Almost half of India's tea plantations, spread over nearly 2 lakh hectares, may soon get a fresh spark of revival.
KOLKATA: Almost half of India's tea plantations, spread over nearly 2 lakh hectares, may soon get a fresh spark of revival. The proposed tea fund of Rs 4,700 crore for rejuvenating India's old yet promising tea estates has been cleared by the Planning Commission. The Tea Board is also in talks with National Remote Sensing Agency to spearhead its plan to adapt satellite remote sensing to map its old tea bushes.
Christened as the Special Purpose Tea Fund (SPTF), the total amount approved by the commission has been calculated at current prices. The total outlay will be spread out over a period of 15 years and will be managed by the Tea Board. While the government is likely to provide 30% of this fund, 50% of the amount will be available through borrowings from commercial banks. The owners of the tea estates have to chip in the remaining 20%.
Basudeb Banerjee, chairman, Tea Board told DNA Money, "The Planning Commission at its recent meeting has cleared the scheme and currently, we are awaiting the go-ahead of the Expenditure Finance Committee. The government is agreeing to a 30% subsidy, instead of 40% as proposed by the industry."
According to the modalities of the scheme, banks would lend to the Board, which in turn will onlend to the borrower. "Unlike in the case where the companies borrow from the banks, this system will ensure complete repayment as the final proceeds will ultimately go to an escrow account," the chairman said.
Most banks including State Bank of India, United Bank of India, Punjab National Bank, Uco Bank and others have evinced interest in funding the industry through the SPTF.
The total fund has been calculated on the basis of the per hectare cost of re-plantation, at present prices. The per-hectare cost is, however, different for Darjeeling and Nilgiri teas. Officials said that the per-hectare cost is likely to be more after 10 years' time.
It is estimated that over 40% of the tea bushes in India are over 50 years of age. This has had its effects on the cost of production of tea, which apparently is one of the highest in the world. This has been one of the main reasons for India becoming less competitive against Kenyan or Sri Lanka tea plantations, which are much younger in age.
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