Kolkata: The Central government is considering a package for the tea industry, the junior trade minister said on Wednesday. “Social cost is a major issue with the tea industry. The government is taking this matter very seriously and shortly we are going to come out with a package for this industry,” Jyotiraditya Scindia told reporters.
Social cost includes all the basic amenities which are provided to labours by the plantation owners, he said.
“Social amenities adds around Rs7 per kg in the production cost, and we have proposed that half of this cost should be borne by the Centre and the state government,” said Indian Tea Association, chairman, Aditya Khaitan.
This would be in addition to the Rs6 billion alloted this year through the Tea Board under Special Purpose Tea Fund (SPTF) for re-plantations and rejuvenation in tea gardens, he added.
The SPTF was announced in 2005, under which federal government would give Rs42 billion grant to the tea industry over a period of 15 years.
An industry expert said the proposed package would be helpful in reducing the production cost, boosting global competitiveness of Indian tea.
“A package for this would unable us to reduce the fixed (production) cost and be more competitive, as in countries like Sri Lanka and Kenya, the producers do not bear such cost,” he added.
The minister said the industry should look to improve the quality of the tea produced and focus more on exporting the orthodox variety of tea rather than crushed tear and curl (CTC) variety leafs.
“The real market for export in the tea sector lies in the orthodox variety, whereas we only export CTC leafs. So we should look to reorganise our tea export basket,” Scindia told an industry chamber.
“There is also a need to focus on more value-added products like the tea-bags,” he added.
Debt relief package
The federal government is also planing to come out with a separate and comprehensive debt-relief package for the plantation sector, Scindia said.
“Government is very serious about addressing the problems of indebtedness of the plantation sector. A note has been sent to the Cabinet Committee on Economic Affairs (CCEA), so we should come out with a package shortly,” he added.
The package would particularly address small and medium plantation growers, he said.