Maharashtra with its capital city Mumbai as the commercial hub tops the chart of major industrial activity in the country. The story is not different when it comes to pharmaceutical industry, as well. It is true that politically sponsored labour unrest, high labour costs and bureaucratic hassles have taken their toll by forcing many pharma enterprises to shift home to more friendly terrains over the past few years. Yet, the state continues to be the preferred destination for the seasoned and aspiring entrepreneurs.

So what is it that makes this state an attractive vicinity for the industrialists from the pharmaceutical world despite all the setbacks like excessive trade unionism, red-tapism and even underworld terrorism?

Of course there is proximity of a well-developed port, excellent infrastructure, skilled man power, uninterrupted power supply, low pollution levels as advantage Maharashtra. Still, above all these, the state excels itself as a model among the rest in ways more than one.

This state, singularly, is responsible for nearly 40 per cent of production of the country's highly fragmented pharmaceutical industry. There are around 4638 large, medium and small manufacturing units scattered throughout the state. And most of the pharma activities and majority of the centres are concentrated in Mumbai, Thane, Palghar, Nashik, Aurangabad and Pune.

It still leads in formulations business with 3, 767 production facilities. The state comes third in active pharmaceutical ingredients (APIs) manufacturing. Figures show that the pharma industry in Maharashtra is growing at a pace of 10-15 per cent per annum.

In terms of exports, the city of Mumbai exports almost 70 per cent of APIs and about fifty per cent of formulations produced in the country. Lupin, Wockhardt, Cipla, Nicholas Piramal, J B Chemicals are among the leading exporters from Mumbai. No official figures are available on export, experts estimate it has a current growth rate of 15 per cent.

The 36 districts of the state together grabs around 20 per cent of the total retail trade in the country which works up to the tune of Rs 4,000 crore. The Maharashtra State Chemists and Druggists Association (MSCDA) has got the distinction of being the only trade body representing 35, 000 retail pharmacists in the state.

"I'm proud to say MSCDA is one of the oldest and disciplined organization. It is also one among the influential trade bodies in India. And it is the one and only voice to represent the retail trade in the state with no parallel organizations. It serves as a model in this respect," comments J S Shinde, Hon. General Secretary, All India Organisation of Chemists and Druggists (AIOCD), Mumbai.

MSCDA, an affiliate of AIOCD, is noted for its proactive approaches to join hands with industrial associations in dealing with issues relating to trade and public health like the spurious drugs manace. According to Shinde, MSCDA is all geared up to train its retail pharmacists to equip themselves to meet the challenges in the post-GATT era, which is hardly 2 years away.

A well-structured regulatory mechanism is, again, another feature in which the state takes pride of. Maharashtra is the first to adopt integrated approach as regards to both quality of food and drugs. The Food and Drug Administration (FDA), Maharashtra has Commissioner appointed from the Indian Civil Service at the helm of affairs. He is assisted by four Joint Commissioners at the headquarters in Mumbai. District offices are headed by Assistant Commissioners. There are around 159 Drug Inspectors, 265 Food Inspectors and 31 Food Supervisors in the state to carry out the field duties.

FDA has an independent drugs control laboratory with testing capacity of 6000 samples per year. The state regulatory body has set up an intelligence branch to monitor and gather information on spurious and counterfeit drugs. And it claims as a state with the least incidence of spurious drugs. ``I don't say that there's absolutely no instances of spurious drug making in Maharashtra. But the number of cases recorded here is the least. FDA keeps a constant watch and in makes instant intervention on such reports of malpractice,'' explains S W Deshpande, Joint Commissioner (Vigilance), FDA, Maharashtra.

Coming to compliance to the new GMP norms, the state, once again, leads. Compliance rate is very high with most of the madcap companies and some of the small scale firms. Almost 70 per cent of the companies are likely to comply with the revised Schedule M in the coming months, according to Deshpande.

Maharashtra government came strong with its biotech policy during late 2001. Following its policy, state government decided to set up a pharma biotech park at Hinjewadi in Pune with 136-acre area and an Agro biotech park at Jalna with 100-acre area. In its 20-page policy document, the state government has announced a three-point strategy to boost biotech investments in the state. These were creation of a Maharashtra Biotech Board (MBB), Maharashtra Biotech Commission (MBC) and set Enshrined in the Maharashtra Biotech Policy include the tax sops for setting up biotech units in the state.

A lower tax rate under the value-added tax regime, twice the existing floor space index (FSI) for biotech units, exemption from stamp duty and registration fee and 30 per cent of the fixed capital investment are some of the financial incentives and tax benefits to those who set up biotech units in Maharashtra. Under the new policy, biotech units can be set up in all regions of the state and will be eligible for incentives allowed for the state's second least developed regions.

Apart from the octroi levied in metros and big cities, the existing tax regime in the state is more or less on par with other states. The sales tax for bulk drugs and formuations are 4 per cent and 9 per cent respectively. The city of Mumbai levies an octroi of 4.5 per cent for bulk drugs. Formulations are exempted from octroi.

For the last few years a number companies have moved out of Mumbai. Companies like Blue Cross, Indoco, German Remedies (now part of Zydus Cadila), USV, Wockhardt, Cipla have expanded their bases into remote regions of Maharashtra like Patalganga, Kurkum, Taloja etc as these cities offered octroi free environs with a lot of tax sops.

However, a few companies, who shut their operations in the past few years still feel that increased trade-unrest and and lack of political will to initiate industry friendly policies make destination Maharashtra a nightmare. ``There was a time everybody preferred this vicinity. Then the government needn't have to woo the investors. They themselves preferred this place,'' avers an industrialist from Mumbai.

Today things have changed. Excessive, politically motivated trade unionism have already wreaked a havoc resulting in the closure or exodus of many promising companies in the state over the past years, he says.

The next worst thing here is bureaucracy. ``They [the officials] look at the industry with suspicion. Instead of considering them as the partners of growth they look down upon the industrialists as if they were thieves and the are here only to loot ,'' he comments.

Even as bewailing the blemishes left by the trade unrest and policies and politicians who regarded industrialist as worst foes, there still remains a prominent section of the industry which think this charmed state can forego all the burden of the past and recapture its maiden glories.

There are, of course, signs of change. The trade unionists who themselves have started realizing that closure of the company could benefit to none. But can only bring more trouble and hardship. Likewise age-old bureaucrats will also have to give way to new thinking and present day realities.

``Industrialists, today, prefer Bangalore or Hydria or West Bengal to Maharashtra because these states encourage them with tax sops and other benefits. The state of Maharashtra is realizing these facts slowly,'' opines Yogin Majmudar, President, Indian Drugs and Manufacturers Association, Mumbai.

According to him, the state can now forget about luring bulk drug manufacturers and formulation makers as it has already reached the saturation levels. Rather, the policy makers in Maharashtra can now focus on other emerging, non labour-intensive areas like biotech, clinical trials, contract research and the like.

Now that the NRIs, who once left the city are willing to come back. The newer business opportunities are based more on professionalism and skills. So, naturally, it eliminates the chances of trade unionism. If the government understands these trends and work up policies which can attract prospective, it will provide a big opportunity, contents Majmudar.