Demonetisation decision puts Assam tea industry in trouble as labour wage payments affected

With banks rationing cash withdrawals, garden managements are facing trouble in arranging cash to pay wages to tea gardens labourers, which is paid fortnightly or weekly

The government’s demonetisation decision has put the Assam tea industry in trouble. The tea gardens in the state pay wages weekly or fortnightly to its labourers in cash but with Rs 500 and Rs 1,000 currency notes being scrapped and banks rationing withdrawals, gardens are finding it difficult to arrange cash for paying wages this weekend. Though the state government and the Reserve Bank of India (RBI) have stepped in to ease the trouble, things are yet to get resolved. 

Tea associations had yesterday raised an alarm over the cash fiasco and had written to the Reserve Bank of India (RBI), the Prime Minister and the state government. A tea industry source said even a medium-sized garden requires around Rs 20 lakh for the weekly payment. “The restrictions imposed on withdrawal, even if temporary, have made it difficult for us to arrange cash,” the source said. 

Assam has around 10 lakh tea garden labourers and the weekly wage bill amounts to around Rs 90 crore.  

The state government had yesterday sought details from the tea industry associations, such as the number of gardens that would be affected, the amount of cash they need to pay wages and etc. 

“Today, as asked by the state government, we provided them with all the details of gardens and the cash required. But still there is still lack of clarity on how and when the issue will get resolved,” said Bidyananda Barkakoty, vice chairman of Tea Board of India to Business Standard. 

Barkakoty said the State Bank of India had informed the tea industry that the RBI had permitted release of cash required for wage payment to all tea gardens through a new bank account to be opened by the gardens.  

In the evening, the office of the assistant labour commissioner of the state government, issued a letter to the managers of the tea estates asking them to open a ‘general ledger account’ where the fund from the “original account can be transferred based on the wage requirements and then can be withdrawn in cash without any limitation”. 

Earlier in the day, Assam chief minister Sarbananda Sonowal also directed deputy commissioners of districts and other authorities to look into the matter and asked officials to supply food items and other essential services to the tea garden labourers.

Fearing labour unrest due to non-disbursement of the daily wage on time, many tea garden managements have asked the respective district administrations to provide additional security.

However, Barkakoty is of the view that things would get resolved in next few days as both government and RBI have understood the gravity of the matter and are acting promptly to address it. 

He also said that garden managements were working to sensitise tea garden labourers as far as possible in their act of preparedness in case things do not get resolved by tomorrow and wage payments are affected. 

Vegetable vendors in the city too continued to be hit by the government’s decision to demonetise the old high denomination notes. Markets were dull for the third consecutive day today as customers were not paying in small notes, complained many vegetable vendors in the city. 

Shortage of low denomination notes was reported from various parts of the state. There were also reports of black marketing of Rs 100 notes in some city areas.

In the first few days, there would be a limit of 10,000 rupees per day and 20,000 rupees per week for withdrawal from banks. This limit would go up in the coming days. There would be a limit of Rs 2,000 per day per card on withdrawal through ATMs. This would be raised to Rs 4,000 later.