Calcutta, March 20: The city-based tea industry today greeted the “positive step” of lowering the agricultural income-tax to 30 per cent from 45 per cent as a “good gesture” that is recognition of the “bad days” it is going through.
The 15 per cent tax reduction in one go follows the 5 per cent cut from 50 per cent in the 2001-02 budget, which industry leaders said would benefit the tea business in the long run.
Bharat Bajoria, president of the Indian Tea Association, said profitability of the tea industry was under stress for the past three to four years. “It is good that the state government has recognised the difficulties of the industry. With the industry already under severe recession, the sacrifice on revenue would not be significant as hardly anybody was in a position to pay any agricultural income-tax,” Bajoria said.
Price realisation at the two tea-auction centres in the state was under severe strain for the past four years. Average price realisation in the Calcutta auction was about Rs 75 per kg in 2002 against Rs 87.8 per kg in 1998. In Siliguri, the average per kg realisation was around Rs 60 per kg last year against Rs 75 in 1998.
The state has 1,550 tea estates, of which 343 are large and the rest small. Total production of tea between January and November 2002 by these gardens, mostly located in north Bengal, was lower at 175.8 million kg against 181 million kg in 2001.
C.K. Dhanuka, a past president of the association, also welcomed the move, saying it would help the industry in the long run. “There was hardly any profitability in the industry now and we only hope things would look up,” he said.
The Centre, too, introduced a fund scheme in the 2003-04 budget to help the tea industry improve production and exports.