The government today approved a Rs 2,600 crore special package for employment generation in the leather and footwear sector, which has the potential to generate 3.24 lakh jobs in three years and assist in the formalisation of 2 lakh jobs.

The decision was taken at a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi here.

The package involves implementation of central scheme 'Indian Footwear, Leather & Accessories Development Programme', with an expenditure of Rs 2,600 crore during 2017-18 to 2019-20.

"The scheme would lead to development of infrastructure for the leather sector; address environmental concerns specific to the leather sector and facilitate additional investments, job creation and production," the government said.

Moreover, the enhanced tax incentive would attract large-scale investments in the sector and reforms in labour laws in view of seasonal nature of the sector will support economies of scale, it said.

The package has the potential to generate 3.24 lakh new jobs in three years and assist in the formalisation of 2 lakh jobs as cumulative impact in footwear, leather and accessories sector.