The pharmaceutical fraternity of Madhya Pradesh, under the banner of various state level trade and industry organisations, waged a massive protest march in Indore on January 24, to protest against the changes in the assessment of excise duty on drugs effected by the Central Government. The medical shops across the state remained closed till 1.30 pm on account of the march, it is learnt.

According to the organisors, about 10,000 persons who are directly affected by the changes in the central excise assessment norms participated in the march. The MP Pharmaceutical Manufacturers Organisation and MP Small Scale Drug Manufacturers Association have also submitted joint representations to State and Central Governments seeking withdrawal of the notification that made excise assessment on drugs based on its MRP and not ex-factory price.

The organisors informed that the members of MP chemists and druggists association, manufacturing and Quality Analysis chemists from MP-based pharmaceutical companies, ayurvedic manufacturers and employees of all small-scale drug companies of the state participated in the protest march.

The representation submitted by the protestors to the union finance minister stated that the government move would adversely affect pharma industry across the India, especially the SSI, hurt the health care delivery in remote areas and make the medical treatment costly and beyond the reach of poor Indian people.

"The multi national and the bigger national pharma manufacturers who are giving only stipulated trade margins to retail and wholesale trade penetrate at best up to district level, leaving 70 per cent of Indian rural population uncovered with the modern medicare, who depends solely on SSI Sector for their medicine requirement," the representation noted.

"The impact of central excise duty on MRP can optimistically be reduced of the MRP for medicine, but this will certainly restrict the penetration of medicine to rural market, resulting into over supply in urban markets, heating up the competition. This situation will then lead to cut throat competition, poor profitability and financial sickness in the pharma sector. It is needless to say that the heat will be faced much more by the small-scale industry and enterprises across the country and will damage the entrepreneur spirit and encourage the unemployment. Alternatively, the rural demand can lead to increase in the MRP, with the result that medical treatment will become costlier for poor rural public," they warned.

The associations wanted the Central Government to revise the current NIL excise limit for SSI from Rs 1 crore to Rs 3 crore, and excise eligible limit for SSI from Rs 3 crore to Rs 9 crore. "The abatement of 35 per cent may be increased to 70 per cent. In this regard, it may please be noted that abatement on health hazard product like gutka is 50 per cent. The central excise duty on the medicine may please be revised to 8 per cent from the current level of 16 per cent," they suggested.

The associations also pointed out that the big pharmaceutical companies will shift their manufacturing bases to tax-free locations in Himachal Pradesh (Badi), J&K and Uttranchal (Hilly Region) and will reap rich reward for their investment, at the cost of government losing revenue. "It is certain that the tax benefit will not be passed on to the consumer. Thus, it is against the public interest at large. Then the purpose of any tax concession is for attracting new investment and creation of additional manufacturing facilities but in this case it is only shifting of existing manufacturing to new location and while doing so the existing manufacturing facilities are scrapped, which is a loss to our nation. This tax benefit will adversely hurt the existing industries especially small-scale units and retard the fresh investment to other areas. This will lead to wide spread industrial sickness and economical disparity between the states," the representation said.

The associations are also planning to move the court seeking redressal of their problems.