Rs 1000 Crore ($130.4 MN) Package Sought by India’s Rubber Board for COVID-19 Lockdown-hit NR Sector

  • 2020-04-16 12:00:00
  • Reporter

The government-imposed lockdown in India was imposed on March 24 to help control the spread of the coronavirus. The economic impact of this lockdown are being felt across the nation, including by almost 100,000 rubber growers. Losses over the past three weeks have reportedly amounted to almost 35,000 tonnes.

India’s Rubber Board is now urging the central government to provide a Rs 1,000 crore ($130.4 million) package for the natural rubber sector to help balance out the losses incurred due to the lockdown. The Rubber Board is suggesting zero-interest loans, of the kind given in Bangladesh, which would help NR plantations to pay wages and maintenance costs during the lockdown period. Bangladesh created a BDT 5,000-crore ($589 million) corpus when the country first started being impacted by the coronavirus outbreak. This fund was used to lend to exporters, so that they could pay wages for three months. This loan is to be repaid in two years, in easy monthly instalments and is essentially an interest-free loan with a 2% service charge.

The package would include part-funding of price-stabilisation corpus, aid to replace old and ailing rubber trees and free rain guarding material for rubber plantations. The government of the southern Indian state of Kerala, India’s major rubber-growing state, has initiated a Rs 200 crore ($26 million) price stabilisation fund for rubber. This fixes the minimum NR price at Rs 150/kg ($1.95/kg). When the price falls below this benchmark, the subsidy is used to meet the shortfall. The Rubber Board has called on the central government to support this price stabilisation fund with additional assistance.

During the lockdown, the Kerala state government has granted exemption to rubber plantations, but they have been allowed to use just 25% of their regular workforce, in accordance with prevailing health and safety measures. This is also the case for latex processing units and latex gloves manufacturing plants, despite the soaring demand for surgical gloves and other personal protective equipment (PPE) during the coronavirus pandemic.

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