Business & Economy

Cabinet okays special package for employment generation in leather and footwear sector

NetIndian News Network

New Delhi, December 15, 2017

The Union Cabinet today approved the special package for employment generation in the leather and footwear sector.
The package involves implementation of the Central Sector Scheme, Indian Footwear, Leather & Accessories Development Programme, with an approved expenditure of Rs. 2600 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, an official press release said.
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 three years and assist in formalization of 2 lakh jobs as cumulative impact in Footwear, Leather & Accessories Sector, the release said.
A sub-scheme under Human Resource Development (HRD) 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% 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.
The Integrated Development of Leather Sector (IDLS) sub-scheme proposes to incentivize investment and manufacturing including job creation by providing backend investment grant/subsidy @ 30% of the cost of new Plant and Machinery to Micro, Small & Medium Enterprises (MSMEs) and @ 20% 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 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 three 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.
The Mega Leather, Footwear and Accessories Cluster (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 up to 50% 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.
Under the Leather Technology, Innovation and Environmental Issues 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.
Under Promotion of Indian Brands in Leather, Footwear and Accessories Sector 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 three 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.
Under Additional Employment Incentive for Leather, Footwear and Accessories Sector sub-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 three years of their employment.
The sub-scheme would be applicable to employees with salary upto Rs15,000. 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. By enhancing the scope of Section 80JJAA of Income Tax Act, deduction will be provided 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 & Accessories Sector considering the seasonal nature of this sector.
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.
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