RELIEF MEASURES FOR PLANTATION SECTOR ON THE ANVIL
Date : 23 Oct 2003
Location : New Delhi
A package of relief measures to mitigate the problems facing growers in the plantation sector-tea, coffee and natural rubber- owing to fall in the global and domestic prices is being worked out in consultation with the Reserve Bank of India (RBI), Indian Bank Association (IBA) and the Revenue Department and action in this regard will be taken and implemented in the next 15 days. This follows the decision taken to this effect at an inter-ministerial meeting between Shri Jaswant Singh, Minister of Finance and Shri Arun Jaitley, Minister of Commerce & Industry and Law & Justice here on 21st October.
The measures envisage the following:
1. The Ministry of Finance will take up the issue of reducing interest on Special Coffee Term Loan (SCTL) to 6% during moratorium period with the RBI, with the suggestion that sacrifice of such interest by the banks could be adjusted by spreading it over a period of few years by making suitable provisions in the prudential norms of the RBI.
2. The terms and conditions of the SCTL will apply mutatis mutandis to the relief package already worked out by banks for the tea industry
3. As the tea industry has a longer crop cycle ranging between 9-12 months, the ceiling limit for two crop cycles may be extended to 18 to 24 months in the case of tea as against 12 months for other agricultural crops for defining NPAs.
4. The proposal for extending price subsidy to all small growers on green tea leaf will be examined separately. Meanwhile, the Department of Commerce will take immediate steps to work out and implement a green tea leaf price formula under the relevant provisions of the Tea Act and Tea Marketing Control Order 2003.
5. With respect to the export incentive for export of orthodox tea, the Department of Commerce will examine and consider the quantum and other details for implementation within the resources available.
6. The prevailing import duty on machinery will be reduced to an all inclusive rate of 5%, for a period of 18 months from the date of issue of the notification, in order to improve productivity/quality of the product of plantation crops viz. coffee, tea and rubber. In this regard, the Ministry of Commerce will provide the details of required machinery for coffee, tea and rubber with HS codes at 8 digit level, to the Ministry of Finance.
7. As regards the problems with respect to CIT Rule 7B for coffee growers, the requirement of filing IT returns for those growers not otherwise liable to pay tax, may be dispensed with for a period of one as a test case.