AAPCI has also stated that the existing plantation companies should be given adequate time relaxation or reschedulement for redemption of liabilities so that the investors' interest is taken care of, the maximum possible extent. This will help in preserving the interests of the investors and further the cause of development of wastelands and forestry as closure of these companies would lead to loss of entire investment and would render the developed lands barren.

Speaking to The Financial Express, the AAPCI president, Mamta Sinha said that national priorities, social needs and above all commercial possibilities initially gave birth to agro plantation and forestryindustry in late eighties. But due to absence of a regulatory framework for all these years led to a galloping growth of collective investment enterprises throughout the country. Estimated figures say that 800 companies mobilised approximately Rs 3,000 crore in a short span under various schemes like agro bonds, units, goat/sheep units, teak equity schemes involving even transfer of land.

She said that since there was no regular system of funding, the companies resorted to raising funds from the public at large mainly through multilayer marketing system involving a large number of agents. This created an environment for making investments for lower middle class also. Since, the mechanism of raising funds was very costly and involved manual working by large manpower, the companies had spent major chunk of funds on providing employment to agents and could spent proportionately less on agro forest activity. Still many companies have been able to buy huge areas of wastelands and carried out developmentactivities thereupon. No doubt, the industry had done a good job in retrieving the waste national assets and added value thereto but could not become commercially viable.

Singh stated that one of the reasons for the companies not being commercially viable is that the fund raising cost is very high due to unhealthy competition and undercutting. The land acquisition process and related legal hassles are very cumbersome to embark upon agro based projects. This has led to very long gestation period even to start the projects. The role of existing companies cannot be discounted by alleging that intentions of majority of companies are not good. It needs to be reviewed in totality that this industry has significantly contributed to the national cause and all these problems have risen due to various impediments and legal hassles.The major problem of existing enterprises is liquidity because most of them have raised short-term funds to finance long gestation liquid projects. Liquidity crunch is due to short-termsourcing and investment in liquid assets. Most of the people feel that recycling of funds is purely a fraudulent exercise, whereas short-term loans have to be recycled to meet the long-term funds requirement till plantation are ready for marketing. There can, of course, be some inter-cropping which may contribute very significantly to the revenues.

Singh stated that other problems before the industry are stringent land ceiling laws in some states, high stamp duty and hassles associated with land transfers, lack of lucrative promotional schemes of the government lack of general R&D facilities for commercial use. These problems when combined with the immediate cause have put the industry almost on the verge of collapse.

She said that collective investment enterprises like plantation companies are of a peculiar nature which involves financial participation of the public on a large scale and also project implementation which has a large horizontal spread. Trying to govern the functioning of these companies ona set pattern of functioning like regulations under Companies Act, IT Act, State and Central Sales Tax Acts, Indian Forest Act, labour laws, Transfer of Property Act and Indian Contract Act will only lead to confusion.Sinha finally suggested that a well thought of systematic control of the situation is needed to ensure return of maximum possible investment of investors, interim directives to check unproductive expenditure, ensure exemption from land ceiling laws, tax exemption, exemption from stamp duty, granting development agency status to the industry, recognising multilayer marketing system, incorporating provisions for recurring schemes.