The Union government is planning to invoke a section of the Tea Act to take over closed tea estates and pass them on to buyers.
In this connection, the government has given an ultimatum to 21 tea estates in West Bengal and Kerala. The tea estate owners have a month to reopen the farms or else the government will take over the land and sell the property. This is the first instance in which the government has invoked the Tea Act to address a problem.
Minister of state for commerce Jairam Ramesh said the one-month notice was given to 13 closed tea estates in West Bengal on 31 July.
In Kerala, the deadline will expire on 3 September because the notices were given out on 4 August.
Under Section 16(E) of the Tea Act, 1953, if a garden remains closed for more than three months, the government can take over the property without investigation and find a new owner. A joint committee, comprising senior commerce ministry and labour ministry officials, the Tea Board and the state governments, will be formed to review the offers for takeover once the one-month notice period expires.
Many tea estates across India have remained closed for more than five years and several attempts to reopen them have failed, Ramesh said. Of the 17 closed gardens in Kerala, eight have been reopened but in West Bengal only one of the 14 closed estates has resumed operations.
The government in the past had made provision for a Rs60 crore relief package for the closed estates that would include waiver of all dues to the Tea Board and funding of provident fund of tea estate employees.
As part of the financial aid package, the loans taken by the estates from banks and other financial institutions, running into around Rs58 crore, would be converted to medium-term loans and all penalties for interest non-payment would be written off.
Despite these measures, several tea estates owners have not taken steps to reopen the tea gardens. In Kerala, four estates of the RBT 1 Group have reopened, along with three of the Manarcaud Group and the Bonnacard estate in Thiruvananthapuram. While the RBT 1 group reopened its factory, the Manarcaud Group promised Ramesh to reopen their factory by early 2008 and start full production by the first quarter of fiscal 2008-09.
Ramesh said there would be surprise monthly inspections by the Tea Board to monitor the working of the estates. Over the weekend, he visited a closed factory of the RBT 2 Group, which runs five estates. The owners blamed poor condition of the tea estates for the closures but the gardens appeared to be well off, while the workers live in poverty, he added.