Orthodox tea subsidy big boost to tea sector

Guwahati: Though the Centre has been talking about promoting digital payments and has been successful too, the situation in the tea industry is the opposite, with workers still receiving wages in cash.

Chairperson of the Indian Tea Association Nayantara Palchoudhuri said at the 132nd annual general meeting of the Assam Branch Indian Tea Association in Jorhat that its interactions with the Union Finance Minister in April 2021 and her directions to the banking sector have fructified into some positive results on the ground level with the number of ATMs having been installed in Assam.

“I must, however, add that tea gardens require more ATMs and Customer Service Points, the detailed mapping of which was done by the Association for tea growing regions in Assam, WB and Tripura and submitted to the ministry. The sooner we migrate completely to digital cashless payments, the better it would be for both the workforce and the management,” she said. 

Chairman of Assam Branch Indian Tea Association Sailendra Goswami said in the meeting that the digital payment of workers’ wages requires sufficient bank branches and the installation of an adequate number of ATMs in the areas where tea gardens are located, which is lacking at present.

“Though the installation of ATMs in the tea estates has started for which we are thankful to the Finance Minister, Government of India and the Government of Assam for their initiative, however, the process needs to be sustained for full conversion to digital wage payments as well as to enable direct transfer of incentives to the beneficiaries bank accounts,” he said.

The tea plantation sector of North India comprising tea growing states of Assam, West Bengal and Tripura comprises 1250 gardens employing 10.80 lakh workers. It has been a long-standing practice in the tea industry to pay workers’ wages in cash on a weekly/fortnightly basis.

The ITA in its representation to the Chief Economic Advisor, V Anantha Nageswaran, said post demonetisation, although bank accounts of several tea garden workers were opened, in the absence of adequate banking access, payment through bank accounts could not be operationalised. “Banks were located far away from tea estates requiring account holders to travel long distances during working days thereby absenting themselves from work. Further, even in cases where banks were situated within walking distance of tea estates, the banking infrastructure is grossly inadequate to deal with several accounts. In such a scenario, wages of a large section of workers need to be paid in cash,” the ITA representation said.

Post introduction of Section 194N of the Income Tax Act, tea companies had to bear significant expenditure by way of TDS on cash withdrawals given wages and in-kind benefits being paid in cash to the majority of garden workers. The matter was taken up with the Union Finance Minister at a stakeholders meeting in Kolkata in 2021 and the minister agreed to expedite the installation of ATMs in tea gardens and advised stakeholders to provide the requirement for ATMs. The ITA in 2021 had estimated that the number of ATMS required for ITA member gardens is 497.

After the Union Minister’s intervention, the industry had several interactions with SBI, UBI and UCO Regional Heads in Kolkata for enabling the transition to digital wage payments, things have not progressed to the extent desired and the gardens are still constrained by inadequate banking infrastructure and poor network connectivity.

It is submitted that although presently the issue of application of 194N on the tea sector is subjudice, however, the seamless flow of benefits of government schemes under DBT such as health and others to the tea garden population is being constrained in the absence of bank accounts of a large section of tea garden workers.

“The industry has been engaging with the concerned authorities for a considerable period but the issue remains unresolved to date,” the ITA said requesting the finance ministry to take up the matter with the banking authorities to ensure that the process of opening bank accounts of tea garden workers and installation of new ATMs in tea gardens is expedited.

“We understand that the policy on the opening of bank branches formulated by RBI emphasises the need to open more banks in hilly and North East areas,” the ITA said.

“Asking a worker to go to a bank to collect his payment would be losing man hours and it is best to provide his payment through cash only. It is very risky during payment of bonuses when huge payments have to be disbursed in cash” a tea planter said, adding that the workers are interested to take wages in cash only.

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