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Note ban: In Assam's tea gardens cash is perennially in demand

By Avishek Rakshit
Last updated on: December 29, 2016 11:28 IST
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In the fifth of a six-part series on the impact of demonetisation, Avishek Rakshit senses a storm brewing over the 850-odd tea gardens in the north eastern state, which have a weekly and fortnightly payment cycle.

I: Cash crunch pain hits Dharavi's leather goods hub

II: Demonetisation silenced the looms in this 150-year-old town

III: How demonetisation stole Sivakasi's sparkle

IV: The cost of demonetisation: Jobless hundreds in Jalandhar

Assam tea garden

IMAGE: For the uninitiated, Assam's total tea-garden workforce is 11-million-strong. Photograph: Ahmad Masood/Reuters.

Like most businesses in India, Assam's 850-odd tea gardens were not spared the agony of demonetisation. It came as a rude shock, compelling the age-old tea industry in the state, amongst the largest in the country, to change overnight.

To be sure, cash is predominantly used in the tea gardens -- to pay wages, transact business, etc. The problem is even more acute because tea gardens have a weekly and fortnightly payment cycle. So, cash is perennially in demand. With the ban on high-value notes, tea gardens, both big and small, had to act swiftly; payday for some workers fell in the first week of demonetisation. Tea growers turned to the government for assistance.

Under the new arrangement, tea gardens transferred the amount to be paid as wages to the district magistrate's account. He, in turn, gave cheques to the management of the gardens, which could be encashed in banks. This way, despite a cash shortage, Assam's tea growers were able to pay over 90 per cent of workers' wages in the first week of currency purge.

The 'Assam model', as it began to be called, was replicated in other tea-growing states too such as Kerala, West Bengal and Tamil Nadu. But the task at hand was not over yet for the purveyors of this new model.

The challenge, as Arun Thekedath, chairman, Assam Tea Planters' Association, says, had only just begun. The reason for this being the Assam government's decision to open bank accounts for workers as well as install automated teller machines (ATMs) in tea gardens. That was ambitious, to say the least, more so because the government had set a deadline of December 5 to do so, he says.

While the deadline had to be extended by nine days, G Beria, director at Segunbari Tea Company in Assam, says that bank accounts for 70 per cent of the workforce in the state's tea gardens have been opened in the stipulated time (December 15).

For the uninitiated, Assam's total tea-garden workforce is 11-million-strong, nearly three times that of neighbouring West Bengal's. But, as Thekedath cautions: "Opening an account is one thing; activating it is another."

Some of the estate owners endorsed this view saying while the government's effort in improving banking channels was laudable, many of the bank accounts opened had not been activated yet. Gardens in Assam where ATMs have been installed so far or ones that have easy access to them have been pegged at around 4 to 5 per cent only. Industry estimates suggest the number of gardens located in remote areas, which cannot be easily serviced by banks and ATMs, at nearly 60 per cent or 470-500 of the 850 gardens. 

There are further concerns. Almost 50 per cent of the workforce is illiterate, threatening to derail the Centre's plan to go cashless. As Assam's tea gardens sit on the edge, a storm could be brewing.

Next: Demonetisation has driven Solapur's beedi workers to loan sharks

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