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Cabinet gives nod to Rs 2,600 crore package for leather, footwear sector

18 Dec 2017 Evaluate

The Union Cabinet chaired by Prime Minister Narendra Modi has given its approval to a special package for employment generation in the leather and footwear sector entailing expenditure of Rs 2,600 crore over three financial years up to 2019-20. The special package has the capability to generate 3.24 lakh new jobs in 3 years and assist in formalization of 2 lakh jobs as cumulative impact in footwear, leather and accessories sector.

The package involves implementation of Central Sector Scheme ‘Indian Footwear, Leather & Accessories Development Programme’. The 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.

In addition, 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 scheme would lead to development of infrastructure for the leather sector; address environmental concerns specific to the leather sector and facilitate additional investments, job creation and production. That apart, the enhanced tax incentive would attract large-scale investments in the sector and reforms in labour laws in view of seasonal nature of the sector will support economies of scale.


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