 "A tea garden worker plucks tea leaves")
The meeting between West Bengal Chief Minister Mamata Banerjee and Reserve Bank of India (RBI) governor Urjit Patel, during his maiden visit to the state on December 15, seems to have resulted in some respite for the tea industry, reeling under the pressure of demonetisation.
Following a video conferencing between state’s Principal Finance Secretary H K Dwivedi and the RBI’s regional director Rekha Warrior, after the Banerjee-Patel meeting, a solution has been worked out where the payment of wages to the tea workers in the state will continue through cash as well as bank transfers till January 31, 2017.
“The chief minister has been actively raising the issue of agony of the tea garden workers and had a discussion on this with the RBI governor. He in turn said that RBI will look into this issue”, Partha Chatterjee, the state’s parliamentary affairs minister told Business Standard.
Under the decisions concluded, in areas where financing or local banks are able to provide funds to the tea estate, the existing system of payment of through banks will continue. However, for gardens which do not have access to banks, the district magistrate will get the funds (for the wages) routed through his bank account.
Banerjee had strongly criticised RBI and the Centre, alleging that West Bengal was discriminated against, as RBI was routing the necessary cash to the tea gardens in Assam while the tea garden workers in north-west Bengal went hungry.
While sharing this concern on Twitter, Banerjee also wrote to Patel and discussed the problem of the cash starved tea gardens at length during the one hour meeting.
During Patel’s visit to Kolkata to attend an RBI meeting on December 15, Trinamool Congress’ workers showed black flags to the governor and shouted slogans criticising Modi and Patel.
While the decision following the meeting between Dwivedi and Warrior has compromised on January 31 next year as the date till when the dual mode of payment will continue, extension date to open the bank account for the tea garden workers has been set till March 31, 2017.
The industry, so long, was uncertain on how to pay the workers on December 31 this year (next payday) as an estimated 50 per cent of the 4,00,000 odd workers in north Bengal’s tea gardens don’t have a bank account where the wage could be credited.
Earlier, it was mandated that the entire wage payment to the tea garden workers was to shift over to bank account transfers December 15 onwards as the Centre vied to promote digitisation.
Post demonetisation, when the entire tea industry across India plunged into chaos, West Bengal has been the hardest hit. Not only did four gardens closed down due to poor currency availability, the wages for most of the workers got delayed by over 2-4 weeks.
It has been further agreed that the banks operational in the tea estates’ vicinity will set up ATM services or open branches or appoint business correspondents in all tea gardens by March 31 next year. Business correspondents will carry cash with them to the gardens where ATMs could not be installed so that workers can withdraw the equivalent cash as per their wage.
Industry officials said that banks in the area are reluctant to open bank accounts for the workers despite the Centre’s mandate as they felt the accounts opened in remote areas could not be serviced. Around 60 per cent of the 450-odd tea gardens in the Dooars region are located in remote areas.
“This directive has come in as a respite for us for the time being but opening of the bank accounts is a priority”, S. S. Bagaria, chairman of the Darjeeling Tea Association said.
Also, the banks are now required to make available the actual cash requirement for the gardens in the area irrespective of a formula worked out earlier.
A communication sent from Dwivedi’s office to Warrior states, “RBI on receipt of the assessment of the total wage (both arrears and current) to be paid garden-wise, will arrange for necessary currency in the respective lead financing bank of the tea garden”.
Earlier, the RBI had mandated a maximum withdrawal of currency for each gardens based on the formula - 2.5 X (garden area) X Rs. 1,400 - which was quite unpopular among the tea garden owners as the amount was not feasible to pay the entire workforce.
Nevertheless, the risk and uncertainty over the actual availability of currency notes prevail in the area.
“Currency is short here and thus we don’t know what lies ahead despite these directives”, Bijoy Gopal Chakraborty, president of Confederation of Indian Small Tea Grower's Association said.
While West Bengal, which produces 324.50 million kg on tea annually, has been able to contain the immediate crisis looming this month, uncertainty over the next payment cycle prevails in Assam, the largest tea producer, where bank accounts for atleast 30 per cent of the 11,00,000 strong workforce is yet to be opened.
Tea estate owners from Assam complained that post December 15, when payment of wages only through bank transfers has begun, there hasn’t been any communication from either the state government or RBI over how to pay the wages.
“This week, we are routing it through the district magistrate as per the earlier model. However, we don’t know how to pay the wages next week as there hasn’t been any official communication and accounts for a large number of workers is yet to be opened”, a tea company owner from Assam said.
A similar situation of ambiguity prevails in the gardens of south India as well but the condition there is the least severe.
