Financial inclusion in tea gardens

Assam government's decision to deposit Rs 3,000 into the bank accounts of each tea garden workers by November 15 is expected to help them meet some additional expenses. Opening of bank accounts for tea garden workers in the State post- demonetisation has made it easier for the State government to directly transfer cash assistance to them. However, financial inclusion of the tea-garden workers to happen in the true sense of this term requires focussed attention on improving the banking infrastructure in the garden areas and improving their socio-economic condition. Mere opening of bank accounts and crediting one-time assistance is not going to ensure financial inclusion. Smooth access to financial services of savings, credits and insurance can only ensure financial inclusion of the tea-garden workers. The State Government estimates that over 7.15 lakh tea garden workers will be benefited by this one-time assistance. Banking data show that a large number of account holders among the garden workers still do not have ATM cards. The figure was around 48 per cent till March 31. About 60 per cent of the 841 registered tea gardens have ATMs while rest are covered by 'Banking Correspondents'. Absence of a smooth digital-payment system prompt a large number of the garden workers to mount pressure on the garden management for the payment of their wages in cash. Thus, they remain deprived from financial services even after having bank accounts. The State Government launched the 'Chah Bagishar Dhan Puraskar Mela' scheme of crediting cash assistance into the bank accounts of tea-garden workers in January 2018 to boost their financial inclusion. The government deposited Rs 2,500 in each of the 6.33 lakh accounts in the first phase. In the second phase of the scheme, the second instalment of Rs 2,500 was deposited in 7.15 lakh accounts of tea garden workers. It cost the State exchequer about Rs 400 crore. Besides the banking infrastructure, the overall financial and socio-economic condition of garden workers are also critical to improve their financial literacy and ensure their financial inclusion. Apart from the weekly ration, the cash component of the workers wage is Rs 167 a day -- most of which is spent in meeting the household expenses including Education and Health. Therefore, even if wage is credited into their accounts and they have better access to banking operations and digital payment systems, savings cannot be expected. Moreover, because of poor financial literacy they often go for informal credit from moneylenders and individuals and end up paying more while returning the borrowed amount with high interest rates.

Access to cheap credit through the bank can make a big difference to the prevailing situation. Financial literacy is also important to encourage them to make whatever savings they can from additional income in the household. Besides the garden worker as the main earner, some members of these workers' households' pick up temporary livelihoods such as that of daily wage earners in the Construction sector which fetches additional income. However, due to the lack of skill training, majority of them work as unskilled workers. Imparting skills to become plumber, electrician, mason, carpenters to those already opting out of formal education will bring more income to the households. Skills required in Service sectors, entrepreneurial training in Agriculture and allied sectors will open up alternative avenues of employment for young children of tea garden workers who are either pursuing or completed secondary or higher level of education. A survey on the utilisation of the financial assistance that will be credited to the workers' accounts will help the State government to understand the overall financial requirement of the households and formulate a comprehensive scheme for improving their socio-economic condition. Augmenting the household income will relieve a lot of financial stress of the garden workers which will also be beneficial for the tea industry. Additional income coupled with improved banking infrastructure will facilitate savings of tea garden workers' households to reduce wasteful expenditure and encourage them to avail insurance schemes to feel more secured. Increasing interaction with the banks will also end their dependence on the exploitative lender in the informal credit market and channelise them to the formal credit mechanism. Savings in the accounts will encourage the banks disburse credits to account holders. The State government providing subsidies can ensure cheaper credit for housing and other needs. A robust banking system will encourage the youths in the tea garden areas to avail of credit for setting up micro, small and medium enterprises under various government schemes to augment household income and generate employment opportunities. Financial inclusion of the tea garden workers is critical to breaking their vicious cycle of poverty and backwardness. A concerted effort by the State government, garden management, banks, workers' unions can make this happen if they prioritise education, skill development, financial inclusion and financial literacy of tea garden workers and their family members.