Govt aid for tanneries to stay

KOLKATA: Central government support for modernisation of tanneries and leather units under the Integrated Development for Leather Sector (IDLS) scheme is expected to continue for another five years.

The department of industrial policy and promotion (DIPP), which approves, sanctions and monitors the scheme, has recommended to the Planning Commission to extend the scheme up to the 11th Plan period. Originally, the scheme was only meant for the 10th Plan. According to an official of the commerce and industry ministry, talks are on with the Planning Commission to extend the scheme till the 11th Plan period.

The Planning Commission in all likelihood is expected to give a nod to DIPP’s proposal. Getting funds for continuing the scheme would not be a problem since a good portion of the Rs 290-crore fund under IDLS is likely to remain unutilised during the current plan period, he said.

The IDLS scheme was scheduled to be implemented during the 10th Plan, but became operative since November 2005. Due to the late start of the total allocation of Rs 290 crore under the scheme about Rs 50 crore is slated to be sanctioned as subsidy for modernisation of tanneries and another Rs 21 crore for modernisation of leather goods units within the current plan period, ending March 31, 2007.

With this, some Rs 219 crore would remain unused under the scheme during the current plan period, which has been recommended to be utilised in next five years, the official said.

This makes us hopeful of getting the subsidy support from the Centre for modernisation of tanneries and leather goods units for the next five years, even as there is no mention about the IDLS extension in the 2007-08 Budget, said an official of Council for Leather Exports, who played a key role in extracting the scheme from the government.

Central Leather Research Institute (CLRI), which is authorised to vet proposals for tannery modernisation, has received 220 applications, entailing a subsidy of Rs 50 crore. Of this, it has cleared 89 applications, for which Rs 23 crore of subsidy has already been sanctioned by DIPP. Another Rs 25 crore of the central grant are expected to be cleared by DIPP in the last month of the 10th Plan period.

As for leather goods modernisation, Footwear Design & Development Institute (FDDI), the vetting agency for such proposals, has got 80 proposals sanctioned by DIPP with a subsidy commitment of Rs 15.64 crore. Work is underway to get sanction for an additional subsidy of Rs 6 crore by March 31 for more than 60 proposals.

The IDLS scheme was launched by the Centre to accelerate modernisation in the leather industry.