New Delhi: The labour-intensive leather and footwear sector is likely to receive 2,600 crore incentive package to boost exports and job creation, official sources of the Union Cabinet have. The commerce and industry ministry have made this proposal.
The cabinet is hopeful to get a decision soon on this as the final proposal has been sent to the cabinet, informed by the sources, who do not wish to be named.
On the lines of the steps announced for the textiles sector last year, the package was prepared that includes both tax and non-tax benefits . The package for the textiles sector included relaxation in certain labour laws, income tax concession, 100 per cent employer's contribution to EPFO (Employees' Provident Fund Organization) by government, rebate of state levies for exports, etc.
The footwear, leather, and accessories development programme as been given tax incentives by the ministry. As it is a thrust segment under the 'Make in India' initiative, the sector expects to get importance.
According to the industry experts, about 250 jobs people get job in this sector for every Rs. 1 crore invested. Presently, about 30 lakh people are directly employed in this sector.
China is giving Indian leather manufacturers a tough competition in global market in terms of pricing. The exports of leather and leather products have gone down by about 9 per cent to USD 369.24 million in October. Products made up of synthetic leather mainly dominate the Indian industry. It comprises for about 90 per cent of the total leather manufacturing done in the country.