Himachal CM to meet PM, Sonia on excise withdrawal issue
Ramesh Shankar, Mumbai

The Central government's move to withdraw excise exemption to contract manufacturers appears to be snowballing into a major political issue with the Himachal Pradesh chief minister Virbhadra Singh is set to take up the matter with Prime Minister Dr Manmohan Singh and Congress president Sonia Gandhi. The CM will also meet Union ministers like P Chidambaram.

It is learnt that the chief minister will push for maintaining the status quo in the matter, at least for some more time. With Assembly elections round the corner in state, the CM does not want to create any situation in the state which may be portrayed as anti-people in the elections by the Opposition parties.

The chief minister's decision to take up the matter with senior leaders comes after a delegation of contract manufacturers in HP and Uttarakhand met the chief minister in Shimla recently. The contract manufacturers, who had recently formed the Federation of Indian Pharmaceutical Entrepreneurs (FIPE) to fight the case unitedly, informed the CM about the repercussions if the government goes back from its promise to the drug manufacturers who had made a huge investment in the state.

FIPE president Rakesh Arora said that the Federation had informed the CM that if the government withdraws excise exemption, it will be a huge setback to Himchal Pradesh's industrialisation as most of the industries will go back to other places which will leave more than 4 lakh local workforce unemployed. The pharmaceutical companies in Himachal are providing direct employment to one lakh local people and give indirect employment to another 3 lakh people, Arora said.

The chief minister's decision to take up the matter with the Prime Minister holds significance as the decision to withdraw excise exemption to contract manufacturers was taken at a meeting held at the Prime Minister's Office (PMO) in January this year. The PMO meeting, attended by senior government officials, had decided to implement the EAC report which had recommended that 'Area-based exemptions should be restricted to manufacturers who manufacture under their own license and not those who undertake contract manufacturing'.

Source: www.pharmabiz.com
23rd July 2007

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