The Telegraph
Since 1st March, 1999
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Delhi lines up sops for tea

New Delhi, Sept. 16: Delhi today held out hope for the recession-hit tea industry by promising to draw up a comprehensive financial package before the next Parliament session.

Commerce and industry minister Kamal Nath told the media on the sidelines of the Stakeholders' Conference on Challenges before the Tea Industry that the package would include tax and banking incentives.

He asked representatives of the industry to come up with recommendations that would enable the government to prepare a suitable package to solve the entire gamut of finance, taxation, productivity and labour-related problems.

Nath said a 'full strategy' had to be drawn up to take the tea industry out of the vicious circle of low profits and inadequate investment.

'Due to a steep fall in prices over the past few years, the level of returns in the tea industry is rather low. The decline in profitability has given rise to a vicious circle in which adequate investment in tea gardens is not taking place. This has resulted in lower productivity, which, in turn, further affects profitability.'

The minister expressed concern over plantations being closed down because of low profitability. 'A number of plantations have been closed down and thousands of workers rendered jobless. Our government is deeply concerned with this grave situation and we are determined to rectify it.'

Nath lamented the lack of investment in tea gardens, which, he said, was one of the reasons for the slide. He pointed out that nearly one-third of tea bushes were too old to be qualitatively or quantitatively productive.

The minister said research and development must be on a sound footing for the industry to meet the challenge of maintaining quality. He stressed the need to extend adequate technical support to small gardens, attributing much of the success of the Kenyan and Sri Lankan tea sectors to the growth of small growers.

In India, the tea industry directly employs over 1 million people and twice that number indirectly.

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