Tea in variety is being consumed widely globally for having health nutrients and for being an instant energizer. India is one of the largest tea producers in the world. India was the top producer of tea for nearly a century, but recently China has overtaken India as the top tea producer. The industry faces a number of challenges like global competition, vagaries of nature, changing pattern in drinking due to availability of other herbal and fruit-based drinks, rising labour cost and even non-availability of labour at times.
Indian tea is the finest tea in the world. Tea grown in Darjeeling has good/great demand in Japan, Germany and other countries due to its premium quality. It is considered as the best in the world.
Indian tea industry has recorded the highest ever production as well as exports in FY18. Total tea production was 1325.05 million kg, a growth of 74.56 million kg (increase of almost 6%) year on year. Total tea exports stood at 256.57 million kg in FY18, an increase of nearly 13% over FY17. Sri Lanka and Kenya are India’s main competitors in tea exports. They export nearly their entire quantity of produce; whereas India exports only 20% of its production. However, India is the fourth largest tea exporter in the world. The industry is labour intensive. More than a million workers, mostly/majority women, are employed in the industry. After the Indian Railways, the tea industry is the largest employer.
During the plucking season, large numbers of casual workers are employed. Wages and welfare account for more than 70% of the total production cost. Labour is also becoming scarce as the younger generations are choosing to migrate to other sectors and other states.
Tea industry has its own woes. Major challenge is due to climate like uneven distribution of rainfall, heavy rainfall and extreme temperature effecting quality and production. Draughts, floods and severe attack by pests also affect the industry greatly. Plantation industry needs sympathetic support from the government. Rising costs of inputs like electricity, fuel, pesticides, agrochemicals, irrigation and labour adversely impact the economic viability of the industry. Planters cut cost by postponing the uprooting, replanting and modernisation of garden, risking long term viability.
Many countries dump the tea in the world market effecting of realisation of cost of production. Indian government has taken various steps to protect the industry. But, these are not enough. Small gardens are not viable at all. Many are getting closed.
Indian economy: The International Monetary Fund (IMF) has revised India’s growth projections downward to 7.3% for 2019 and to 7.5% for 2020. Earlier, both Asian Development Bank (ADB) and RBI had revised India’s growth projection to 7.2% from 7.4% for 2019-20. Due to various factors, the economy has slowed down, unemployment has increased and investment has been negligible. Several high frequency indicators are showing that along with a slump in industrial activity in the economy, the consumption is also slowing down. This does not augur well for the economy as this means that it will take some time for the investment cycle to revive. On top of that, global trade tensions have also affected exports and economy.
The government has managed to meet the revised fiscal deficit target of 3.4% of GDP for 2018-19, revised upward in the interim budget from the earlier target of 3.3% by undertaking a last minute cut in expenditure and by rolling over fuel subsidies to make up for the short fall in tax collection.
The Supreme Court has annulled the RBI’s February 12, 2018 circular on ‘Resolving Bad Debts’ and said the banking regulator has acted beyond its legal powers while issuing the directive. This is expected to provide some relief to the various sectors of the industry and business. However, the Supreme Court judgment does not stop the banks to initiate insolvency proceedings against debtors. The RBI’s circular seemingly was impractical and also caused for hardship for many stressed companies.
Election: The polling process for the seven-phase general election to constitute the 17th Lok Sabha has started. Bharatwasis have to elect their leaders to run the government and build a Bharat ensuring inclusive and sustainable growth. All colours of money will flow into the election. There will be colossal wastage and greatly of insoluble materials affecting the environment. Bharatwasis hope the leaders so elected will do hard work with righteousness, not engaging in populist measures and squandering the wealth of the Nation thereto and create an army of ideal people. By imposing higher taxes on a small segment of the population cannot be the way forward, rather the tax base needs to expand judiciously. The new government must ensure that there is no rift created on the basis of religion, caste - lower and upper, rich and poor, and must work their best to promote unity in diversity.
Dr. H.P. Kanoria
Editor in chief
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