Without proper support and incentive schemes exclusively for the development of small scale pharma industry in Andhra Pradesh, it will be very difficult for these SSI units to survive in the state. Only very few companies can survive in the present circumstances prevailing in the state, said K Tata Rao, secretary of the Organisation of Pharmaceutical Manufacturers Association (OPMA), Andhra Pradesh.
“The government should have a policy for encouraging the SSI units. Certain states in India have such policies where the industry is progressing. Whereas in AP, there is no such policy, so all the units are sinking. Here the government is supporting only the MNCs and big players. No incentives are provided for the small scale units. Even the government has no accurate data about the number of manufacturing units in the SSI sector,” Rao told Pharmabiz.
The small scale manufacturers in the state regret that the government was not purchasing even a small quantity of drug from the SSI units. The purchase orders are given only to the big players. As long as this discrimination from the government continues, the companies under this category cannot develop. The government is forgetting the fact that these SSI units are manufacturing for the MNCs, they said.
According to them, if the units are to survive they should be brought out of the control of DPCO. “We want the government of India to keep us away from DPCO. The present system is actually killing the industry. We want to restore the status that existed before 1995,” said S Chakravarthi, vice-president of OPMA.
Very few units are engaged in export business. In the SSI sector, below 12 units have WHO-GMP facilities. No small scale unit is fully engaged in export business. The companies which are marketing their own products and those having facilities for contract manufacturing under loan-licensing system and operating on P to P basis are the units barely surviving. If the units are given financial support, interest subsidy, capital subsidy and market support, they will survive to an extent. Majority of these units are having Rs.1-5 crore turn over only, Chakravarthi added.
Besides the incentive packages, the pharma industry in AP, both big and small, need special protection for their establishments. Rao said that the political turmoil that has been continuing in the state for years becomes a threat to the industry. So the industry requires protection from agitations and bandhs. There is no special security for pharma companies. Government should provide security to the pharma companies, he said.
OPMA has requested the government to bring the formulation units under green category, but there is no positive responsive from the state government side, he further complained.
Besides seeking cooperation from the government, OPMA wants the government of Andhra Pradesh to take steps to bring back those units which have migrated to Himachal Pradesh for availing the benefit of excise duty exemption. Because of excise duty exemption in HP, a large number of companies from Andhra have migrated to that state and also to Uttaranchal and Sikkim. Rao praised the previous government by saying that it had prevented further erosion of companies to Himachal Pradesh and to other excise free zones.
Likewise, the industry also needs a permanent solution for the crucial problem of environmental hazards which is often raised as a weapon against the industry by environmental activists and pollution control board. Another demand is for more clusters for pharma sector. While there are 20 pharma clusters in Gujarat, in AP there are only 7.