Tripura tea in doldrums, TAI for bailout package

AGARTALA, April 18 ? Dogged by serious financial crisis, Tripura tea industry has demanded some positive steps from the State Government to save the gardens from inevitable closures. The Tea Association of India, Agartala branch, recently in a letter to Chief Minister Manik Sarkar outlined the problems that put the State?s tea gardens in the red. PK Sarkar, secretary of the TAI in his letter said, tea gardens in Tripura are running at losses for the last several years and now unable to come out of this situation without taking immediate corrective measures most of the gardens are on the ?verge of closure?. The tea companies faced a bitter financial year as tea prices fell much below the cost of production. ?While the average price realisation was only about Rs 45 a kg in the auction market, the cost of production has gone above Rs 60 a kg. Depressed exports, and lower offtake in the domestic market, have also affected prices adversely,? Sarkar said. According to Tea Board sources, all India tea exports during the year 2001 dipped by 13.01 per cent to 179.79 m kgs from 206.82 kgs last year. The import of 15 for re-exports has also led to lower demand at home in a year when production has touched a high of 854 mn kgs in 2001. To deal with the present critical financial situation, the association suggested that State Government must take remedial measures at the earliest. The TAI secretary demanding relief in Agriculture Income Tax, said the tea gardens of the State are paying the highest Agricultural Income Tax in the country. ?In a bid to promote tea industry, the West Bengal Government has reduced Agricultural Income Tax to 45 per cent from last year. But unfortunately, though the West Bengal Agricultural Income Tax Act is followed in Tripura, the rate has not been reduced which has caused a depression in fund retention.? The TAI has also pointed out that Assam has also drastically reduced the Agricultural Income Tax to rejuvenate the tea industry there. The current rates of Agricultural Income Tax stands as : ?Tripura 60 per cent, West Bengal 45 per cent and Assam 45 per cent.? The TAI suggested that Agricultural Income Tax should be substantially brought down from the current rate or be totally suspended from a period of atleast next five years so that the internal generation of fund could be used for development purposes for the survival and restoration of viability of tea gardens in this state. Demanding withdrawal of Sales Tax, TAI said to avoid cash flow problems of gardens, the present Sales Tax at the rate of 8 per cent imposed on sale of local tea is a big deterrent for tea sector in Tripura. TAI said the sales tax should be withdrawn forthwith. It will not only facilitate larger sale of the tea locally but also will bail out the gardens from the financial difficulties. Citing examples the association said, Sales Tax has been reduced to 4 per cent in Tamil Nadu. The TAI has also taken strong note of power related problems the gardens are facing here. It said, the supply of power to tea gardens is most erratic and unsatisfactory. As a result, the gardens are adversely affected as making of quality teas needs constant supply of power in the factories. ?To identify various problems of power supply, a committee comprising of representatives of the Power Department. Directorate of Industries and the Tea Industry was constituted by the State Government in August last year. The committee was supposed to submit its report within two months.? While demanding supply of ration to tea gardens directly from FCI, the association also sought transport subsidy. Transport subsidy was introduced vide Government of India Notification on July 23, 1971, and was subsequently amended on July 28, 1993, to provide transport subsidy for a period of five years from the date of commencement of commercial production. The transport subsidy was about 90 per cent of the total transports bill of tea consignments sent to destinations beyond Siliguri. This facility was withdrawn from October, 1998. The subsidy was disbursed by the State Government. The TAI demanded that Capital Investment Subsidy at the rate of 25 per cent of capital investment made by gardens should be re-introduced at an early date. ?State should set up a ?Tea Cell? to deal exclusively with the tea industry. The Cell may comprise of representatives from labour, power, agriculture and industry which will look into the new proposals as well as problems of existing tea gardens,? the TAI letter suggested.