KOLKATA, India
India’s Comptroller and Auditor General (CAG) on Tuesday broadly criticized the Tea Board of India for failing to meet its objectives and recommended a long-term strategic plan to market India's tea.
Overseas offices and promotional activities have not yielded effective results and exports remain stagnant, according to the report.
Elements of the plan include reducing production expenses, increasing training and stepped up regulation of adulterated tea. The introduction of an India tea logo; a system to rate exporters and diversification of the market portfolio were not fully implemented, according to the audit report: "The Tea Board neither fixed any target/outcome in any scheme nor laid down any mechanism to measure impact of such schemes."
“This has had an adverse impact on the effectiveness of its functioning in other areas of development such as research, marketing and promotion of tea in India,” the CAG said in its performance audit of “Role of Tea Board in tea development in India”. The audit was done for the 2008-09 fiscal year.
India’s share of world tea exports has declined from 15.17% in 1993 to 11.15% in 2010. Last year India exported 193 million kg, significantly below the 203 million kg goal last reached in 2008. India is the world’s fourth largest tea exporter behind China which is gaining share. In 2010 Kenya exported 25% of the world’s tea and Sri Lanka 20%. In 1950 India exported half the world’s tea.
Auditors stated that replanting the country’s aging tea bushes, rejuvenating soil and pruning are important projects but targets are low. The total area of commercially unproductive bushes has increased substantially. At current rates, it would take 149 years to wipe off the backlog for replanting and replacement-planting up to 2008, the CAG said.
Auditors wrote that "we are of the view that Tea Board is not fully equipped to effectively deal with this critical situation threatening the industry."
Auditors said that the board has no mechanism to exercise its regulatory function in preventing the manufacturing, buying, distribution and export of adulterated tea.
Auditors also found fault with the Government for failing to provide adequate budgetary support for effective discharge of functions of the Board such as market diversification.
The tax on teas is inadequate. “The ceiling of cess at rate not exceeding 50 paise a kg (1 cent) was fixed way back in 1986. Internal generation of funds was also not adequate,” the audit report said.
Referring to “weak” financial management and internal controls, the report said that fees levied by the government have not been transferred to the Tea Fund since 2005-06 even though its rates were revised. During the five years beginning in 2005 a total of Rs 158.80 crore ($35 million) was collected as on all tea produced in the country, out of which only Rs 70 crore ($15.2 million) was transferred to Tea Fund.
“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 fold,” the report said. “More than 80% of small growers in India remain outside the ambit of regulations by the Tea Board. The system of inspection for regulating the activities of various stakeholders is weak and non-transparent,” the report said.
Sources: Hindu Business Line, Business Standard
http://www.thehindubusinessline.com/industry-and-economy/agri-biz/article2389547.ece?homepage=true
http://www.business-standard.com/india/news/auditor-raps-tea-board-for-weak-financial-managementdeclining-productivity/446839/