Committee recommends additional excise of Rs 1 per kg of packet tea

Kochi, Oct 3 (UNI) A committee set up by the union commerce and industry ministry has recommended an additional excise duty of Rs one per kg on packet tea to mobilise funds to subsidise social services provided to the tea garden workers.

This duty, to be levied only on tea that is not exported, is expectd to yield about Rs 35 crore per year. The committee, under the chairmanship of Addl. Secretary (Plantation), Commerce Ministry, has recommended that these funds be made available to the Tea Board for subsidising the social service facilities, union Minister of State for Commerce Jairam Ramesh told reporters here recently.

Under the Plantations Labour Act, it is the employer (tea estate owner), who has to provide the workers medical, health, drinking water and educational facilities.

Noting that the Indian tea industry is presently in a state of crisis due to declining prices and stiff competition in the international markets, the committee has found merit in the owners' plea that the cost of providing these services be shared by the government by covering them under the various ongoing schemes of the Central and state governments.

According to the committee, the cost of providing the social infrastructure works out to about Rs 3.44 per kg in South India and Rs 4.12 per kg in North India. With the average price of tea being Rs 70 per kg in the north and Rs 45 to Rs 50 in the south, the impact of social costs works out to five to eight per cent.

''The profitability of the industry at the current level of prices does not provide the way to meet this cost, which works out to Rs 300 crore, which on an industry turnover of Rs 7,800 crore, is a burden too high,'' the committee noted.

In other measures to increase the revenue of tea estates, the committee has recommended that the plantations be allowed to use their facilties for eco-tourism without changing the character of the plantation.

Also, upto ten per cent of the estate area should be allowed to be used for alternate cropping.

India produces about 950 million kg of tea annually and is the largest producer of black tea in the world, accounting for 27 per cent of the world production and 22 per cent of the consumption.

A little over 4.3 million growers and 20 million farm workers derive their livelihood from ancillary activities associated with production, value addition and marketing of tea.

UNI