Dent on poverty visible, says Piramal

Ahmedabad, Nov 26: Fast economic growth is a solution to lots of problems faced by the country, said Ajay Piramal, chairman of Nicholas Piramal India Ltd.

Speaking at the IIM-A's Confluence-2006 seminar on ''Advantage India - Retaining the Edge'' here yesterday, Mr Piramal said the services sector has contributed 50 per cent to the country's Gross Domestic Product (GDP), manufacturing 28 per cent and the balanced by agriculture.

Two-thirds of India's population has contributed to 21 per cent of the GDP. Agriculture is holding us back at 8 per cent GDP growth.

If agriculture grows faster, then it will do good for the country's economy, he added.

''We have reduced our poverty by 10 percentage points and this is indeed significant,'' he noted.

For the first time in the past 4-5 years, the international companies in US, UK and other countries are coming under pressure on costs. The pressure is from regulatory authorities to scale down the prices. In contrast, the manufacturing costs in India are quite low without compromising on quality. This has also been confirmed by a MacKinsey study, Mr Piramal said.

Gone are the days when people accepted the concept that lower costs meant lower quality. Today, the Indian pharma companies have to deliver quality and they have closer links with other pharma companies of the world. Lots of the Indian companies are going in for overseas acquisitions, he said.

''We have acquired three international businesses and for the current year, 50 per cent of our revenue will be from the businesses acquired abroad. We have six plants outside the country,'' he added.

In Europe it takes 2-4 years for setting up a plant. While in India it takes only 9 to 18 months and that too at half the price, Mr Piramal said. Several Indian companies are investing more in research today and with a pool of highly-skilled manpower, he said there is going to be better capacity in R&D value chain.

On discovery process, he said it takes 10 to 12 years from target identification to final approval and it could cost anywhere from US 800 million dollars to USD 1.5 billion. Good discovery can decrease burden on the population going in for modern medicines.

''We have a medically naive population as lots of people, especially in the rural areas, have not been exposed to medicines. So if the costs are controlled, it can lead to better services and innovative solutions,'' he observed.

''Two years ago on November 18, 2004, President A P J Kalam had inaugurated a state-of-the-art R&D centre of ours. Today, we spend over Rs 100 crore every year on basic research,'' Mr Piramal added.

UNI