The Confederation of India Pharma Industry (CIPI) has urged the Prime Minister and the Finance Minister to reconsider the decision. The CIPI claims the notification has come like the proverbial bolt from the blue leaving everyone stunned in the industry, who are already facing a financial crunch due to implementation of new schedule “M”.

Recognising the importance of small-scale industry, the Government of India has granted exemption from excise duty upto turnover of Rs 1 crore, but the new notification will reduce the limit considerably and defeat the purpose of exemption. The CIPI alleged that the notification is neither revenue friendly nor consumer friendly. The conclusion is based on the fact that if the notification continues to be in force, the small and medium scale industry which contribute about 55 per cent of medicine production in the country by way of volume and 30 per cent by value shall have no other choice than migrate to tax-free zones like Himachal Pradesh, Uttaranchal, Jammu & Kashmir or to close their units permanently. In both cases a capital investment of Rs 6,000 crore is likely to go in drain apart from making almost 20 lakh jobless. In case these units wish to continue at there present locations, they have no other choice but to increase the MRP by 20 per cent.

But this is not as easy as it seems to be, goods of SSI shall become incompetitive if excise burden is passed to the consumer” says Mr V.D. Gupta, owner of Stadchem of India, Faridabad.

By eliminating small-scale pharma industry the sales of Rs 9,000 crore shall go to multinational companies who will further manifold this,” fears Mr Vipul Ghai of Biologics & Psychotropics, Faridabad.

The Organisation of Pharmaceutical Producers of India (OPPI) has also appealed the government to reconsider this decision.