Financial Daily from THE HINDU group of publications
Saturday, Oct 22, 2005
Financial Daily from THE HINDU group of publications Saturday, Oct 22, 2005 |
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Industry & Economy
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Leather CLE hopes to get upgradation fund notified soon R. Balaji
Chennai , Oct 21 THE leather industry hopes to get the Rs 290-crore technology upgradation fund notified within a fortnight. According to Mr Rafeeque Ahmed, Chairman, Council for Leather Exports (CLE), the notification is likely in about 10 days. The fund, sanctioned in July, was expected to be notified soon but hit a bottleneck when the Planning Commission refused to approve it with retrospective effect. The industry had hoped that it would be sanctioned with effect from April 2002 since units had applied even under the Ninth Plan period. Now, the CLE has urged the Commerce Ministry to expedite the notification. The units that have invested in upgradation earlier are likely to be considered under a different scheme. Over 130 tanneries have applied for about Rs 16 crore, for which a new scheme will have to be framed, Mr Ahmed said. The industry is looking forward to the fund, as it is crucial to catalysing new investments of over Rs 1,200 crore, according to the CLE. It had earlier said that over the next two-three years, this fund will catalyse investments by the industry, which is on a modernisation and capacity expansion drive thanks to demand from developed countries. International trends such as increasing costs in China are pushing international brands to diversify their source. More companies are looking at India as a source for leather goods, Mr Ahmed said. The fund will be available to all segments of the leather industry as a capital subsidy for plant and machinery. SSI units can get a 30 per cent subsidy and others will be eligible for 20 per cent up to a maximum of Rs 50 lakh. Tanning units, footwear manufacturers, and leather goods and garments units, which represent the growth areas in leather, are expected to absorb most of the funds. The Planning Commission approved the fund over two years ago, and the Cabinet Committee on Economic Affairs gave its nod in July.
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