In November 2016, the newly elected BJP government in Assam decided to use demonetisation as an opportunity to ensure financial inclusion of 10-12 lakh tea workers. Nearly 800 tea estates were asked to switch from cash payments to bank transfers of wages.
The initiative received the full support of the Centre, which ordered banks and telcos to make necessary arrangements for bank transfers to nearly 21 lakh tea and jute workers in Assam, West Bengal and Andhra Pradesh.
A year down the line, nearly 3.7 lakh jute workers have benefited from the initiative, as bank transfers have become the norm in nearly 80 mills in West Bengal and Andhra Pradesh. Barring a small fraction, almost all the 21 lakh workers now have a bank account.
Tea plantations in cash mode
However, when it comes to tea plantations, cash payments are still the default payment mode across Assam and West Bengal. While no official data is available, only a handful of the 295 estates in West Bengal have switched to cashless wage payment due to the inadequacy in banking services.
“All the promises of installing new ATMs and deploying banking correspondents (BCs) for salary disbursement went up in smoke,” an industry insider in West Bengal told BusinessLine . The failure is most glaring in Assam, where the government went gung-ho about cashless transactions. A high-powered committee under the Chief Minister was to meet twice a month to ensure implementation.
Initially, the Assam government set December 15, 2016, as the deadline for a complete switch to bank transfer of wages. The deadline was later extended by six months.
But the enthusiasm didn’t last long. Barely a fraction of the 1,000 new ATMs promised by the government came into existence. The high-powered committee — comprising district collectors, bank officials and telcos — hasn’t met for much of 2017.
Due to the nature of the industry, tea workers need huge cash dispensation facilities, which are costly in remote areas. Naturally, banks have little commercial interest in the move. As things stand, their services are well short of demand.
There are also reports about BCs from the United Bank of India, the largest bank in the region, discontinuing their services due to disputes with the bank. This has forced at least one garden, near Moran in Dibrugarh, to shun bank transfer of wages.
UBI, however, denied such reports. A senior bank official said all promised facilities were in place in West Bengal and Assam. He blamed connectivity issues for disbursal-related problems.
PVSLN Murthy, Chief General Manager of State Bank of India, reported installation of 52 ATMs. “(Salary) payment is happening through accounts in all SBI served gardens,” he said, claiming that the bank would explore the possibility of extending its services to other gardens as well.
Murthy says connectivity issues are affecting payments in only 10 per cent of the gardens, in remote areas. Interestingly, such issues are cropping up even in estates near urban areas, such as Dhekiajuli in Sonitpur district.
The tea industry, meanwhile, has turned into a great supporter of bank transfers as it prevents leakages. Shekib Ahmed, Director of Bagasa Industries, which owns Halmiramook garden in Golabari district, says bank transfers saved him 15-20 per cent of the estimated bonus payment of ₹80,000 during the festive season.
The saving is attributed to the elimination of “ghost workers” in the tea sector. Taking advantage of the cash transactions, a section of employees (and even some owners) inflate the employee numbers.