The Department of Industrial Policy and Promotion (DIPP) has sought Rs 4,000 crores from the Union budget for an incentive scheme for the leather and footwear segment designed to boost manufacturing, exports and job creation.
The scheme, on the lines of the special package for the garment industry announced in June last year, will be implemented over a period of three years to FY20-end. The Indian Leather Development Programme (ILDP) ended with 12th Five Year Plan (2012-2017). Since such schemes are now being conceived for three years, the projected expenses are up to 2020, which works out to around Rs 4,000 crore says a senior official.
The package for the labor-intensive garment sector gave garment factories the flexibility to hire contractual workers for a fixed period with ease so that they can meet seasonal supply commitments. The government also raised the overtime work limits to 8 hours per week against the current 50 hours per quarter and said the employees’ provident fund contribution will be optional for employees earning less than Rs 15,000 per month.
Besides, under the scheme, the government bears the entire 12 per cent of the employer’s contribution to the Employees Provident Fund Scheme for new employees in the garment industry, earning less than Rs 15,000 per month for three years. Job creation under the scheme has been at a slow pace so far, due to administrative glitches and lack of enthusiasm in sections of the industry.
According to sources the package for the leather industry has similar components. DIPP is now awaiting comments from the ministries concerned such as the ministry of skill development and entrepreneurship, ministry of environment, forest and climate change and ministry of water resources, on the leather scheme.
The ILDP is aimed at augmenting the raw material base through modernisation and technology upgradation of leather units, addressing environmental concerns, human resource development, supporting traditional leather artisans, addressing infrastructure constraints and establishing institutional facilities.
