CAG slams lax Board for Indian tea's poor show

The Comptroller and Auditor General (CAG) of India has found the Tea Board ineffective in exercising its role as regulator of the commodity in the country.

“This has had an adverse impact on the effectiveness of its functioning in other areas of development such as research, marketing and promotion of tea in India,” the CAG said in its performance audit of “Role of Tea Board in tea development in India”. The audit was done for the 2008-09 fiscal.

Regretting that 80 per cent of small growers in the country continued to be outside the ambit of the Tea Board's regulation, it said the Board's system of inspecting for regulating activities of stake holders was weak and non-transparent.

Ageing plantation is one of the main reasons for declining productivity and the total area under commercially unproductive bushes has increased substantially, it said.

Programmes for replantation, rejuvenation and pruning were necessary but the targets set for these are low. At current rates, it would take 149 years to wipe off the backlog for replanting and replacement-planting up to 2008, the CAG said.

Below targets

Expressing concern over low prices realised by Indian teas compared with other competitors, the CAG said it was primarily due to its inferior quality and adverse product mix. “Production of orthodox tea has not increased and actual production of orthodox tea has fallen substantially below the targets set,” it said.

The Tea Board has failed to lay down enhancement in orthodox-tea production as a pre-requisite for eligibility for subsidy, it said.

The audit found that the Board had neither fixed any target in any of its subsidy schemes nor laid down any mechanism to measure impact of such schemes. “There are deficiencies in implementation of various other activities aimed at increasing productivity,” it said.

Costly methods

The cost of producing tea was the highest in the country compared with other nations and the cost of sales were often higher than realisations at the auctions. Yet, the Tea Board did not prescribe regular cost studies to identify components that would help cut costs.

Research activities were not fruitful and it could be attributed to inadequate monitoring and shortage of manpower and resources. The CAG also slammed the Board for not working in consonance with the industry in implementing the e-commerce initiative of the IT portal project as well as securing financial commitment for operating the portal.

Govt at fault too

The audit also found fault with the Government for providing inadequate budgetary support for effective discharge of functions of the Board such as market diversification.

It also said that generation of resources as cess on all teas produced was inadequate. “The ceiling of cess at rate not exceeding 50 paise a kg was fixed way back in 1986. Internal generation of funds was also not adequate,” the audit report said.

In conclusion, the CAG said that the Tea Board should carry out major structural and strategic changes in its policies and plans to perform its regulatory functions more efficiently and effectively.

The Government should also review the entire functioning of the Board and take a holistic view of its existence and role in the future. The Government could redesign its programmes, schemes and delivery mechanisms, and allocate higher financial outlays to address the problems plaguing the tea industry, as well, it said.

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