The Union Cabinet chaired by Prime Minister Narendra Modi has approved the
Rs 2600 crore 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 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.
The Special Package has the potential to generate 3.24 lakhs new jobs in 3
years and assist in formalization of 2 lakh jobs as cumulative impact in
Footwear, Leather & Accessories Sector.
Human Resource Development (HRD) sub-scheme: HRD sub-scheme proposes to
provide assistance for Placement Linked Skill Development training to
unemployed persons @ Rs. 15,000 per person, for skill up-gradation training to
employed workers @ Rs. 5,000 per employee and for training of trainers @ Rs. 2
lakh per person.
The placement of 75 per cent of trained persons is proposed to be mandatory
for availing assistance related to skill development training component. 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.
Integrated Development of Leather Sector (IDLS) sub-scheme proposes to
incentivize investment and manufacturing including job creation by providing
backend investment grant or subsidy @ 30 per cent of the cost of new Plant and
Machinery to Micro, Small & Medium Enterprises (MSMEs) and @ 20 per cent of
the cost of Plant and Machinery to other units for Modernization /technology
upgradation in existing units and also for setting up of new units. The
proposal under this sub-scheme is to incentivize 1000 units in Leather,
Footwear and Accessories & Components sector during the three years with
proposed outlay of Rs.425 crore.
Establishment of Institutional Facilities sub-scheme: The sub-scheme
proposes to provide assistance to Footwear Design & Development Institute
(FDDI) for upgradation of some of the existing campuses of FDDI into
"Centres of Excellence" and establishing 3 new fully equipped skill
centres alongside the upcoming Mega Leather Clusters, based on project
proposals, with proposed outlay of Rs.147 crore for the three years.
Mega Leather, Footwear and Accessories Cluster (MLFAC) sub-scheme: The
MLFAC sub-scheme aims at providing infrastructure support to the Leather,
Footwear and Accessories Sector by establishment of Mega Leather, Footwear and
Accessories Cluster. 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, for the three years.
Leather Technology, Innovation and Environmental Issues sub-scheme: Under
this sub-scheme, assistance is proposed to be provided for
upgradation/installation of Common Effluent Treatment Plants (CETPs) @ 70% of
the project cost. The sub-scheme will also provide support to national level
sectoral industry council/ association and support for preparation of vision
document for Leather Footwear and Accessories Sector. The proposed outlay for
this sub-scheme is Rs. 782 crore for the three years.
Promotion of Indian Brands in Leather, Footwear and Accessories Sector
sub-scheme: Under this sub-scheme, the eligible units approved for Brand
Promotion are proposed to be assisted. The Government assistance is proposed to
be 50% of total project cost subject to a limit of Rs.3 crore for each brand,
each year for 3 years. The proposal under this sub-scheme is to promote 10
Indian brands in the international market in three years with proposed outlay
of Rs. 90 crore.
Additional Employment Incentive for Leather, Footwear and Accessories
Sector sub-scheme: Under this scheme, it is proposed to provide the employers'
contribution of 3.67% to Employees' Provident Fund for all new employees in
Leather, Footwear and Accessories sector, enrolling in EPFO for first 3 years
of their employment. The sub-scheme would be applicable to employees with
salary upto Rs.15,000/-. The proposed outlay is Rs. 100 crore to assist in
formalization of approximately 2,00,000 jobs in the sectors.
The special package also includes measures for simplification of labour
laws and incentives for employment generation, as under: Enhancing Scope of
Section 80JJAA of Income Tax Act: 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 would be further
relaxed to 150 days for Footwear, Leather and Accessories Sector considering
the seasonal nature of this sector.
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.