Special fund: Storm brewing in the tea cup

Industry observers feel the corpus is ambitious and a lot would depend on how the fund is disbursed.

The special tea fund proposed by finance minister in his Budget speech has elicited mixed reactions.

P Chidambaram said a levelised contribution will be made every year to the fund and for 2006-07, it is expected to be Rs 100 crore.

The move is in continuation of the last Budget announcement to introduce a 15-year programme for massive replantation and rejuvenation of the tea industry with the ministry of commerce proposing a special purpose tea fund. The fund primarily addresses this. The industry has mooted a Rs 4,000-crore fund for replantation for 15 years, at around Rs 267 crore a year.

Tea growers in the states like Assam, West Bengal, Tamil Nadu, Kerala and Uttaranchal will benefit from the fund, when established.

However, Karan Paul, chairman, Apeejay Tea, said, "It seems the fund is addressing small growers, but even if it includes large growers, a Rs 100 crore will have very little impact on the industry." Some industry representatives said the corpus of the tea fund is "ambitious" and a lot would depend on how the fund is disbursed.

Aditya Khaitan, vice-chairman, Indian Tea Association (ITA), and a director of McLeod Russel (India) was optimistic and said the Rs 100 crore is just the beginning and the positive aspect is that FM has at least taken cognisance of the problems facing the industry.

Dhunseri Tea Chairman C K Dhanuka said the fund would benefit the weaker sections of the industry and producers operating in low-yielding areas.