Indian Drug Manufacturers Association (IDMA) has urged the government to abolish octroi in the state as it will act as the best incentive to boost pharma trade in Maharashtra. According to Daara Patel, secretary general, IDMA, Maharashtra is reputedly the only state in India where various cities levy octroi duty on various goods, with the Mumbai Municipality imposing octroi duty between 5.5 to 7 per cent.
Though octroi has been exempted on life saving medicines and equipments, it is still imposed on other medicines which has resulted in the rise of cost of the vital medicines which in turn is forcing many companies to shift their base from Maharashtra to other states.
Maharashtra has a clear edge on all infrastructural requirements with Mumbai, the capital of Maharashtra. It is also a port of choice to many industries, especially pharma. Besides, good road and rail connectivity, many airports, probably the best providers of electricity, and a thriving pharma industry with many manufacturing units and clusters, SPZ etc all add to the importance of Maharashtra as a destination of choice. The State also has a wide network of retail chemists. It is estimated that all pharma companies have a presence one way or the other in the state.
However Patel warns that all this may change if the government does not take come concrete steps in regard to the octroi issue. He informs that due to the octroi in the state many of the large pharma companies have closed down their units in state and are relocating themselves to other states like Uttarakhand, Gujarat, Andhra Pradesh, Himachal Pradesh, etc. If the government does not support these struggling units by withdrawing the additional burden of octroi duty they will also be forced to shut down their units and shift to other states.
He informs that nearly 40 per cent of drugs and pharma products in India are manufactured in Maharashtra. The state, especially Mumbai is the headquarters of about 80 per cent of all leading Indian Pharma companies. Many companies like J B Chemicals, Blue Cross Labs, Indoco Remedies, Zydus Cadila, USV, Ajanta Pharma, Wockhardt, Cipla have their units in various regions of Maharashtra. Reliance Life Sciences, Alcon Biosciences, RPG Life Sciences are some of the leading biotech producers in the state whereas there are about 4,000 large, medium and small units in the state with manufacturing units operating from Mumbai, Thane, Palghar, Patalganga, Nashik, Sinnar, Aurangabad, Pune, Nagpur, Taloja, etc. Patel says, “In order to retain these companies within the state and attract new ones, it is essential that the state government abolish the octroi in the state.”