Baddi region crying out for core sector reform

Dismal road conditions and lack of basic amenities to accommodate the swelling migrant population are threatening the prospects of the Baddi-Barotiwala-Nalagarh region, the country's newly emerged pharmaceutical manufacturing hub in Himachal Pradesh.

The 150 square km area, which accounts for 50-60 per cent of the country's total medicine production for domestic use, may not get fresh investments in the pharmaceutical sector if improvements in infrastructure are not undertaken urgently.

Signalling the decline in the attraction of Baddi, companies like Cipla, Alkem and Cadilla are opting for destinations in north-eastern states, Jammu & Kashmir or Uttaranchal for investment.

Drug majors like Ranbaxy Laboratories Ltd and Aristo Pharmaceuticals Ltd are known to have either deferred or abandoned their Baddi plans. Nicholas Piramal India Ltd and Wockhardt Ltd are among those thinking twice before further capacity expansions in Baddi.

Roads are an absolute necessity, says Sanjay Kumar, general manager, Unichem Laboratories Ltd. "There are no good approach roads to Baddi from the nearest urban bases like Panchkula or Chandigarh. Yet one has to commute this distance every day as Baddi has no hospitals, schools, houses or shopping centres."

Negotiating the huge potholes that mark National Highway 21-A (Pinjore - Baddi route) has become a major health risk with majority of the senior executives complaining of severe back pain. "I have just returned from the hospital after my MRI scan. My colleague is wearing a belt to protect his spine. Thanks to the Pinjore - Baddi road " Anil Arora, Vice President, Nicholas Piramal says.

The investment flow to Baddi, over Rs 2,000 crore in pharmaceutical sector, started in 2003 after the government announced excise free status to hill states for a limited period. Though entire Himachal Pradesh became eligible as a tax haven, Baddi, a non-descript village downhill, was the preferred destination due to its proximity to Chandigarh, 40 kms through the Pinjore-Baddi route.

"The road condition was much better three years ago. We were expecting the infrastructure to improve further. However, following the spurt in industrial development, whatever infrastructure Baddi had cracked under pressure. The government, which was not prepared for such a swift pace in development, could do little." Arora said.

The 235-odd drug units alone transport around 400 truckloads of finished medicines and raw materials in and out of BBN region every day. The Pinjore - Baddi road and the internal roads within the township, which was not built to withstand such heavy loads, will have to be completely redeveloped to find a lasting solution to the road problem. While the repair works at the Himachal Pradesh stretch of the road has started, Pinjore-Baddi stretch that comes in Haryana are yet to begin. The delay has led BBN Industries Association (BBNIA), the representative body with over 350 members, to approach the governments of Himachal Pradesh, Haryana and the Centre. "BBNIA is also planning to file a public interest litigation in Haryana High Court", Arun Rawat, general secretary BBNIA said.

While senior executives brave health risks to commute Chandigarh-Baddi path, majority of the entry and middle level employees have no other option but to stay back in the township.

"The population has tripled from 50,000 to 1,50,000 in last four years in BBN region. However, we are yet to see corresponding development in housing infrastructure. Rentals are skyrocketing in Baddi", Arun Rawat, general secretary, said.

The state government is hopeful of addressing the infrastructure bottlenecks soon. But how soon, asks Arora.

"The fiscal incentives will come to an end in 2010. Which means, whatever investment that could be attracted, should be attracted now. Any plans to have proper infrastructure on a long term basis will not work now. Government should under stand that this kind of opportunity will never come to the state. They have to race against time and prepare the base for more investments," he said.