 "Kerala's plantations face a perfect storm")
Hit by the vagaries of nature and unfavourable policies, the plantation sector has urged the government to extend 200 per cent deductions of expenditure incurred on any aspect of plant protection or labourers’ welfare.
In a pre-Budget memorandum to the government, the apex body of planters in south India, the United Planters’ Association of Southern India (UPASI), made a strong pitch for overhauling the archaic Plantations Labour Act (PLA), 1951, saying such a step is imperative to save the Rs 43,000-crore sector reeling under high doses of taxation, un-remunerative returns and commodity price fluctuation.
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“Until changes are made to PLA, all expenses under this category should be given weighted deduction to the extent of 200 per cent of the expenditure. Apart from that full expenditure allowance for replanting, temporary ban on rubber imports pending disposal of safeguard duty application, exclusion of tea exports from the ambit of cess and concessional import tariff for plantation machineries,” said N Dharmaraj, president, UPASI.
South India constitutes nearly 60 per cent of India’s plantation sector, which employs 2.4 million workers directly and indirectly besides playing a significant role in supporting the rural infrastructure.
“The PLA was enacted at a time when plantations operated in extremely remote areas with no external infrastructure support. Today plantation areas are no longer rural but semi-urban. As such, the legislation has lost its relevance, is a burden on the production cost of plantations and makes Indian plantations uncompetitive internationally,” he pointed out.
UPASI drew the government’s attention to the commodity price fluctuation that hugely impacts plantation business. Currently, commodity prices are at its lowest, which make plantation producers vulnerable for price manipulation since they are at the lowest rung in the value chain.
“PLA, therefore, needs to be amended and many government schemes which are available to take care of the facilities provided under the PLA should be extended to the plantations” he said. Conceding that the recently amended bonus Act is laudable in its intention, Dharmaraj said it would severely impact the plantation business where 60 per cent of the cost is on employee remuneration.
Replanting is a regular operation in plantations to maintain the agronomic viability. Therefore, rules connecting to replanting should be amended to remove the ambiguity with regard to full expenditure allowance for replanting.
Also, subsidy for orthodox production which is an export-oriented incentive should not be included as a part of total income.
In particular, the memorandum brought into focus the domestic rubber plantation business which is 'gasping for breath under the impact of extremely un-remunerative prices'.
