Leather Sector Impact -Interim Budget 2009-10
The Leather Export Sector is extremely disappointed that the Interim Budget 2009-10 offers very little for the leather or exporting sectors. The single supportive measure announced is that of extension of 2% interest subvention for pre and post shipment rupee export credit, from the prevailing validity of March 31, 2009 to September 30 2009. The recently released Index of Industrial Production indicating that the Indian industry had grown year–on-year by minus 2% in December 2008, had highlighted the leather sector as being one of the industries that registered the largest production declines at Minus 11.4%.
Tanneries in Kanpur, Kolkata and Chennai have been running at near-idle levels indicating that the supply chain is drying-up and no orders are being placed by product manufacturers for raw material. The latter are operating at well below - upto 50% - of their normal levels, for there has been a spree of cancellations and reduction of orders by overseas buyers. As per current feedback, new orders are being booked only to the extent of 30% of last year’s level. There is a serious apprehension that exports will fall significantly in the coming months, thereby causing severe problems in production and employment.
The leather sector is a volume employment provider, particularly in rural /semi urban areas and a significant foreign exchange generator for the economy – it is its plea that the requests towards reviving export prospects and business be expeditiously addressed, so that the industry and its workers are helped out of this precarious situation.
Source: Council for Leather Exports (CLE)