Govt to fund plantation workers' social benefits

In a move that will benefit one million plantation workers in India, the coming Union Budget is likely to contain a proposal to finance 50 per cent of the cost of providing their social benefits.

Currently, the entire burden is with the employers. This results in a situation where workers are not able to get their social benefits when employers are incurring losses because of unfavourable market conditions.

"It would cost us only Rs 2,000 crore (Rs 20 billion) to fund the social benefits of plantation workers. This too would be spread over seven years. So the fiscal cost would not exceed Rs 300 crore (Rs 3 billion) a year," said a senior government official in the know.

At present, social benefits for the one million plantation workers are governed by the Plantations Labour Act, 1951.

Last year, the previous United Progressive Alliance government approved changes to the nearly six-decade-old Act. One such change was increasing the wage ceiling for workers to benefit under the Act to Rs 10,000 from Rs 750.

Also, medical facilities to the workers and the families were to be provided by the state governments and the cost to be collected from the employers.

"The Act has become archaic since the time it was conceived. It needs a rethink," the same official said, referring to the current situation where many firms are not able to fund the social benefits.

The Act provides for welfare of plantation labourers and regulates work condition in plantations. Its provisions apply to any land used or intended to be used for growing tea, coffee, rubber cinchona or cardamom which has 5 hectares or more area and provides employment to 15 or more labourers. It requires the employer to provide for housing, recreational, educational and canteen facilities under rules administered by the state government.

The proposal to partially fund the social benefits fits with the UPA government's thrust towards the aam aadmi approach, and also addresses key constituents of the alliance in states like West Bengal, Tamil Nadu, Kerala and Assam, where plantation workers are concentrated.

The current Five-Year Plan has schemes for rejuvenating plantation sector in five commodities -- tea, spice, coffee, rubber and cardamom -- which just need a more effective implementation.