With the deadline for the expiry of tax exemption just 10 months away, the pharma units in the two hot destinations of Uttaranchal and Baddi in Himachal Pradesh are pinning their hopes on the new government for an extension, even as some units are planning leasing out options.

As deadline for the exemption is slated to end on March 31, 2010, the units under the umbrella of Federation of Pharma Entrepreneurs (FOPE) are waiting for the next government to come into power to move and lobby for extension as the regions have turned hot spots for pharma already, FOPE general secretary B R Sikri said.

"Of course, the cut in excise duty sometime back to 4 per cent had some impact on the region. Those companies in the manufacturing of some products like Betalactum where margin was so less have started producing the same in their facilities in non-excise free zones already," he said.

Besides, there are a number of companies who are looking to lease out their facilities and waiting for clients instead of carrying ahead contract manufacturing with the time running out and profit margins dwindling. As only ten months left, no company is interested in setting up new units in the region, he said, adding that the peak of activities like influx and exodus of companies have stemmed now.

Referring to the regulatory environment, he said the companies are better placed now with the opening of drug controller office in Baddi region as they need not to go to Shimla for all administrative purposes. Besides, he also welcomed the move by the CDSCO to open a zonal office in Chandigarh to cater to the states of Himachal Pradesh, Uttaranachal in special along with Punjab and Haryana.

Though the units in the region are still having fingers crossed on the extension of tax benefits, the general feeling among them is that the BJP-led NDA, if comes into power, is likely to extend it for another three years, according to some industry observers.