Eastern region contributes 17 per cent to total leather goods exported from the country and is estimated to export Rs 2500 crore worth of leather goods this current fiscal.However, delay in VAT refunds, estimated at Rs 300 cr, is prime reason for fund starving leather industry. It is alleged by ILPA that Majority of the leather units in West Bengal are small in nature who have taken land in Bantala leather park , lack funds to set up a unit there.
Almost Rs 300 crore of VAT refund is due from West Bengal government which is what is in need by most of the companies would have been able to set up shops at the leather complex.
Only 10 units out of all the companies have taken 99 units at the Bantala Leather Complex, are operational.For the remaining units companies are neither getting their money, as VAT refund, nor favourable bank loan to begin operations. Beginning of operations at the leather complex would allow the units to expand capacity and install new technology.