The Hindu Business Line : Re 1/kg excise duty on packet tea mooted

The impact of providing for social infrastructure and facilities translates to about Rs 3.44 per kg in South India and Rs 4.12 per kg in North India.

G. Srinivasan

New Delhi, Oct. 2 As the plantation industry is sore over the escalating cost of bearing the social burden to its employees in the face of dwindling earnings, an official Committee on tea sector has suggested imposition of additional excise duty of Re 1 per kg on packet tea for subsidising welfare schemes.

Sources in the Government told Business Line here that a report of Committee on legislation plantation sector with a view to harmonising the different provisions in different Acts under the Plantations Labour Act 1951 (PLA) had been submitted recently.

Subsidising Facilities

The Committee is of the view that for subsidising the medical, health, drinking water and education, funds might be mobilised by such an impost. The duty would be levied only on the tea that is not exported. It would yield Rs 30 crore to 35 crore a year which could be made available to the Tea Board for subsidising the facilities to the workers in tea gardens.

QUESTION OF SURVIVAL

As PLA is unique in that it requires the employer to provide the workers with medical and housing facilities, sickness and maternity benefits and other forms of social security measures, the Committee in its interactions with tea industry found that in the current price scenario, the tea industry is not going to survive for long if the burden of the social costs is not substantially slashed.

The impact of providing for social infrastructure and facilities translates to about Rs 3.44 per kg in South India and Rs 4.12 per kg in North India and the total cost both fixed and variable for providing these facilities is around Rs 300 crore per annum.

Panchayat Institutions

In an industry with a turnover of about Rs 7,800 crore, this burden is too high, it said adding that the social sector cost should be shared by the Government to the extent they could be covered under various ongoing social sector schemes of the Central/State Governments as was recommended by the Inter-Ministerial Committee earlier.

On the issue of burden sharing, the Minister of State for Commerce, Mr Jairam Ramesh, has recently written to his senior colleague Minister of Panchayati Raj, Youth Affairs & Sports, Mr Mani Shankar Aiyar, suggesting him to explore how greater integration between the Plantation Labour Act and the 73rd Amendment could be hammered out.

This is needed, he said, because the PLA had ensured that lakhs of workers in plantation areas did not get the full benefit of programmes implemented through Panchayat institutions. He said even as the workers in plantations vote in Panchayat elections, many rural development and anti-poverty programmes were not implemented in the plantation areas except in cases of acute distress like, for instance, in the closed tea gardens of North Bengal.

States to administer

While endorsing that all the social security measures provided in the PLA need to be retained and improved upon further, the Committee observed that the administration of the Act is left entirely to the State Governments despite the Act being a Central Legislation.

The Committee did not also make any change to other acts governing the tea plantation industry such as Weights and Measures Act, the Factories Act 1948, the Equal Remuneration Act 1976, the Payment of Bonus Act 1965 and the Minimum Wages Act 1948.

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