Guwahati, Nov. 11: The Centre’s assurance that it would continue to fund electronic auctions in the Twelfth Plan has come as a huge relief for the tea industry.
A tea industry official said Union commerce minister Anand Sharma conveyed the decision at a stakeholders’ meeting on tea in Calcutta recently.
“The Tea Board of India will continue to fund electronics auctions during the Twelfth Plan,” the official said, quoting the minister, and added, “The entire tea fraternity has welcomed the Centre’s assurance, as otherwise, they would have been forced to shell out money from their own pockets.”
The meeting, which was attended by top industry and ministry officials, also discussed various issues afflicting the country’s tea industry.
The fund support of Rs 5 crore for the six auction centres in Guwahati, Jalpaiguri, Siliguri, Coonoor, Coimbatore and Kochi was to come to an end by the year-end, and the Tea Board had suggested that the industry should contribute equally to enable electronic auctions to continue.
Roughly 500 million kg of tea is traded electronically every year.
The Guwahati Tea Auction Centre (GTAC) had requested the Tea Board of India for five more years of support for carrying out electronic auctions.
The Tea Board provides around Rs 1.3 crore a year for carrying out electronic auctions at the centre through the NSE.IT — a National Stock Exchange of India Ltd subsidiary, which had designed the GTAC e-auction system.
The idea behind electronic auctions is to allow members to access the auction process anywhere to improve the system’s efficiency, as the traditional process is restricted to the auction hall only.
Other advantages of e-auctions are to reduce transaction cost and auction time and to establish a more robust price discovery mechanism.
Sources said the consultative committee of plantation associations had conveyed to the Tea Board that the electronic auction system should be made more robust and the problems that are currently being faced should be fully resolved.
In the meeting, the minister called for a report on the functioning of Tea Board promotion offices abroad.
The minister said the social cost issue was being examined. The tea industry had time and again called for sharing of social cost, saying that nothing had been done on this front.
The other issues on which the minister gave support were providing support to infrastructure in warehouses and use of organic fertilisers.