To revive the economy of the tea sector in Assam, the state finance minister Himanta Biswa Sarma Friday announced four schemes which include loan interest subvention, increased subsidy on orthodox tea manufacturing units and withdrawal of agricultural income taxes.
The scheme primarily focused on the production of the orthodox tea and processing as this variant of tea has higher export value as compared to the CTC (crush-tear-curl) tea variant. “The orthodox variant produced in Assam is completely dependent on the exports. In a view of that, the government has undertaken several steps to boost its production which will help the economy,” said Sarma while addressing a press meet in Guwahati.
The minister announced that the state finance department will grant 3 per cent loan interest subvention to tea gardens and industries which wishes to take a working capital loan from any commercial banks. “We have decided to grant three per cent subvention with a maximum cap up to rupees 20 lakh for any tea industries which takes a working capital loan from any commercial banks,” added Sarma.
Owing to the crunched liquidity caused due to Covid-19, the Assam tea industry representatives in May urged the state government to raise the working capital limit with subvention and increase in the subsidy.
To implement the Assam “tea mission” mentioned in the state budget for the financial year 2020-21, the government has increased the subsidy for orthodox tea to Rs. 7 per kg from the existing Rs. 3 per kg. “Adding to the existing Rs 3 subsidy per kg by the Tea Board of India, the total subsidy now goes up to Rs. 10 per kg in the production and export of the orthodox variant,” said Sarma.
He mentioned that the government has decided to grant a 25 per cent subsidy to any tea processing industry which whishes to purchase an orthodox tea manufacturing unit. Moreover, the minister informed that the government has decided to withdraw the agricultural income tax for three years across the tea gardens in Assam.
“All these will revive the economy and further support the tea sector in Assam to export the orthodox variant. We are planning to focus more on orthodox and will help the industry with CTC producers to replace with orthodox,” Sarma highlights.
The scheme announced by the finance minister is mentioned in the Assam budget of 2021-21 with a new initiative “tea mission”. “These steps and schemes will help the state tea sector with increased profits. This will yield higher export results in the industry,” said a member of Assam Tea Planter’s Association.
While announcing the state budget, Sarma in March this year said, “Our government has been working closely with the tea Industry representatives to address these [production] issues and have understood that the long-term solution lay in re-calibrating the tea production mix in Assam from 90:10 for CTC: Orthodox to a more sustainable ratio…”
The tea export from India is stagnant at around 250 million kgs annually. Assam accounts for 51 per cent of India’s tea production by volumes and around 11.7 per cent of the world.
