Pharma industry resents Himachal CM's visit

The special package of incentives offered by the Centre for industries in Himachal Pradesh, Uttaranchal and Jammu and Kashmir has become a subject of controversy and is increasingly being questioned by other states, particularly by Andhra Pradesh.

In this context, the visit of Himachal Pradesh chief minister Virabhadra Singh to Hyderabad on Monday to attract investors from southern India evoked a strong reaction from the Organisation of Pharmaceutical Manufacturers.

Vice-president of the organisation V S Chakravarthy said that Singh "is in town to take away our biotech starters. He has already robbed us of our chemical, pharmaceutical and other industries. The next on his shopping list will be our IT companies."

In a written statement sent to Business Standard, Chakravarthy claimed that a number of local entrepreneurs have either shifted or are in the process of shifting their industries from Andhra Pradesh to Himachal Pradesh, Uttaranchal and Jammu and Kashmir on account of the excise duty and sales tax exemptions offered by the three states.

Virabhadra Singh, however, denied that industrialists were shifting their units to his state to avail of the tax and duty exemptions.

"Himachal has become a destination only for new industries or the expansion projects of the existing industries and no major industry has relocated their existing units to our state so far," he said.

Singh said it is the policy of the Central government to develop backward states like Himachal by offering incentives to woo prospective entrepreneurs to set up industrial units.

"In fact, states like HP are late comers. After India's Independence, major investments have gone into only bigger states".

Nevertheless, Singh said that he has no objection if the Centre offered the same package of incentives for industry in other states. The incentives include exemption of central excise, complete waiver of sales tax and income tax for a period of 10 years for new industries.

Incidentally, Andhra Pradesh chief minister Y S Rajasekhara Reddy has written a letter to Prime Minister Manmohan Singh requesting him to consider either stopping the fiscal incentives being offered to Himachal and other states or alternatively offer the same incentives to the most backward district in each of the three regions "� Telangana, Rayalseema and coastal Andhra in the state.

Reddy stated that more than 150 pharma units from the state may shift base to duty-free states like Himachal.

"These include even prestigious companies like Dr Reddy's," he said. The industrial policy of the Centre, he contended, has "become counter productive."

Efforts to contact G Vivekanand, vice-chairman of the Confederation of Indian Industry (Andhra Pradesh, who presided over the Monday's interactive meeting of Virabhadra Singh with industry, proved futile.

The Himachal government has teamed up with the CII to hold a series of roadshows in Hyderabad, Chennai and Bangalore.