Pharmaceutical companies rushing to set up their new manufacturing facilities in Himachal Pradesh will have to face a deadline now. Three years from now, the attractive tax exemptions offered to the companies coming up in the states of Himachal Pradesh and Uttaranchal may cease to exist. Enough hints were given by the Union Finance Minister in his budget speech when he said that the exemptions enjoyed by the units coming up in the states of Sikkim, Uttaranchal and Himachal Pradesh will be limited to units set up or expanded on or before March 31, 2007. However, the area specific exemptions granted to Jammu & Kashmir and North Eastern States are going to continue.

No wonder, if J & K replaces Baddi, HP, in a couple of years when it comes to the expansion interests of pharmaceutical companies.

The Finance Minister has, pending a detailed examinations of the incentives required to promote industrial development in the state, extended the deadline for 100 per cent tax exemption enjoyed by new industrial units in J&K from March 31, 2004 to March 31, 2005.

He also said that the companies carrying out scientific research and development and approved by the Department of Scientific and Industrial Research before April 1, 2004 are entitled to 100 per cent deduction of profits for 10 years. On the request of the Department of Bio-Technology and pending a detailed examination, he proposed to extend the terminal date to March 31, 2005.

The minister also announced the plans for a new trade policy for special economic Zones. Realising the importance of special fiscal and regulatory regime, the Commerce Minister is to shortly introduce a Bill for regulating Special Economic Zones, a significant milestone in the quest to become a major hub for manufacturing and exports.