Budget fails to provide hope to leather market

The micro, small and medium enterprises (MSME) sector has been the worst-affected by the lockdown. Hoping to get a careful handholding from the government, the informal sector in Mumbai does not seem to be very impressed with the Union Budget 2021.

Worst hit by the economic slowdown, the famous leather manufacturers of Dharavi said that the budget yet again has nothing much to help them revive their shrinking businesses.

The leather business is one of the biggest contributors to Dharavi slum’s informal economy with an estimated turnover of $300 to $500 million each year. For instance, 1.5 lakh people in Dharavi work in the leather industry. However, the once flourishing trade is now losing its edge due to factors like the influx of cheap Chinese goods and the rising cost of raw materials in recent years.

Manohar Raibage, president of Leather Goods Manufacturing Association said, “The businesses were hit due to demonetisation, and implementation of Goods and Services Tax (GST) added to our misery. Above all this, the influx of cheaper Chinese goods has led to our sales declining by each day. The original leather bag that we sell for Rs. 3000 to Rs 5000, Chinese fake leather products are sold at Rs 500. Customers prefer buying cheaper options. Businesses are not picking up even during festive seasons, it is getting unsustainable, hundreds have shut shop in the last three years.”