The Hindu Business Line : Rehabilitation package for tea gardens gets panel nod

The special rehabilitation package for closed tea gardens in the country, numbering 33, has been cleared by the Empowered Finance Committee after due consultations with the various Ministries including the Finance Ministry, and has already received the approval of the banks as well.

Nodal office

The Tea Board will be the nodal office for implementing the package, and if any closed garden as on April 1, 2007 (beyond the 33 identified) remains unnoticed, it could also be given the benefit of the scheme.

Talking to Business Line hereon Friday, at the sidelines of the formal SPTF (Special purpose tea fund) launch (for West Bengal tea gardens) function, the Union Minister of State, Mr Jairam Ramesh, said the ‘closure packageR 17; had four key elements, and involved a total outgo of Rs 38.65 crore.

4 key elements

These are as follows: a) Restructuring of the existing outstanding bank loans of closed tea gardens as on April 1, 2007, amounting to Rs 184.05 crore by converting these into term loans with a moratorium period of 5 years. Recovery of outstanding converted loans would begin from the sixth year onwards. Accumulated penal interest would be waived.

Banks, the Minister said, will charge a simple interest of 11 per cent per annum on the restructured loans. There will be a one-year moratorium for payment of interest. And the accmulated simple interest is to be shared equally by banks, the Central Government and the beneficiaries to the extent of one-third each, estimated at Rs 27 crore.

b) Tea Board loans to the tune of Rs 3.92 crore are to be waived. This consists of principal of Rs 2.55 crore and interest of Rs 1.37 crore.

The suggestion for waiver of damages on EPF front amounting to Rs 18.70 crore has not been agreed to by the Government, as the relevant Act does not permit this. It is, however, decided that the tea garden owners would have to bear the EPF damages imposed on them, though there will be a moratorium of five years for payment of the same.

c) Mr Ramesh said the payments have to start after five years and completed in 60 monthly instalments. Tea garde owners, however, will make regular payments of their current liability on account of the EPF.

d) The last element of the package is the extension of facility of term loans for garden improvement. It is learnt that once the accounts of the closed tea gardens are regularised in the manner stated above, the gardens will become eligible for loan and subsidy from the SPTF scheme for rejuvenation and replantation.

On sanction of working capital for closed tea gardens, and interest subsidy on the laons, he said the lending banks will be advised to extend facilities of working capital to the closed gardens after their accounts are regularised. Interest rates as prevalent will be charged by the banks.

Interest subsidy

It is also proposed to provide interest subsidy on the working capital loans at the rate of three per cent for a period of five years. It is estimated that the total amount of working capital required per year would be around Rs 51.5 crore. The financial implication on the interest subsidy as worked out will be Rs 1.54 crore and for five years will add up to Rs 7.70 crore.

Earlier, Mr Basudeb Banerjee, Chairman of Tea Board, said a remote sensing programme in collaboration with ISRO has also been taken up by the Board to closely monitor the position of the health of the gardens all over the country in terms of replanting and other parameters. He said work has started on the creation of the data base and is expectd to be completed within a year.

Taking a whirlwind tour of the closed tea gardens in Jalpaiguri, Mr Ramesh has disclosed that at least four willing parties have come forward, including Mr O.P. Agarwal, a large tea exporter based in Kolkata, to take over the closed gardens, including two of the most prominent ones such as Samsing and Chamurchi (on the Bhutan border of North Bengal).