpus of Rs.1000 crores for replantation/rejuvenation should be approved by the Government of India. This will target 1,70,000 hectares as replantation over 15 years @ 11,500 ha. per annum and 42,000 hectares as rejuvenation over 15 years @ 2,800 ha. per annum.
Quality upgradation is the key to the revival of the small sector. In order to provide regular extension and marketing support to small growers and manufacturers, a Small Grower Development Agency, on the lines of the ones successfully operating in Sri Lanka and Kenya, may be set up under the aegis of the Tea Board. Such an agency may be given appropriate regulatory powers in respect of the small sector.
Since tea is the common man’s beverage, the VAT rate for tea should be fixed at 4% instead of the proposed 12.5% as its cascading inflationary impact will severely jeopardize efforts towards demand growth.
Rationalization of Agricultural Income Tax needs to be considered by the State Governments so that the ultimate tax payable in the tea sector is in line with the taxes on income. Some state Governments viz., Assam and Tamilnadu have already done this.
There is a plethora of Central and State legislative measures that are applicable to the tea industry. These may be reviewed urgently by a Committee to be set up by the Government of India in consultation with the State Governments to examine whether any unintended impediments exist in the functioning of the tea industry as a consequence of the application of these laws.
Acknowledging that the situation in the plantations has undergone vast changes over the past 50 years, a review of the Plantation Labour Act, in particular, should be expedited in line with the Inter-Ministerial Committee recommendations keeping in mind the interest of all stakeholders.
Inter-Ministerial Committee recommendations on Social Cost should be further looked into as the industry welcomes the entry of Government agencies in the creation, development and management of social infrastructure within the tea estates – whether it be schools, hospitals or roads/bridges etc. The scope of utilizing funds under the RIDF Scheme of NABARD should be enlarged.
Region wise treatment of replantation and rejuvenation work to suit the special needs of the industry based on local conditions may be introduced by the Tea Board.
While the provisions of Prevention of Food Adulteration Act need to be strictly enforced to prevent adulterated and spurious teas entering into the market, there is a need to amend the Act to allow, in line with international practices, the use of Nature Identical flavours in tea as a part of product innovation.
Incentive for production of Orthodox teas needs to be announced as soon as possible. The industry will ensure that all efforts are made by it to increase the production of orthodox teas by 20 m.kgs., every year as an enabler towards export.
The auction is the time-tested means of disposal of teas. However, the system needs to be reformed and strengthened and the transaction and time cost involved needs to reduced. To help the industry to address the issue of selling cost one option is ex-garden auction sale. Producer should also be allowed to bid for their own teas.
Product innovation needs to be encouraged to improve the acceptability of tea. Excise duty on value added teas may be reduced.
Consideration of Assam and Nilgiri Teas as Geographical Indications needs to be examined by the industry and the Government.
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