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for more than three months withoutany investigations. However, thetakeover is not nationalisation. It ismeant to find new owners for theestates. In fact, the governmentwould appeal to the owners of theestates to reopen them before thetakeover.The Tea Board has launched awar against colouring of teas. TheFood Adulteration Act (FAA) allows24 natural flavours like cardamom,ginger, tulsi and mint to be mixedwith tea, but does not allow anycolours. In fact, some colours addedto tea could prove to be a healthhazard, leading to cancer, liver damageand kidney failure in the longrun as they have lead content.A Prices Stabilisation FundScheme, with a corpus of Rs 5000million was introduced from April 1,2003 by the Ministry of Commerceand Industry. It is meant to providesome relief to small growers as andwhen prices dip below the normalaverage.The government had approvedthe setting up of a Special PurposeTea Fund (SPTF) under the TeaBoard for funding replantation andrejuvenation activities aimed at improvingthe age profile of tea plantations.Also, budgetary support wouldbe extended towards outstandingstatutory dues, salary/wages in respectof defaulting companies. TheTea Production andExports(million kg)Year Production Exports1997-98 835.6 211.31998-99 855.2 205.91999-2000 836.8 188.92000-01 848.4 203.62001-02 847.4 190.02002-03 846.0 184.42003-04 850.5 183.12004-05 830.7 205.82005-06 930.9 181.12006 956.0 203.86SPTF move ismeant to improvethe globalcompetitivenessof the tea industry.It will alsolead to increasedtea cess, salestax, VAT, incometax, etc.The governmentdeclared that asum of Rs 1000million would beset aside for2006-07 for the SPTF which wouldwork as a 15-year programme underthe Ministry of Commerce.The excise duty payable by theproducers at Rs 2 a kg was withdrawnin the Finance Bill 2002-03,and in its place an additional exciseduty at Re 1 a kg was levied forcreating a special fund for financingdevelopment of the tea industry. Thisadditional duty was also withdrawnin the 2005-06 budget. Out of theadditional excise collected during2002-04, a sum of Rs 930 million wasallocated for two schemes by the TeaBoard—promotion of orthodox teaproduction and assistance to two tearesearch institutes managed by theindustry.Also, the import duty on items ofmachinery used to improve productivityand quality of tea, includingvalue addition has been reduced toan all inclusive rate of 5 per cent. Anew Tea (Distribution and Export)Control Order, 2005 was notified onApril 1, 2005 for standardisation ofquality norms for tea imported forre-export. Certification of origin andvalue addition have also been addressedby the new order.A special scheme was launchedduring 2005 for promotion of orthodoxtea production. A sum of Rs 650million has been allocated for thisscheme.The Commerce Ministry hasurged the tea industry to gear itselfup for a gradual reduction in importduties, as these cannot remain highfor long.Market SurveyThe planters have been demandinghigher subsidy for replantation.They are not satisfied with the 25per cent subsidy announced by theUnion Commerce Ministry for therejuvenation of tea gardens andare asking for a 40 per cent subsidy.Replanting in old tea areas isexpected to reduce the surplus inthe short run and make the industrymore competitive, and also increasethe workers’ earnings. Currently,the industry is burdenedwith low price realisation and risingcosts.In October 2007, the O.P. AryaCommittee made some importantrecommendations. These include,allowing 10 per cent area for alternativecropping, imposing additionalexcise duty of Re 1 per kg on packedtea to subsidise welfare activities,and addition of nature-identicalflavours to tea. The committeepleaded for uniformity in the implementationof Plantations Labour Act,1951. It was of the opinion that thecurrent wage structure could continuebut the minimum wage shouldnot be less than the minimum wagefixed from time to time.The tea industry has to curtailunbridled expansion of area undercultivation, focus on productivity toenhance returns from black tea production,reduce the unit coststhrough productivity gains, enhancecapacity of small growers, streamlinemarket channels and improveinfrastructure.

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