Auditor raps tea board for weak financial management and declining productivity

The Comptroller and Auditor General (CAG) has highlighted a “weak financial management” by the Tea Board and underscored the declining productivity of Indian tea compared to other countries producing the processed and cured leaves.

The country’s apex audit body, in its report, said the productivity of tea declined to 1,693 kg per hectare in 2008 from 1,865 kg per hectare in 1997. The Board, which is under the Ministry of Commerce and Industry, had embarked upon a programme to enhance the country’s tea production during the period from 2002-03 to 2008-09.

On the contrary, India has the highest cost of production among the world’s tea-producing countries and where cost of sales is above the auction realisation. India’s share of the product in the international market has declined to 26 per cent in 2008 from 41 per cent in 1950. The export share has also plummeted from 48 per cent in 1950 to 12 per cent in 2008, while imports have gone up significantly to 25 million kg in 2009 from 1.37 million kg in 1992-93.

“It is indeed a matter of concern that even after more than 56 years of its existence, Tea Board has not been able to even bring all the small growers into its folds,” the report said.

Referring to “weak” financial management and internal controls, the report said that a cess, which is levied by the government, was not transferred to the Tea Fund since 2005-06 even though its rates were revised. Between 2005-2010, a total of Rs 158.80 crore was collected as cess on all tea produced in the country, out of which only Rs 70 crore was transferred to Tea Fund during 2005-06.

“The Tea Board has failed to discharge even its basic regulatory role effectively. More than 80 per cent of small growers in India continued to remain outside the ambit of regulations by the Tea Board. The system of inspection for regulating the activities of various stakeholders was weak and non-transparent,” the report said.

The CAG also pulled up the board over the issue providing a rehabilitation package for the revival of closed tea gardens. It said that the plan lacked coordination and effective implementation. As of February 2010, 12 tea gardens remained closed with a financial liability of Rs 92.51 crore. Of this, Rs 70.33 crore was towards liability of banks that affected the livelihood of 11,417 workers.