The Assam government on Friday announced a subsidy of Rs7/kg for growers of orthodox tea in the state. Presenting the Budget for 2020-21 financial year, the state finance minister Himanta Biswa Sarma said the subsidy would bridge half the gap between Orthodox and international tea prices. Assam accounts for 51% of India’s tea production by volumes and 11.7% of the world’s. The northeast state today also joined Delhi and several others in the country in giving free electricity to its denizens.

The state government will also provide a subsidy on orthodox machinery to be given to manufacturing units of such tea commencing operations after 1 April. The twin measures are part of the state government’s efforts at diversifying tea cultivation away from CTC tea towards the production of orthodox variety.

“Our government has been working closely with the tea Industry representatives to address these issues and have understood that the long-term solution lay in re-calibrating the tea production mix in Assam from 90:10 for CTC: Orthodox to a more sustainable ratio..," Sarma said in his speech.

The state finance minister said this would have the twin effect of not just correcting the oversupply of CTC tea, leading to better price realization for growers of this tea but also increasing the Orthodox tea production in Assam to meet the increasing demand of Orthodox tea in the international market.

The state government also announced a 3% interest subvention on all term and working capital loans for Orthodox tea growers. The minister said the state government would work out the modalities for the scheme.

The Budget has set aside Rs250 crore for the year to provision for free electricity for a monthly consumption of up to 30 units. Sarma said the scheme would benefit 1.4 million families in the state.

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