The recent move by some of the state Pollution Control Boards to insist on clearance of all expansions and modernization projects of pharmaceutical companies by the Central Pollution Control Board is causing a lot of distress amongst the drug units in the country. The state governments of Haryana, Gujarat and Andhra Pradesh, two major drug producing states, have already started enforcing this rule. It is possible that other states having large number of pharmaceutical units may also start insisting on clearance by the CPCB. The decision of the state PCBs is based on an Environmental Impact Assessment notification dated January 27, 1994. The notification states that expansion and modernisation of any activity causing a rise in the pollution load from existing level or starting of a new project listed in Schedule 1 to this notification shall not be undertaken in any part of India unless environmental clearance is accorded by the Central government as per the procedures specified in the notification. And bulk drugs and pharmaceuticals is included in the Schedule 1 of this notification as item No 8. The notification, however, exempts units producing any item reserved for small scale sector with investment less than Rs.1 crore from the stipulation. Exemption has been also granted to manufacturers of certain specified drugs. According to industry circles, these concessions are not actually of any help and the entire industry is subjected to new pollution norms.

A Central clearance from the CPCB could mean some delay in the execution of expansions or new projects. A provision in the notification stating that the projects have to be cleared only after a public hearing involving NGOs can make the whole process a bit more difficult for the pharma companies. It is possible that NGOs, sometimes, take unreasonable positions with regard to clearance of industrial projects. But, in this case, a number of other responsible persons are also involved in public hearing. As per the notification, all persons including residents, environmental groups and others likely to be affected, can participate in the public hearing. And the hearing should be completed within a period of six months. The objective behind this stipulation is to bring some control to the growing environmental threat the industrial units, particularly the chemical based industries, are causing to the residential locations. Such a position by the government is indeed justifiable. In fact, public accountability is something what is terribly lacking in many spheres of Indian business. It is possible that the new norms are going to be tough to comply with for small scale sector because of their poor financial conditions. Then, it will be better if only financially sound entrepreneurs get into bulk drug or intermediate manufacturing activity henceforth. There is no dearth of other business opportunities for the small entrepreneurs in India today.