The tea industry needs to stop looking for the subsidy to give incentives to planters, said Arun Kumar Ray, Deputy Chairman, Tea Board of India.
The deputy chairman stated that subsidy should be given only on incremental production to incentivize planters and to increase orthodox production, and not for CTC.
As per a report, the Indian tea industry has been asking for incremental incentives to planters to move from CTC to orthodox. While orthodox tea accounts for nearly 40 percent of the total demand in the international market, with CTC accounting for another 40 percent and the remaining 20 percent demand is for green tea.
While speaking at the 55th annual general meeting of Tea Research Association (TRA) here on Thursday, Ray said, “Excess dependence on subsidies would impact quality and thereby returns” .
While Indian Tea Industry has had a very struggling past to cope up with the loss and value chain, the Tea Board is itself in for restructuring by way of right-sizing manpower, closing some offices and merging certain functions. Moreover, manpower would be brought down to 250 from 312 where at least six offices will be closed. The department of law and computer would also be outsourced.
Financial sustainability Planning
“The association has been facing fund shortage for some years, but now it is coming up with a detailed financial sustainability plan that would make it self-sufficient at the end of the next five years”, said PK Bezboruah, Chairman of TRA.
“Through these verticals, we are looking at a detailed plan to generate annual revenues of ₹15 crores in five years. But, continued assistance from the Commerce Ministry for this and the next medium-term framework are essential to enable us to successfully implement the plan,” he said.
TRA has been funded partly by the government and partly by tea companies. The allocation of funds by the Department of Commerce to the R&D budget of Tea Board has seen a cut, from an average of ₹25 crores annually to about ₹9 crores.
