South plantations to gain

BUDGET IMPACT

Customs duty cut from 4% to 3% will help boost domestic coffee.

Kerala, Tamil Nadu and Karnataka will be the biggest beneficiaries of the package announced in the Budget for re-planting and re-juvenating of estates.

The plantation sector is also to gain from the reduction in customs duty from 7.5 per cent to 5 per cent on drip irrigation systems, agricultural sprinklers and food processing machinery.

Finance Minister in his speech said, "The government will soon put in place similar financial mechanisms for coffee, rubber, spices, cashew and coconut."

The Centre had instituted a Special Purpose Tea Fund for re-plantation and rejuvenation of tea gardens in the previous budget. Following its success, it has announced a similar package for other plantation crops.

"The reduction in central sales tax (CST) from 4 per cent to 3 per cent will allows us to take up domestic coffee promotion. We are also delighted by the customs duty reduction on drip irrigation systems and agricultural sprinklers," Jeffrey Rebello, chairman, Karnataka Planters Association (KPA).

Chairman of United Planters' Association of Southern India (Upasi) J K Thomas said, "No amount has been earmarked. This is disappointing, for we do not know how much we will get for coffee, rubber, spices, cashew and coconut."

According to a Coffee Board official, a 'Special Purpose Coffee Fund' is being worked out with the help of the report prepared by SBI Caps on replantation and rejuvenation of coffee estates. There are plans to involve coffee growers and companies in the exercise. The southern states together make up 80-90 per cent of the plantation crops (coffee, rubber, spices, cashew) in the country.

According to statistics maintained by Upasi, coffee is grown on 3.79 lakh hectares in the country with the south's share being 3.37 lakh hectares. The country's spices come wholly from the south and they are grown on 73,320 acres.

Rubber plantations are spread over 5.73 lakh hectares of which 5.17 lakh hectares are in the south. This is seen as a welcome move as the sector is plagued by issues like low productivity.

'Beneficial for long-term growth'

WeP Peripherals has welcomed the Budget terming it beneficial in the long term growth of the economy.

"Finance Minister P Chidambaram has done a commendable job in the current difficult situation where economy is heating up. Some of the measures in taxation area are appropriate and have a long-term advantage to the economy," WeP Peripherals Ltd MD & CEO Ram N Agarwal said in statement.

He said the Budget was aimed at giving weightage to continuity and stability of policies, which is good for investment.