As many as 1000 pharmaceutical units have either migrated or shut down in Maharashtra in the last few years due to unfavourable business conditions in the last few years, according to industry sources. If the preferred locations for the units abandoning Maharashtra were Vapi and other border places of Gujarat, the industrial estates in Goa and Hyderabad, earlier, the excise free zones of Himachal Pradesh, Uttaranchal and J&K have become the most preferred destinations since January, last year.

According to the All India Small Scale Drugs Manufacturers Association (AISDMA), labour and trade union problems, increase in licence fees on products with no relevance to other states, increased infrastructure expenses, sales tax structure and octroi, rigid postures of the state FDA in comparison other states including approval of new products etc. were some of the major reasons, apart from the main Schedule M and MRP based excise issues, that fuelled the closure or migration of pharma units from the state.

As per the statistics from the State FDA, the number of units in Mumbai has decreased by 50 per cent within the last 3 to 5 years. If there were 2436 units in the state, including 296 in Mumbai during the 1996-1997 period, this sharply came down to 1799 (177 in Mumbai) during the 2003-04 period. Showing a gradual declining trend over the years, the number of units reduced to 2298 in 1997-98, 1845 in 1998-99, 1675 in 2001-02 and 1678 in 2002-03. There were about 300 units in Mumbai until 2000-01, and it reduced to 180 during the 2001-03 periods and to 177 in 2004 period, as per the official data.

"We expect that another 30% of the units in the state will migrate within the next six to 12 months. The MNC's as well as big Indian companies are taking away the skilled labour from Maharashtra to the excise free zones. Most of the skilled manpower to excise free zones is mostly from Maharashtra, thus depleting the state further. Maharashtra will be the most affected state loosing its total identity of strength in pharmaceutical industry to practically a last position in the country in near future" says S R Vaidya, president, AISDMA.

Sources cite that Maharashtra, which produced about 80 percent of the pharmaceutical produce a decades ago, has now slipped its production to about 25 to 35 percent of the national production, including those for exports. About 3.5 lakh skilled and semi skilled workers are associated with the state industry, besides workers indirectly employed in many ancillary and service industries like printing and packaging industry.