Creation of a Special Purpose Tea Fund for the long- term development of the Indian tea industry through replantation and rejuvenation pruning

for Cabinet Committee Decisions | Date - 28-12-2006

The Cabinet Committee on Economic Affairs today gave its approval for:


(i)                   Setting up of the Special Purpose Tea Fund (SPTF) under the Tea Board for funding replantation and rejuvenation activities aimed at improving the age profile of tea plantations

(ii)                 Implementation of the SPTF programme till the end of 10th Plan i.e. during the remaining part of 2006-07 and in the 11th Five Year Plan with an estimated outlay of Rs.567.10 crore (subsidy of Rs.333.27 crores, spill over of subsidy of Rs.142.83 crores to the first three years of the 12th Plan and Rs.91 crore towards capital contribution) to be provided by the Government.  The continuation of the scheme in the 12th Plan would be considered after an in-depth evaluation of the experience in the 11th Plan.

(iii)                Pegging the subsidy at 25% (the present level) and adoption of a funding pattern of 25% promoter’s contribution, 25% subsidy from Government, and 50% loan from SPTF.

(iv)                Capping the capital contribution from Government to the SPTF for raising the funds required for long term lending to the tea industry at Rs.91 crore.

(v)                  Utilizing the balance funds of Rs.30 crore available in the Special Fund created with collection of Additional Excise Duty on tea for partly financing the scheme.


            The scheme is expected to result in increasing the yield, lowering the cost of production and in improvement in quality of teas leading to higher price realization.  This would in turn help to boost global competitiveness of Indian teas.  It would lead to increase in collections of tea cess, Sales Tax/VAT, Income Tax etc.  The scheme is also expected to generate additional employment at the rate of 22 million person days per year, yielding gainful employment for dependents of permanent workers residing in the tea plantations.


(Release ID :23677)

(This is an archive of the press release and has not been edited by our staff.)