Kolkata, Feb. 28
The domestic tea industry received the much-needed stamp of approval from the Finance Ministry on the proposed Special Purpose Tea Fund (SPTF) for replantation and rejuvenation of tea bushes.
Indian Tea Association (ITA) is, however, concerned with the introduction of service tax on tea auctioneering. It felt service tax would substantially increase the cost of buying. Others felt that private sales would further increase.
The initial SPTF corpus was pegged at Rs 4,000 crore, when ITA first placed its request in August 2004. Subsequently, it was reduced to around Rs 500 crore.
The Finance Minister, Mr P. Chidambaram, has committed only Rs 100 crore for SPTF in the Union Budget. Though the industry was disappointed with such a low allocation, still they appreciated the move.
Mr P.T. Siganporia, Chairman of ITA, welcomed the proposal for levelised contribution every year during the 15-year programme for replantation and rejuvenation of tea bushes.
According to him, ITA's long campaign has now materialised and the industry would now get loans at competitive rates from banks and financial institutions.
"ITA would reiterate that it is necessary to expeditiously put in place the fund and its operational parameters to enable intending borrowers to plan out and execute their developmental activities," Mr Singaporia stated.
He also welcomed the reduction in customs duty on packaging machinery from 15 per cent to 5 per cent and felt that it would boost value addition in the tea sector.