HP Pharma industries fears withdrawal of excise duty exemption

Shimla, July 19 (UNI) The Himachal Pradesh Drug Manufacturing Association (HDMA) and Baddi-Barotiwala-Nalagarh Industries Association (BBNIA) today opposed the reported Centre's proposal to withdraw excise duty exemption to drug manufacturers.

The withdrawal of the duty exemption to the pharmaceutical industry under the industrial package announced in 2003 and due to expire only in 2010 would adversely affect the whole industry, HDMA's general secretary M M Goyal said at a press conference here.

He said the reported move was only in case for drugs manufactured on contract basis or loan license, which was internally accepted practice, should not be denied to industries already set up here.

It would be a breach of contract if the government backed out of its commitment since a large number of units which had shifted from other states for availing the excise duty benefit would be badly hit, Mr Goyal said.

He said the Centre was under pressure from other states who had been opposing the industrial package to Himachal and Uttarakhand on the plea that it had led to flight of pharmaceutical units from their states to these states.

In case, the government went ahead with its decision most of the units would be forced to migrate to other states and the Himachal Government's dream of making the state the largest drug manufacturing state would be torn into shreds.

Chairman of Himachal Drug Manufacturers Association Rakesh Arora, who was also present during the conference, said the excise duty exemption benefited the consumers too as the prices of drugs manufactured in Himachal and Uttarakhand were ten per cent cheaper than in other states.

He said the drug industry was providing employment to large number of people, including illiterate and unskilled people.

The Drug units which have come up in the state after 2003 have raised loans to the tune of Rs 3,000 crore and all these units would become defaulters and 350 pharmaceutical formulation and 1,000 ancillary units would be hit, Mr Arora said.

UNI