CCEA okays fund to breathe life into tea plantations

NEW DELHI: The Cabinet Committee on Economic Affairs (CCEA) on Thursday gave the go-ahead to set up a Special Purpose Tea Fund (SPTF) under the Tea Board to fund replantation and rejuvenation activities aimed at improving the age profile of tea plantations.

The CCEA also gave its approval for providing budgetary support towards outstanding statutory dues, salary/wages in respect of defaulting CPSEs under the department of heavy industry. The move is expected to “motivate” employees for better output and prepare them to achieve the goal of revival of companies.

The SPTF move is aimed at raising global competitiveness of the tea industry by improving the quality of teas and leading to higher price realisation. The setting up of SPTF, the green signal for which came during Budget 2006, will lead to increased tea cess, sales tax, VAT, income tax, etc., besides generating employment to 22 million persons.

Although the full size of SPTF was not spelt out in the statement released here after the CCEA meeting, finance minister P Chidambaram had said in the Budget speech that a sum of Rs 100 crore would be set aside for 2006-07 for SPTF, which would work as a 15-year old programme by the ministry of commerce. At the time, the FM had asserted that he would make a “levelised contribution” every year while the details are being worked out.

In June, the commerce ministry took up the matter relating to SPTF for uprooting-replanting and rejuvenation pruning with a view to put a blueprint in place “expeditiously” by the time the winter dormancy period began in North-east. Trade Unions and state governments were taken on board for the operationalising of the fund. It was agreed that the blueprint would be put in place by June 30. When established, the fund will benefit planters in tea growing states, including Assam, West Bengal, Tamil Nadu, Kerala and Uttaranchal.

In November, the government announced a major initiative towards clearing dues to public sector employees as part of a restructuring exercise. Based on NCMP, the government decided to sanction an amount of Rs 517 crore as the first tranche of money required for restructuring of 24 ailing public sector enterprises (PSEs) under the department of heavy industries.

In a decision with far-reaching implications, the sum, which was to be released immediately in the financial year, was also aimed at defraying the long-outstanding and legitimate statutory dues such as provident fund, gratuity, pension, Employees State Insurance and bonus and salaries and wages of over 45,000 employees of the loss-making PSEs.

Of the 48 enterprises under the department of heavy industries, 37 are operational, 28 are loss-making and 24 of which are unable to regularly pay the salary and wages and related statutory dues. These loss-making PSEs have been facing severe difficulties due to large overheads, low technological profile, obsolete plants, dwindling working capital availability and swift changes in product/processes ushered in by a fast globalising economy.

The infusion of fresh funds, it was felt, would enliven the demoralised workforce of these public sector enterprises and help unlock the productive potential of the PSEs. Additionally, the funds would also unlock the working capital, including banking facilities which in several cases were frozen due to continued default in payment of statutory dues severely crippling their operations. CPSEs, especially loss-making ones, went through sustained scrutiny to explore the possibility of a turnaround.

More than 40,000 workers of a large number of CPSEs were covered under the CRR (counselling, retraining and redeployment) Scheme during the last few years. The decision taken by the government on the package, it was assessed, would result in liquidation of outstanding statutory dues and salary and wages to nearly 45,000 employees of these PSEs and would be followed up by subsequent organisational, financial and operational restructuring. Irrespective of the final view that is taken with regard to the future of these PSEs, the government gave priority to clearance of legitimate dues to the employees of the CPSEs.