Pharma industry may move out to HP

Fatehabad, Mar 12: The Centre's decision not to incorporate recommendations of the Pranob Sen committee in the 2006-07 Budget has placed the Pharmaceutical Industry in Haryana in a precarious situation.

The industry has threatened to shift to the excise free zones of Himachal Pradesh and Uttranchal.

The recommendations included reducing the central excise on medicines from 16 per cent to 8 per cent besides increasing the limit of exemption from the payment of excise to the small-scale industry from Rs one crore per year to Rs five crores per year.

Mr P K Gupta, President of the Haryana Pharmaceutical Manufacturers Association (HPMA) when contacted today said the pharmaceutical industry of the state has been feeling the pinch of hiked Central Excise Duty (ED) for the last one year. The ED, which was earlier levied on ex-factory price, was levied on the Maximum Retail Price (MRP) from last year, he added.

Mr Gupta said that this made the ED virtually 37 per cent on the ex-factory price. Contrary to this, the ED was totally exempted in neighboring states of Himachal Pradesh and Uttaranchal.

The pharma industry throughout the country had been pinning its hope on the national budget as the Pranob Sen Committee, a task force constituted by the central government to look into the demands of the industry, Mr Gupta said. The committee had recommended to the Centre to slash ED on medicines from 16 per cent to 8 per cent and also increase the limit of exemption from the existing Rs one crore to Rs five crores, he added.

But the union budget did not even touch the pharma industry in the budget, Mr Gupta noted.

Though the pharma industry throughout the country was affected by the high rate of ED on medicines, those from Haryana and Punjab were the worst affected as they had to compete with manufacturers operating from the neighbouring excise free zones in Himachal and Uttranchal, Mr Gupta said.

He said that a delegation of the HMPA had met the Revenue Secretary in this connection after the presentation of the union budget and made it clear that the pharma manufacturers in Haryana would either have to shift or close down their units. He warned that shifting the entire industry to hills states was fraught with other difficulties as these states lacked basic infrastructure like roads and water etc.

Mr T C Kansal, General Secretary of the HPMA echoed the sentiments of Mr Gupta and alleged that the government had given a step motherly treatment to the pharma industry, particularly the small-scale pharma units. He said that the state government was going to face heavy financial losses in the shape of taxes denied in case the whole pharma industry decided to shift to excise free states.

UNI