According to budget proposals, the spinning sector, which had been originally left out of the purview of the fund, would also be eligible for itAccording to the Council of Leather Exports chairman Rafiquee Ahmed: "The tannery modernisation fund has been finalised. It will be announced in a couple of week's time."

The tannery modernisation fund, a long-term strategy to improve leather exports from the country, would provide for the tanning sector to buy equipment and also go in for common effluent treatment plants. Around Rs 1,050 crore would be distributed as loans to the sector in the next five years tomodernise their units, Ahmed said, adding two financial institutions had been selected to extend the loans to the required units.The government, on its part, would offer a cash subsidy of 30 per cent on purchase of equipment by the units. "This will help the units to offset the high interest rates they will have to pay for availing the loan from the financial institutions," he said. Taking the subsidy into account, the interest rate for availing the loans would be around 10 per cent, he said. Ahmed said the modernisation fund was the key to upgrade tannery units as so far modernisation had by-passed the sector.

Further, a council's official said the tannery sector had not been modernised as most of the units were small scale units. "These units do not have money for modernisation as they have to spend a lot on pollution control," the official said.

It was with this in mind that the Council for Leather Exports mooted the fund last year. Currently, credit is offered to these units at 1.4-14.5per cent. Majorinvestment in tannery is an essential part of the leather industry as quality of leather products was determined by these units, he said.

BOX : Leather prices ease

Raw leather sheep salted and unsalted skin prices yielded moderate ground on the local leather market here on Wednesday following slackened demand because of change in weather from winter to summer.

However, treated leather prices maintained their earlier level on sporadic support. Sheep skin price of salted and unsalted lost Rs.10 each to close at Rs 100-105 and Rs 125 from Rs 110-115 and Rs 135 per 32X40 inches respectively.

Following were today's raw leather prices per skin in inches in Rs.:Goat salted 30"X40" Rs. 65-70, goat unsalted 30"X40"Rs. 80-90, sheep salted 32"X40" Rs. 100-105 and sheep unsalted 32"X40" Rs. 125.

Treated leather prices per sq dm:

Goat suede 6-7.50 or 3.50 lot, goat napa 2.50-4.00 or4.50 lot, sheep napa 250-7.00 or 5.00 lot, furnished leather Rs. 100 per sq meter Rs. 90 lotends.