Social Change- For the Two Percenters

her 1979, while the value of finished leather exports increased by around 73 per cent over the corresponding period in 1978 (from Rs 92,8 crores to 180.5 crores), the rise in the quantity was hardly 11 per cent Following the recommendations of the Seetharamiah Committee appointed by the government in 1972, quantitative restrictions were imposed on the export of semi-finished leather in July 1973, The government also imposed an export duty on semi-finished Jeather. On the other hand, export of finished leather was sought to be encouraged through various measures, such as cash incentives, duty drawback, air freight subsidy, etc. Rut these measures could not bring in the anticipated results, Around 80 per cent of the units engaged in the leather industry in India are in the cottage sector, and their contribution to the total leather exports is around 40 per cent These unity have neither the capacity and resources nor the skill to undertake a series of complex processes before the raw hide is finally converted into finished leather and/or leather goods. Caught between increasing restrictions and their own inability to meet international quality standards, these units have tried to take short-cuts and use loopholes in the definition of finished leather. The government's attempt to encourage a shift from semi-finished leather exports to finished leather and leather goods exports have been thus sabotaged Another adverse impact of these restrictions has been that they resulted in severe competition for raw hides and skins in the country. To maximise profits From incentives available to the finished leather exports, leather units having better processing facilities and resources tried to use the then prevalent buoyancy in the export markets and build up huge inventories of raw hides and skins offering higher prices which the cottage units could not afford. To some extent this artificially high purchase cost forced the Indian exporters to maintain prices above international levels even after world leather prices plummet ted in the second quar- ter of this year, thereby losing substantial export contracts, Evidently undeterred by past experience, government is going ahead with its strategy: the recent reduction in the cash compensatory support to certain categories of finished leather exports is aimed at taking the leather policy a step further, so as to shift the pattern of exports to leather goods. Thus, before achieving even, the first stage of shift from semi-finished leather to finished leather, further incentives are being compounded to promote export of leather goods.