In its attempt to systemise this unorganised sector and promote the industry the council embarks on various programmes such as organising trade fairs both domestic and international, apart from inviting buyers-sellers delegation from other countries. The Financial Express, spoke to HR Malik, chairman (western region)of the council on various issues including the so-called recession. Excerpts:

About the recession in the industry

The global recession and the devaluation of our competitors' currencies had a direct impact on exports. It may be noted that when the Indian rupee was devalued by around five to seven per cent, the currencies of our competing countries like Indonesia, Brazil and Korea depreciated by around 50 per cent. This resulted in their products being comparatively cheaper and in turn gave them a better edge in the global markets.

As a matter of fact, the eight months of last fiscal, that is from April to November, the industry registered a negative growth in exports. But from December (1997) onward, the industry started registering a positive trend, though marginally to the tune of about two to three per cent. Even though, we don't have the figures of February and March 1999, the indications are that the figures would rise, may be to about three to four per cent.

On the domesticindustry vis-a-vis others

It is difficult to compare the domestic industry with the international ones, because it depends on myriad factors like the quality, price factor, economy among others. I can definitely say that the industry is growing but steadily in both quality and quantity and in a few years' time, the domestic leather industry would be at par with those overseas.

A few years ago, Indian leather was not considered reliable, but at present this sector has a good reputation in the international markets.

On the impact of the budget

Even though there has been a mention about the leather industry in the budget, I feel it wasn't sufficient, not to mention sops. I personally feel that the budget had neither negative nor positive impact on the industry. Even in the recent budgets there has been only a passing mention about this industry, but we have done our part by sending representations to the finance ministry before and after the budget. Just the mentioning of this sector in thebudget shows that the government is aware and would do everything possible for its well-being.

On the effect of World Trade Organisation (WTO) norms on the Indian government

At times our legitimate refund of taxes which are given by way of drawback and other schemes are challenged by WTO, accusing the government of providing subsidies to this sector. The Indian government is scared to provide concessions to this sector, feeling that it will go against the rules and regulations of WTO. Even if the centre gives certain concessions to this sector, it is negated by the restrictions and norms put forward by other countries, for example import and anti-dumping duties to name a few. To be precise the centre fears that they will be pulled-up by the WTO for providing benefits to this sector.

About the Exim policy

To be precise the Exim policy didn't provide much help to this sector. Of course there were some benefits for exporters, but that was not exclusively for the leather industry. Theindustry is facing problems and the recently announced Exim policy didn't address any of these. But I would like to mention that the import of finished leather goods has been exempted from the additional five per cent duty which had been levied on every other export commodity in the country. This shows that the government has realised the importance of allowing imports of duty free finished leather into the country, which is a move in the right direction.

The allocation of green and red cards mentioned in the Exim policy would help to eliminate the hassles faced this sector to some extent.

About the hassles plaguing the industry

The main hassle is acquiring finance for development programmes. It should be noted that the rate of interest of export finance was nine per cent till March 31, which has been raised to 10 per cent. The same in developed countries is never more than five per cent. Allocation and distribution of finance at affordable rates to entrepreneurs to procure the right equipmentand knowledge is the need of the hour. Another hassle is the way of taxation which is not logical. For example the drawback fixed for leather scandals on FOB basis is 6.5 per cent where as that of leather shoes is 13 per cent.

The manufacturing and raw material costs for both these are the same, then why this disparity? Again this sector has the most number of illiterate employees, who are aware of their rights only, and not the responsibilities attached to it.

About the labour laws in the country

I feel that there should be a different set of labour laws for the different industries. Every industry should have its own labour laws, for no two industries are the same. The conditions prevailing in each industry is different and a hard and fast labour law will only hinder the progress of the industry, rather than helping it to prosper.