Cabinet nod for Rs 2,600 cr jobs’ package for leather sector

New Delhi, Dec 15 (IANS) The Union Cabinet on Friday approved a special scheme for employment generation in the leather and footwear sector entailing expenditure of Rs 2,600 crore over three financial years up to 2019-20.

Briefing reporters here following the meeting, Law and IT Minister Ravi Shankar Prasad said that the special package for the employment generation in the leather and footwear sector is expected to generate around 3.24 lakh jobs in this period.

According to a Commerce Ministry release, 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," it added.

The "Indian Footwear, Leather and Accessories Development Programme" approved by the cabinet is made up of multiple components.

For instance, the human resource development sub-scheme proposes to provide assistance for placement-linked skill training to unemployed persons at Rs 15,000 per person, for skill upgradation training to employed workers at Rs 5,000 per employee and for training of trainers at Rs 2 lakh per person.

"The placement of 75 per cent of trained persons is proposed to be mandatory for availing assistance related to the skill development training component," the statement said.

"The proposal under this sub-scheme is to train/skill 4.32 lakh unemployed persons, upgrade the skills of 75,000 existing employees and train 150 master trainers during the three years with proposed outlay of Rs 696 crore," it added.

The Integrated Development of Leather Sector (IDLS) sub-scheme proposes to incentivise investment and manufacturing by providing investment grant or subsidy at 30 per cent of the cost of new plant and machinery to micro, small and medium enterprises (MSMEs) and at 20 per cent of the cost of plant and machinery to other units for modernization in existing units as also for setting up new units.

"The proposal under this sub-scheme is to incentivize 1,000 units in the sector during the three years with proposed outlay of Rs 425 crore," the Ministry said.

Another component proposes to provide assistance to the Footwear Design and Development Institute (FDDI) for upgradation of some of its existing campuses into centres of excellence and establishing 3 new skill centres.

The Mega Leather, Footwear and Accessories Cluster (MLFAC) sub-scheme aims at providing infrastructure support by setting up clusters.

"Graded assistance is proposed to be provided upto 50 per cent of the eligible project cost, excluding cost of land, with maximum government assistance being limited to Rs 125 crore. The outlay of Rs 360 crore has been proposed to support 3-4 new MLFACs," the statement added.

Presenting the Union Budget earlier this year, Finance Minister Arun Jaitley had said that a special scheme would be launched to create employment in the leather and footwear sector.