Prime Minister Manmohan Singh is to convene a meeting of all related central ministries to finalise the Pharma Policy 2006 without further delay. The PM's intervention has become necessary after the Finance Ministry refused to consider any of the fiscal proposals made by the Chemicals Ministry in the recent Union Budget. The Policy can be of some significance only if the slew of fiscal measures proposed by the Chemicals Ministry is taken care of.

According to official sources, the Chemicals Ministry is to have an interaction with the industry representatives before the PM's meeting. The Chemicals Minister Ram Vilas Paswan had convened a meeting last week, where it was decided to put forth a fresh set of recommendations for reconsideration before the Finance Ministry. The major recommendation being pursued by the Chemicals Ministry is the reduction of excise duty for pharmaceutical products from 16% to 8%. It also wants all contract manufacturing units (loan licensees) located in excise exempt areas to be excluded from tax benefits to put an end to the continuing woes of the SME drug companies in other parts of the country. Increase in the exemption limit of turnover for small scale units from the present level to Rs 5 crore is another recommendation, it is learnt.

The government had proposed the reduction of the customs duty on 10 anti-AIDS and 14 anti-cancer drugs to five per cent in the Union Budget 2006-07. The chemicals ministry wants this to be expanded to a much larger extent by exempting the all Anti-AIDS and anti-Cancer formulations, both bulk and formulations from all types of central taxes. The ministry list includes 27 anti AIDS and 69 anti Cancer drugs.

The chemicals ministry is also looking for providing financial assistance to set up at least three model pharmaceutical research and education centres on the lines of National Institute of Pharmaceutical Education and Research (NIPER) and getting all clinical trial services exempted from central taxes.

The PM is likely to sort out the issues in the presence of the ministers of Finance, Chemicals & Fertilizers and Health.