"We will set up the necessary infrastructure in a month's time.
We hope to start disbursement from the end of January, 2007," Tea Board chairman Basudeb Banerjee said here today.
The SPTF was approved by the Union Cabinet on Thursday. The fund would take care of the long-term credit requirements for the Commerce Ministry's replantation and rejuvenation programme for tea plantations which is estimated at a cost of whopping Rs 4,761 crore over the next 15 years, Mr Banerjee told UNI, The fund would be headed by a CEO and managed like a corporate entity. Minister of State for Commerce Jairam Ramesh had said that he had proposed that a competent CEO should be appointed to administer the fund like a corporate entity.
The Tea Board would manage the fund while the CEO can do it from outside, Mr Banerjee added.
''The scheme would involve replanting and rejuvenating over two lakh hectares of plantation in the next 15 years, would call for growers to come up with 25 per cent of the required funds while the government would provide 25 per cent funds as subsidies. Rest of the fund would be provided by the SPTF through long-term loans,'' the Tea Board Chairman said.
Mr Banerjee said the SPTF was an "extremely important step" to make Indian tea globally competitive. He pointed out that more than 50 per cent of tea bushes in India were over 40-year-old, which reduced their productivity.
''That is why we are finding it difficult to fight competition from Sri Lanka, Kenya and Vietnam,'' he said.
Of the total required investment of Rs 4,761 crore, 46 per cent would be spent in Asom, 28 per cent in West Bengal while 22 per cent would go to tea plantations in Tamil Nadu and Kerala.
''This allocation has been determined based on the total number and age of the bushes. The bushes which are more than 50-year-old will be uprooted,'' Mr Banerjee said.
The fund would help plantation owners to have access to long-term funding. Banks were unwilling to provide term loans beyond 7-10 years at a uniform rate of interest to tea growers whereas the minimum length of the loan period for replantation should be about 13 years with a five-year moratorium on repayment of principal.
The loans would be repayable in eight equal instalments starting from the sixth year of sanction with a moratorium of five years on the repayment of principal.