"The proposal (to increase domestic coffee consumption) is linked with the Coffee (Amendment) Act. We will have to get the act amended before going ahead," the sources in the commerce ministry said.

Coffee board chairman SV Ranganath said last week that the board had submitted a proposal at an outlay of Rs 30-crore. A bill to amend to the act had been introduced thrice in parliament but all the three times the government in power fell, leading to stalling of the bill.

The act is due for amendment after government allowed growers to market all the produce grown by them on their own in September 1996. The decision was taken in tune with the liberalisation process.

Before liberalisation, coffee growers had to mandatorily pool their produce with theboard, which then made allocation for exports and domestic consumption.

India's exports is nearly two-third of the average 2.20 lakh tonnes of coffee grown in the country, while domestic consumption has been stagnant around 55,000 tonnes for the last one decade.

Discounting fears that the proposal had been shelved in the face of opposition from the finance ministry, the sources said the plan to raise domestic consumption of coffee was expected to gather momentum, once the amendment to coffee act was ratified.

The bill would now have to be introduced again in parliament. The 1998 bill was passed by the Lok Sabha during the winter session, but before the Rajya Sabha could take it up, the Atal Bihari Vajpayee government lost trust vote in the Lower House.

Earlier also the amendment bill was slated for introduction in the 1997 winter session but before parliament could be convened, the then IK Gujral government fell.

Asked how coffee board would get the required funds for the promotion programme,Ranganath said with the proposal to raise the cess on coffee exports to Re one a kg from 50 paise, the government could easily get Rs 10 crore annually.

"We are also exploring ways of getting funds from international agencies," he said, adding coffee board had approached the Common Fund of Commodities (CFC) in Amsterdam. CFC is an arm of the International Coffee Organisation.

The commerce ministry had also been approached to help the coffee board get the fund, he said.

Ranganath said the proposal to raise domestic coffee consumption was important to ensure that lesser grade of coffee sold. According to a commerce ministry note, the domestic coffee consumption promotion project was necessary to halt the annual four per cent fall in domestic consumption.

The ministry has targeted a three lakh tonnes production of coffee by the end of Ninth Plan. Of this, two lakh tonnes is planned to be exported and rest to be consumed locally.

The programme basically aims at arresting the decline in domesticconsumption, achieve a compounded annual growth of 10 per cent in the next five years and create a high level of interest and involvement in the coffee category among masses besides consolidating it.

The key principles behind the campaign to promote coffee would be to focus on coffee as a beverage and take on other beverages like soft drinks, malted beverages and tea.

The proposal said the commitment should be of a long term to ensure that desired results were achieved.