The Confederation of Indian Pharmaceutical Industries (CIPI) is not very keen on the demand for higher abatement while assessing the MRP-based excise duty on drugs. Instead, it has sought an increase in the ceiling of excise duty exemption given to SSIs from the current Rs 1 crore to Rs 3 crore.

A Preferential duty of 8 per cent (instead of the 16% for bigger drug manufacturing firms) for generic drugs and branded generics (subject to a ceiling of Rs 10 crore) is the other demand the small scale drugs manufacturing sector would be asking for from the Central Government, it is learnt.

With the other industry associations like Indian Drugs Manufacturers Association (IDMA) and Organisation of Pharmaceutical Producers of India (OPPI) focusing their energies to lobby for increasing the percentage of abatement, the CIPI move is seen as a tactical one to counter the possible negative fallout. The SSI sector is to be most affected by the Central Government's decision to assess excise duty based on MRP, after an abatement of just 35 per cent.

The meeting convened by the ministry of chemicals and fertilizers on January 24, 2005 to find a solution to the various issues plaguing the pharmaceutical-pricing segment proved to be a platform for the associations to vent their feelings. While IDMA representatives were busy with convincing the C&F ministry officials on the need for a reminder to the finance ministry on the changes in the excise assessment front, the CIPI was keen on increasing the SSI investment limit to Rs 3 crore from Rs 1 crore to build up more capacities to face the competition they are facing from the bigger manufacturers.

According to the participants of the meeting, the ministry officials have assured the industry to send a fresh note to the finance ministry conveying the concerns of the industry with regard to the damage caused by the changes in the excise duty assessment.

It has also taken note of the SSI sector's plea to find ways to counter the stiff competition that they have to face in the coming days.

The meeting was chaired by the chairman of Taskforce on Drugs and Pharmaceuticals of the Planning Commission and had representatives from various associations. Suresh Khare, Prem Godha, Mansh Doshi, D B Modi, Dara Patel, Sandip Nangia, P K Gupta, Lalit Kumar Jain and Subash Malhotra were among the participants.