The Hindu Business Line : Revival package for 33 closed tea gardens

Official sources told Business Line here that the rehabilitation package for closed tea gardens is now engaging the attention of the Group of Ministers on plantation sector, headed by the Union Minister of Agriculture and Food, Mr Sharad Pawar. Once the GoM works on the nitty-gritty of the issue, it would be forwarded to the Cabinet Committee on Economic Affairswhich would take a final call, the sources said.

When contacted about the developments, the Minister of State for Commerce, Mr Jairam Ramesh, confirmed the move. Mr Ramesh said out of the 33 closed tea gardens, 17 were in Kerala, 14 in West Bengal and two in Assam.

The Minister said because of the depressed price situation since mid-1999 coupled with exorbitant cost of production, the viability of tea gardens was hit, resulting in closure of as many as 136 tea gardens.

However, after the price recovery from 2004, 103 tea gardens had reopened, leaving 33 tea gardens closed as on April 1, 2007.

That is why rehabilitation package with contribution from stakeholders — owners, banks and Central and concerned State Governments are engaging the attention of the Commerce Ministry, Mr Ramesh said.

Outlining the salient points of the package, the sources said the outstanding loans of the closed 33 tea gardens amount to Rs 184.05 crore. The loans might probably be converted into term loans with a moratorium period of five years.

The simple interest on bank loans would be about Rs 80.7 crore and the share of the Government would be Rs 27 crore. The package also proposes waiver of Tea Board loan of Rs 3.92 crore, including both principal loan amount and interest. The waiver of damages on Employees Provident Fund (EPF) imposed by EPFO authorities on these closed gardens costs another Rs 18.70 crore.

Term loan

Once these restructuring of loan components is in place, the sources said, these sick gardens would automatically qualify for the extension facility of term loan for garden improvements and subsidy from Tea Board under Special Purpose Tea Fund (SPTF) Scheme. Assistance under SPTF would be necessary for these gardens, as they have been closed for a long time, needing replantation and rejuvenation urgently, the sources noted.

Other crucial benefits flowing to these gardens include the extension of facility under Quality Upgradation and Product Diversification Scheme (QUPDS) and sanction of working capital at Rs 30 per kg with an interest subsidy on the loans at the rate of 3 per cent for a span of five years. The total amount of working capital is likely to be Rs 51 crore per year, while the financial implication of the interest subsidy for five years adds up to Rs 7.33 crore, the sources said.