The association of pharmaceutical manufacturers and entrepreneurs in Haryana (affiliated to the SME Pharma Industries Confederation-SPIC) has asked the members of the Haryana Assembly, cutting across party lines, to pass a resolution in the state Assembly asking central government not to extend the central excise package to the neighbouring states of Himachal Pradesh and Uttarakhand under any circumstances.

In an SOS to Haryana chief minister Bhupinder Singh Hooda, all the ministers, leader of opposition and all the MLAs in the state, the association, representing mostly SSIs, said that if the unanimous appeal of Haryana Assembly is not heeded by the central government, the Haryana government should retaliate by slapping a special punitive entry tax of 10 per cent on all goods being sent into Haryana by excise free units of these states.

The Haryana pharma industry's knee-jerk action in this regard comes in the wake of news reports that union commerce and industry minister Anand Sharma, who hails from Himachal Pradesh, has written a letter to Prime Minister Dr Manmohan Singh for extending the excise holiday of the hilly states by at least for 3 years, that is up to 2013.

The tax sop announced by the Vajpayee-led central government to these hilly states to boost their sagging industrial development expires on March 31, 2010.

Asking the central government to levy central excise on contract manufacturing in excise free zones so that thousands of traders and doctors who are sourcing medicines with high MRP from these states are checked and the government gets some revenue, the association said that if the government finally decides to give extension of tax exemption to these hilly states, the same facility should be extended to Haryana also as was demanded by Punjab government for itself.

The association in its letter said that the central excise disparity between neighbouring excise free zones and the rest of India since 2003 has severely crippled industry in the adjoining states like Haryana and no relief has been forthcoming thus far since it has never been on active agenda of any political party in Haryana.

It is strange that such an important issue had no takers among principal parties in the last Haryana Assembley elections. At stake was not just revenue loss to the state but jobs as well which were surrendered to Himachal Pradesh and Uttarakhand as industry after industry abandoned Haryana in search of highly ill-conceived area specific excise free zones policy incentives.

On the other hand, HP Assembly unanimously passed a resolution in the last-winter session urging the central government to extend the excise holiday by 10 years, that is up to 2020.