Assam Tea Industries Special Incentives Scheme

March 18, 2023

Assam, known for its premium tea production, is one of the leading tea producing states in India. However, the tea industry in Assam has been struggling with a long-drawn financial crisis, which has affected the tea workers’ livelihoods. To provide relief to the tea industry, the Assam government has launched the Assam Tea Industries Special Incentives Scheme (ATISIS). This scheme provides financial backing required for the production of orthodox tea or speciality tea, which are mainly for the export purposes and requires high cost of production. During the budget, the state government allocated Rs 100 crore for this scheme.

Components of ATISIS

ATISIS has four main components, which are as follows:

Interest Subvention on Working Capital: This component of ATISIS provides financial backing required for reducing the cost of production of orthodox or specialty tea.

Production Subsidy: The government is currently under the process of increasing the production subsidy for orthodox and specialty tea from Rs 7 to Rs 10 per kg. For the current year of 2023-24 only, an enhanced production subsidy of Rs 12 per kg will be extended to celebrate 200 years of Assam tea.

Fixed Capital Subsidy: This component of ATISIS provides financial assistance for capital expenditure, such as the purchase of machinery, equipment, and other assets required for tea production.

Agricultural Income Tax Holiday: This component provides an exemption from agricultural income tax for a specified period to tea producers and tea gardens.

Assam Government’s Assistance For Tea Industry

The Assam government has earmarked nearly Rs 550 crore for the state’s tea industry, a welcome move for the industry. The government has also announced that the ATISIS will be strengthened to bring relief to tea workers.

To promote Assam Tea as a brand, road shows will be organized across the country. The government has also emphasized the development of infrastructure in tea garden labor lines, especially the development of roads. As a special relief, all the arrear electricity dues of tea garden worker families living in the lines will be waived off as a one-time measure by the government. Additionally, 10,000 houses will be constructed in the labor lines.

The Tea Association of India (TAI) has welcomed the Assam budget and lauded the extension of the Assam Agri income tax exemption and the incentives declared under the ATISIS.

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