Integrated Development of Leather Sector (IDLS)

Organisation

Department of Industrial Policy & Promotion

Objective

The scheme is aimed at enabling existing tanneries, footwear, footwear components and leather products units to upgrade leading to productivity gains, right-sizing of capacity, cost cutting, design and development simultaneously encouraging entrepreneurs to diversify and set up new units in areas such as Modernization of Tanneries, Modernization of footwear units & Modernization of footwear components units, Modernization of leather goods, Modernization of leather garments & Modernization of saddlery units. The scheme targets creation of positive ambience for technology up gradation , modernization and capacity creation for attaining global competitiveness through productivity gains, minimization of wastages, right sizing of capacity, cost cutting, design and development etc.

Eligibility

All existing units in leather and leather products including tanneries, leather goods, saddlery, leather footwear and footwear component sector having cash profits for 2 years, undertaking viable and bankable programmes on technology up-gradation on or after 29th August, 2008 are eligible for assistance. With a view to attract investment into the sector assistance for establishment of new units would also be provided. However, preference would be given to existing units. Assistance to new units would be restricted to setting up of plant and machinery. However, assistance to new units would be considered only if the project is appraised to be bankable and viable by bank providing loan in case of loan cases and by bank in which the unit has a working capital loan account in case of self finance case.

Brief

The financial assistance under the Scheme will be investment grant to the extent of 30% of cost of plant and machinery for SSI and 20% of cost of plant and machinery for other units (i.e. non small scale units) subject to ceiling of Rs. 50 lakh for technology up gradation /modernization and/or expansion and setting up a new unit. The rate of assistance would be @ 20% for all units (both SSI and Non-SSI) above Rs. 50 lakhs subject to ceiling of Rs. 2 crore. The disbursement above Rs. 25 lakh would be released in four equal annual installments. Investment grant would also be available to units investing their own resources. For the purpose of this Scheme, the definition of small-scale industry would be the same as notified by the Government on the date of sanction of the project. The cost of up gradation/setting up new units under the scheme will include: Bill value of machines, Sales and excise tax, Transportation and transit insurance cost, Import related duty & Installation and commissioning charges including civil and electrical work restricted to 5% of total landed cost of machine.