Indian govt approves special package for leather, footwear

The Union Cabinet chaired by PM Narendra Modi has approved a special package for employment generation in leather and footwear sector. The package involves implementation of Central Sector Scheme ‘Indian Footwear, Leather & Accessories Development Programme’ with an approved expenditure of Rs 2,600 crore over the three financial years beginning 2017-18.

“The scheme would lead to development of infrastructure for the leather sector, address environment concerns specific to the leather sector, facilitate additional investments, employment generation and increase in production. Enhanced tax incentive would attract large scale investments in the sector and reform in labour law in view of seasonal nature of the sector will support economies of scale,” an official statement said.

The special package has the potential to generate 3.24 lakh new jobs in 3 years and assist in formalisation of 2 lakh jobs as cumulative impact in footwear, leather and accessories sector, the statement said.

The special package also includes measures for simplification of labour laws and incentives for employment generation. For providing deduction to Indian company engaged in manufacture of goods in a factory towards additional wages paid for three years to new workman, the provisions of minimum 240 days employment in a year to a workman under Section 80JJAA of Income Tax Act has been further relaxed to 150 days for footwear, leather and accessories sector considering the seasonal nature of this sector.

Secondly, in order to attract large scale investments at global scale, the regulatory framework for labour related issues is proposed to be addressed by introduction of Fixed Term Employment under Sub Section (1) of section 15 of Industrial Employment (Standing Order) Act, 1946 looking at the seasonal nature of leather, footwear and accessories industry.

The Indian Footwear, Leather & Accessories Development Programme comprises seven sub-schemes, namely, Human Resource Development (HRD) sub-scheme; Integrated Development of Leather Sector (IDLS) sub-scheme; Establishment of Institutional Facilities sub-scheme; Mega Leather, Footwear and Accessories Cluster (MLFAC) sub-scheme; Leather Technology, Innovation and Environmental Issues sub-scheme; Promotion of Indian Brands in Leather, Footwear and Accessories Sector sub-scheme; and Additional Employment Incentive for Leather, Footwear and Accessories Sector sub-scheme.