Govt okays ₹ 2,600 cr package for leather, footwear industry

The package involves implementation of central scheme 'Indian Footwear, Leather & Accessories Development Programme' with an approved expenditure of INR 2,600 crore over the three financial years from 2017-18 to 2019-20.

"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 two lakh jobs as cumulative impact in footwear, leather and accessories sector, added the statement.

The special package also includes measures for simplification of labour laws and incentives for employment generation. These include enhancing the scope of Section 80JJAA of the Income Tax Act for providing deduction to an Indian company engaged in manufacture of goods in a factory towards additional wages paid for three years to new workmen.

Moreover, the provisions of minimum 240 days employment in a year to a workman under Section 80JJAA would be further relaxed to 150 days for footwear, leather and accessories sector considering the seasonal nature of this industry.

The package also includes introduction of fixed term employment. "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," said the statement.