Leather industry expected more in the Union Budget
The Union Budget 2004-05 announced by the Hon'ble Union Minister for Finance Shri P Chidambaram no doubt has certain significant features for the overall growth of the economy. Some of the thrust areas of the budget towards manufacturing activities are enhancing investments in the industry to create employment opportunities, providing further impetus to the SSI sector, strengthening of infrastructure which includes development and expansion of port facilities etc. The formation of an Investment Commission is a major step forward towards facilitating overseas investments
The budget also focuses towards regeneration of traditional industries, with a total fund allocation of Rs.100 crore. The leather industry has been recognized as one of the traditional industries having great potential for growth and export.
Though the Union Budget provides some minor relief like extending 5% concessional import duty on machinery to non-leather footwear sector & treating patent leather at a par with finished leather for duty exemption, the industry is very much disappointed that some of the Council's essential proposals have not been considered.
According to Shri S S Kumar, Chairman of the Council, the industry expected certain relief like enhancement of duty free import entitlement from 1% to 3% on embellishments, exempting Central Excise on manufacturing of footwear components, duty free import of effluent treatment machinery, duty free import of packaging materials, removing CVD on furskin import etc, which did not happen.
In fact, by way of withdrawing CVD exemptions in respect of items which attract Central Excise duty, the import of machinery even with concessional Basic duty has now become more expensive to the investors. This has come at a time when the modernization of manufacturing is seriously thought of by individual companies.
Shri S S Kumar was also surprised that the Hon'ble Finance Minister did not indicate any thrust for the export sector, particularly on income tax relief despite repeated appeals of the entire exporting community.
