CAG finds holes in Tea Board's schemes to raise output

The Comptroller and Auditor General (CAG) of India's performance audit of the “Role of the Tea Board in tea development in India” has found the Board performing poorly in implementing various schemes to improve productivity.

In a damning statement, the CAG has said that the Tea Board has failed to lay down enhancement in production of orthodox tea as a pre-requisite for eligibility of subsidy.

The Board has allowed subsidy despite non-submission of proper documents or without proper verification of factory records, the report said.

A scrutiny of Chapter 4 of the audit report is revealing. According to the CAG, the Tea Board set a meagre target of 5,000 hectares for replanting/replacement planting during the 10th Plan.

This is just 2.63 per cent of the 1.9 lakh hectares of commercially unproductive tea plantation at the beginning of the Plan period.


More interesting is the audit's finding of the Tea Board not maintaining a list of parties to whom subsidies were paid and amounts disbursed under the Tea Plantation Development Scheme.

The CAG said it could not ascertain how many gardens had availed subsidy under replanting/replacement planting.

In response to the CAG's charge, the Commerce Ministry said that since each application was processed separately for each activity, the payment made was reflected in the cash book and ledger. Hence, no separate list of parties that received subsidy was maintained.

The CAG selected a sample of 701 cases covering 309 gardens among the 2,565 cases for which replanting/replacement planting subsidy was given.

On checking the records of the 309 gardens, it found that 192 had got subsidy earlier too, and the Tea Board had not evaluated the impact of the past activities of these gardens.

The production, productivity and quality improvement of these gardens were not checked during pre-approval inspection, it said.

In the remaining gardens, the subsidy was either granted for the first time or the fact was not recorded in the application forms.

“By allowing subsidies without assessing the impact of past activities, the effectiveness of the scheme was compromised,” the audit report said.

The Commerce Ministry, responding to this, said that an assessment by AF Ferguson showed a productivity gain of between 42 and 74 per cent.

But the CAG countered it, saying AF Ferguson evaluated only 1.94 per cent of the 15,000-odd hectares covered under the scheme.


The CAG found that the Tea Board gave priority to tea bushes with high productivity (up to 3,170 kg a hectare). It also found the Tea Board having delayed inspections. In 76 per cent of the cases, the delays ranged between 31 days and 1,161 days for conducting pre-approval inspections. “Further, two or more inspections were done on the same day in many cases. Delays in conducting inspections defeated the very purpose of putting in place a detailed and purposeful monitoring mechanism,” it said.

In respect of 116 tea gardens, the Board paid subsidy on the basis of statement of provident fund dues submitted by the owners without verifying it through the challans. In 11 cases, no clearance certificate was produced by the applicants.


The audit also found the Board releasing subsidy to 12 gardens that began field activities before pre-approval inspection, thereby not finding out the physical suitability of the soil through an analysis.

Stating that the scheme prescribed minimum rehabilitation period of 18 months for plains and 12 months for hills before replanting, the report said no rehabilitation was done in 14 per cent of the cases despite the fact that there was no certificate or recommendation from the Tea Research Associations.

The dates of completion of rehabilitation were not recorded in 32 per cent of the cases, while the Tea Board gave subsidy to some gardens without ascertaining if they had made their soil suitable for plantations.

With regard to rejuvenations, of the 414 cases examined by it, the CAG found that the Tea Board had not checked the impact of rejuvenation on productivity in any of the cases.

At the Board's Coonoor office, the CAG found the beneficiaries were small growers who were not registered with the Tea Board.

“As such, the Board paid a subsidy of Rs 12 lakh to unregistered growers who were not eligible to receive subsidy,” it said.

The report also found fault with the implementation of the scheme to improve irrigation facilities and the scheme to subsidise new planting.

Source: Business line