Final Cabinet nod for tea sector relief package likely today

Thursday, 2 January 2020 03:42 - - {{hitsCtrl.values.hits}}

Govt. mooting major loan restructuring plan for tea sector
Package to be finalised after considering stakeholder observations

By Chandani Kirinde

Cabinet is likely to finalise the relief package for the struggling tea sector when it meets today after considering input it had sought from stakeholders, official sources said yesterday.

Minister of Community Empowerment and Estate Infrastructure Development Arumugan Thondaman had also wanted his observations to be considered before the relief package gets the final Cabinet nod, the sources said. Cabinet at its meeting on 18 December received approval for the relief measures which will include a major loan restructuring plan for the sector which could include a moratorium on loan repayments and write-off on interest in some cases.

Official sources said that this was meant to provide relief to factory owners whose accumulated loans and interest payments stand at around Rs. 25 billion.

The Government is looking to write off 20 to 30% of the due amounts taken by those in the sector as well as with other banks on giving a moratorium between six months to a year on repayment of loans while also looking to introduce new laws by which the auctioning of mortgaged properties of those on the sector can be delayed by a year.

The Government will also take Rs. 500 million from the Tea Promotion Fund to give loans to factory owners via a scheme to be implemented through the banks.