Govt readying Rs 2,500 crore package for leather and footwear industry

The finance ministry is likely to approve a Rs 2,500 crore package for the leather and footwear industry, a move that is expected to boost exports, generate employment and make the sector competitive globally.

"Finance Ministry's expenditure finance committee (EFC) has already examined the proposal. They may grant a package worth around Rs 2,500 crore for the leather and footwear sector," a senior government official told Moneycontrol.

EFC will finalise the amount in the next few days and will be taken up by the Cabinet by the end of the month, the official, who did not wish to be identified, said.

In May, the Department of Industrial Policy and Promotion (DIPP) had sought a package worth Rs 4,000 crore from the Finance Ministry to support the leather and footwear industry, based on the Rs 6,000 crore package announced for the textiles sector earlier by Arun Jaitley in the 2017-18 Budget.

DIPP had floated a revised Indian Leather Development Programme (ILDP) after the scheme ended with 12th Five Year Plan (2012-2017). With the end of the five-year plan model by the Narendra Modi-led government, the existing schemes are now being continued for three years.

Following this, the DIPP projected expenses of Rs 4000 crore for ILDP up to 2020. However, with an amount of Rs 500 crore allocated for the scheme in the Budget 2017-18, the finance ministry is likely to grant a package lower than what the trade and industry ministry had sought, the official explained.

DIPP is the nodal agency for the central sector scheme, ILDP, which was approved with an outlay of Rs 990.36 crore for 12th Plan period (2012-17). The Centre has already allocated Rs 500 crore towards ILDP for the current financial year.

The programme aims at “augmenting 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.”

With six sub-schemes including Integrated Development of Leather Sector (IDLS), human resource development, support to the artisan, leather technology innovation and mega leather cluster under ILDP,  DIPP has also asked for more incentives to scale up the programme.

The department is looking at liberalising labour laws by incentivising employers to bring labourers under the formal sector and a new sub-scheme that will take care of employment generation is also in the offing, the official said.

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