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Govt plans exclusive pharma SEZ

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HYDERABAD: In an effort to check the flight of pharma investment to some northern states to gain tax benefits, the state government is planning to develop an exclusive pharma special economic zone (SEZ) at Jadcherla in Mahabubnagar district.

The SEZ will be planned in about 1,000 acres, though the initial allotment will be in about 300 acres.

“The response for the entire plan has been very good. Two industry majors — Aurobindo and Hetero Drugs — have already agreed to set up their units in the proposed SEZ in about 240 acres. Their combined investment would be to the tune of Rs 200 crore,” an industry source said.

While the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) has taken up the responsibility of the project, the approvals from the Centre are yet to come.

It is expected to take another five months before the approvals are obtained and the necessary master plan is prepared. The proposed SEZ would be exclusively meant for formulation units and focus on low-pollution levels.

“If it is for bulk drugs, there are bound to be pollution issues coming up. The 1,000-acre layout would be focusing on green units, and formulations too fall in this category,” the source said.

The proposed zone, according to sources, is being set up with the Centre not responding to several requests from the state government and the industry to remove the tax anomalies between some northern states like Himachal Pradesh and Uttaranchal, and rest of the country.

“About 250 formulations units are estimated to have gone to these new locations with an intention of benefiting from these tax incentives. The government and the industry bodies have been working on the issue without any positive results,” the source said.

From Andhra Pradesh alone, about 40 pharma companies have gone on to set up their units in these states, and about 50-60 firms — mostly small and medium — are waiting in the wings.

The pharma companies, who have been moving to these northern states, are getting advantage of excise duty exemption for over 10 years from the date of first invoice, and total waiver of sales tax and income tax.

These exemptions are accounted for 25-30% of total production cost. 

Courtesy: Times of India

Date: 19 Sep 2006



Written by dilkibaatein

April 19, 2008 at 7:06 am

Posted in News Archive

Tagged with ,

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