New Delhi: The Centre’s move to demonetise high-value notes has created havoc in the tea industry. The weekly wages paid to labourers have more or less stopped since the announcement, particularly in states like West Bengal, Tamil Nadu, Kerala and Karnataka. In the coming weeks, the situation may get worse. The Centre has asked banks in the tea-growing states to open accounts for all labourers by December 5, so that the garden administration can transfer salaries online from December 10 onwards. Both the garden workers’ union and the owners feel that the deadline in too close, given the number of labourers.
The ‘Assam model’
Following the November 8 decision, the Centre was quick to address the issue in Assam, which has the country’s largest number of registered tea gardens (780). The government set in motion a temporary mechanism to tide through the initial weeks, asking owners to transfer the funds meant for wage disbursement to the official bank account of the local district magistrate or district commissioner, who would then withdraw the sum on their behalf.
Now being called the ‘Assam model’, the provisional mechanism was thereafter adopted by tea-growing states like Kerala and West Bengal. However, it has failed to deliver the intended result as banks don’t have sufficient cash in new notes and small denominations.
The office of the district magistrate (DM) in West Bengal’s Darjeeling district told The Wire on Friday, “Though the tea garden owners have transferred the amount meant for the wages of their labourers as asked, we have put them in a queue as the banks don’t have enough cash to give them.”
The Darjeeling district has 68 tea gardens, out of which 38 have been able to pay only a week’s wages to their workers since November 8.
“We are in a fix. How do you explain to labourers that the banks suddenly don’t have enough cash to pay their wages, even after the garden owners have transferred the money for it to the bank? It has been three weeks now, how do you demand work from them when you have not paid them for the work done? The industry in Bengal is anyway reeling under difficult circumstances and with this move, it will certainly affect production in coming times,” said Sonia Jabbar, owner of the Nuxulbari tea estate in the district, which has been put in the bank’s queue due to the lack of cash.
India exported 233 million kg of tea in 2015-16, with total earnings of approximately Rs 4,493 crore.
According to Tea Board of India vice chairman Bidyananda Borkakoty, “On an average, a tea garden needs Rs 10 lakh per week to pay wages to the labourers.”
Borkakoty told The Wire from Guwahati, “After the demonetisation decision, the tea garden owners in Assam along with the tea associations reached out to the Reserve Bank of India (RBI) and the Assam government to find a quick solution for disbursement of the weekly wages. We wanted a direct intervention from the prime minister’s office to sort it out as non-disbursement of wages can lead to emergency situations including violence. There have been cases where labourers have gone berserk on delay of weekly payment due to them. On November 12, a temporary solution was found which is now being referred to as the ‘Assam model’. This brought some relief to both the owners and the labourers in the state.”
Though states like Kerala and West Bengal have not been able to make full use of the mechanism, and some small tea garden owners in Assam told this correspondent that there “has been a delay of 3-4 days in receiving cash from the banks due to non-availability of the new and small denomination notes”, Borkakoty said, “The banks in Assam and the RBI are cooperating.”
“The wages of labourers come in two components – cash and kind. While the cash part is being affected by the demonetisation move for some, primarily because the weekly ceiling of withdrawal of cash for a current account was initially kept at Rs 20,000 and now at Rs 50,000, the kind part has continued in all gardens. This means the labourers are continuing to get their ration, firewood, access to health benefits like hospitals, etc. This is also the reason why the situation has not escalated into violence yet,” he said. The labourers are paid in cash as per the Payment of Wages Act, 1936.
“As per the Tea Board of India’s information,” Borkakoty claimed, “the gardens in Assam, and also Kerala, are not facing much problem in disbursing wages so far, though it is not the same in West Bengal and Tamil Nadu.” While the Kerala and West Bengal governments have allowed plantation owners to follow the ‘Assam model’, the Tamil Nadu and Karnataka governments have not, thus affecting not just tea garden workers but all plantation workers in the region.
Approximately 13.5 lakh planation workers, which includes tea garden workers, are employed in Kerala, Tamil Nadu and Karnataka. The plantation industry is considered the biggest private sector employer in the region. Bengal has approximately 300 tea gardens which employ close to four lakh permanent and casual labourers, as against 12 lakh in Assam. The approximate wage for a plantation labourer is between Rs 126 and Rs 132 per day.
In Kerala, said an official of a tea company in Munnar who did not want to be named, the state government’s decision to accept old Rs 500 and Rs 1000 notes in many places till more cash in new notes reach the state’s banks somewhat eased the situation for some garden owners.
“Some of the gardens which already had cash in the old notes could tide over the initial hiccup by disbursing the wages to the labourers in such notes in the first week. Thereafter, the ‘Assam model’ has been adopted. Now, we are in a queue because of lack of cash in small denominations in a large quantities in the banks. We need small cash to pay the labourers, not the Rs 2000 notes,” said the official.
According to Barkakoty, also advisor to the North East Tea Association, “Rs 50 crore is required in Assam every week to disburse the wages of the tea garden labourers,” mostly in small denominations. In the absence of it, labourers have been paid in Rs 2000 notes by the garden administrations in Assam and told to share it with two or three others at the nearby grocery shops, as per local media reports.
Directive to open bank accounts
While the provisional ‘Assam model’ is showing mixed results, a new salvo came from the Centre on November 21, leading the industry and the workers into fresh turmoil.
“Even as you are reeling from the November 8 decision, yet another directive has come to us now. We learnt on Thursday evening that all the garden labourers will now have to open bank accounts by December 5, so that their wages could be transferred online by the garden administration from December 10 onwards. It is a huge task. There is a rule by the minute from the government without taking into consideration any ground reality,” said Jabbar.
For a labourer to open an account, the documents required are two photographs, a proof of residence and a letter from the garden administration that he/she is its employer.
“Issuing such a letter to a permanent employee is fine, but what about a temporary or a migrant worker that the gardens use in season?” asked Jabbar.
“Is it possible to make four lakh workers open bank accounts in less than two weeks time? Think of the paper work. Will the banks, which have been anyway working overtime to handle change of old notes and disbursement of new notes to the entire public, have enough staff to assign for opening accounts of the labourers as asked by the Centre? Is the Centre thinking it will be a smooth process for the poor labourers? Already for three weeks, most garden workers have not been paid a penny for their hard work and now they are being told you will not get anything if you don’t open an account by December 5,” said an angry Gautam Ghosh, general secretary of the Darjeeling Zilla Chia Kaman Mazdoor Union.
Ghosh pointed out, “Many gardens in Terai, Jalpaiguri and Darjeeling are in remote areas, away from the banks and ATM machines. At the most, there will be one bank there. How will it handle thousands of labourers at one go? Also, most labourers are not used to the banking system; they don’t know how to operate an account. By taking such a drastic step, the government is pushing the labourers, at least in Bengal, to starvation,” he said. Representatives of garden workers’ unions, Ghosh said, “have a meeting with the Darjeeling DM today (November 25) where he will be urged to release the wages of at least a week.”
If the present situation continues, he added, “We will resort to a dharna from December 1-2. This is not acceptable to us.”
Sandeep Mukherjee, principal advisor to the Darjeeling Tea Association, told Hindustan Times, “We are expecting workers’ unrest. We have alerted the police. We have requested the trade unions to appeal to the workers to maintain law and order and cooperate with the management.”
Borkakoty is aware of the “huge task” at hand but is highly hopeful.
“We initially thought it won’t be possible, particularly in Assam as it has a huge number of labourers, but the banks seem confident of it. They are willing to set up camps in the gardens to facilitate it. Also the option of placing bank correspondents and customer service points within the tea garden premises are being worked out to dispense cash. We have welcomed the move also because it will address the safety issue faced by the garden owners. Every week, the garden administration in Assam has to seek security from the local police to bring cash from the banks for disbursal of wages. It is a risky job, there has been many cases of looting of such cash. Recently, militants attacked such a cash van in Pengeri tea estate of the state. That problem will be over now,” he said.
As per the government order, the gardens have been asked to provide space to set up ATM machines to enable the labourers to bring out money from December 15 onwards.
“The move has some other long term benefits too. Some are asking how would just one machine handle the rush every weekend, but I feel it should be possible once the labourers know that they can come any time of the day and night to take out money as and when they would need it. Some would also go to the bank to take it out. As per the latest order, banks have been asked to set up awareness camps about financial security and how to operate an account along with NABARD. Eventually, it will also make labourers used to the concept of saving money, unlike now,” said Barkakoty, part of the meeting called by Assam chief minister Sarbananda Sonowal on November 21 to pass the latest order. He said the top officials of the State Bank of India, present in that meeting, assured the workers’ union, the owners and the tea association members that it would also make available mobile ATMs in the gardens on the wage disbursal days.
“In Assam,” he said, “many temporary labourers used by the gardens in the leaf picking season also work on MNREGA projects because of which they already have accounts.”
The situation is not as rosy in the other states though. In Tamil Nadu and Karnataka, the owners have been instructed to wait for the labourers to open bank accounts by December 5 to transfer the wages online.
News reports quoted Ullas Menon, the general secretary of United Planters Association of South India, an apex body of planters of tea, rubber, coffee and cardamom in Tamil Nadu, Kerala and Karnataka, as saying that the non-availability of cash has stalled salary and advance payments in all the plantations. “There is huge resistance among the workers against payments through banks. This is understandable because if they accept cheques, they will have to either take leave or stay off work (in order to go to the bank),” Menon told Live Mint.
Many workers are reportedly opposed to it, also fearing that they would lose their BPL cards if the government find money in their bank accounts.
In Bengal too, the banks are not as proactive, said Ghosh. “No bank in Bengal has so far said that it will open a camp for the labourers in the gardens to help open accounts. Most will have to spend their own money and go to the banks in towns.”
As far as the ration to labourers in Bengal is concerned, Ghosh pointed out, “Unlike some gardens in Assam, the ration is no more the responsibility of the tea garden owners in Bengal. The amount cut for ration has now been included in the wages. The ration has now been linked to the government agencies as per the National Food Security Act, but the amount of grains, etc. received by the labourers now is not the same due to perennial unavailability of adequate supply. It often pushes labourers to buy more rice, etc. from shops at the market rate. With no wages coming, the situation can get worse now.”
Even as the plantation owners and workers are wondering how the situation will pan out in the next few weeks, Borkakoty added, “I just hope that the government allows the ‘Assam model’ to continue for some time if the December 5 deadline doesn’t succeed in achieving the intended target. Else, the situation can get out of hand.”