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Rabindra Nath Sinha

KOLKATA, Dec. 31

THE provision for a subsidy of 25 per cent should make the crash tea factory upgradation scheme attractive to the tea companies. The Union Commerce and Industry Ministry recently approved the scheme, formulated by the Tea Board in response to the industry's demand.

The scheme has come not a day too soon in that in the prevailing highly competitive market scenario continuous effort by producers to improve the quality of tea has acquired urgency both for domestic and out market sales.

The provision for the 25 per cent subsidy is clearly intended to induce producers to launch crash factory upgradation programmes without waiting for the market to look up. As is known, in a bid to shore up the sluggish market, the industry in North India decided to halt plucking for the better part of December.

The scheme, the main objective of which is to ensure substantial improvement in the quality of manufacture of orthodox and non-reconditioned (non-RC) CTC tea, covers all tea factories, including bought leaf factories (BLFs) and those in the cooperative sector, which are registered with the Tea Board. (A BLF is one that procures at least two-thirds of its green leaf requirement from small growers, that is, growers holding not more than 10.12 hectares). The upgradation programme has to have within its purview addition, modification, renovation and replacement of machinery, such as, orthodox rollers, withering troughs, sifting machinery, drier etc and will include electrical jobs as well.

The subsidy of 25 per cent is admissible also for attendant civil works but will be subject to a ceiling of Rs 200 per sq ft for BLFs and cooperative factories and Rs.100 per sq. ft for estate tea factories.

Financial assistance to a BLF / cooperative factory will, however, be subject to subsidy ceiling of Rs 25 lakh for all items put together. The schemes formulated by them will have to be in conformity with the guidelines of the Tea Research Association for North India and UPASI Tea Research Foundation for South India.

The key conditions stipulated in the scheme are: the subsidy shall be utilised to commission such facilities as will enable the garden management to produce quality tea either through orthodox or CTC manufacture, as per the technical recommendations approved by the Tea Board ; within six months of the subsidy disbursal, the party should implement the scheme and commission the upgraded factory; The assisted factory should use / procure only good quality material -- in this case, green leaf — to ensure quality end-product ; not less than 85 per cent of the green leaf to be used should consist of two to three leaves and a bud plus single and two-leaf `banjies'; for purchases from small growers, payment for green leaf shall be at a rate not less than the 65 per cent of the average monthly price realised by the manufacturing unit; the assisted unit shall produce only non-RC teas during the CTC manufacture process and; within three months of commissioning the upgraded factory, the manufacturer has to initiate the process of obtaining ISO and HACCP (hazard analysis and critical control point) certification and ensure that certification is obtained in a year thereafter

Before sanctioning subsidy, the sanctioning authority will satisfy itself that the applicant has tied up for credit for the balance amount with a scheduled commercial bank / FI. The subsidy amount will be released in one single instalment directly to the concerned bank / FI, after the party has been sanctioned loan.

However, the subsidy will not be adjusted against the loan immediately, but will be kept in a separate account till such time the plant & machinery has been commissioned. Permission to adjust the subsidy against the loan will be given by the sanctioning authority after the factory has furnished evidence of having fulfilled the listed conditions.

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