Government approves Rs 600 crore mega leather cluster in 12th Plan

NEW DELHI: The government has approved Rs 600-crore mega leather cluster development scheme for the 12th Five Year Plan (2012-2017), to make the Indian industry globally competitive.

"The concept of mega leather clusters seeks to address the constraint of large infrastructure with integrated production chains in the country," the Department of Industrial Policy and Promotion notified.

Considering the limitations of space in the existing clusters, it is anticipated that clusters would be set up in Andhra Pradesh, Bihar, Jammu and Kashmir, Himachal Pradesh and Rajasthan in view of the labour advantage and raw material availability, sources said.

Each cluster project will be implemented by a special purpose vehicle (SPV), wherein the government could provide financial assistance up to 70 per cent of the project cost.

"The SPV will have to bring in the land for the project at its own cost. Preference would be given to those proposals where states offer land free of cost or on nominal value," they said.

The clusters can host production units of footwear, footwear components, leather goods and leather garments.

The leather industry which is predominantly concentrated in the small-scale sector provides jobs to about 2.5 million people.