• 6 January 2006
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Industry's Wish List to Chidambaram

It may be recalled that PC Chidambaram, the union finance mister, in the last Union Budget had acceded to almost all the demands of the industry.

  • Five percent Customs Duty on nine specified machin ery used in biotech.

  • A Rs 150 crore R&D corpus fund for the industry.

  • The concession of 150 percent weighted average tax deduction was extended till 2010.

  • An initial provision of Rs 50 crore for operationalizing the creation of a National Fund for Strategic Agricultural Research.

  • IISc provided with an additional sum of Rs 100 crore as a grant to make it a world-class institution.

  • Established a SME Growth Fund with a corpus of Rs 500 crore by Small Industries and Development Bank of India (SIDBI) to provide pharma, biotech, and IT SMEs equity support.

During third BioSpectrum Awards Nite 2005, a panel discussion was organized on the theme "Biotechnology Industry's demands to the Finance Minister for the Budget 2006." The panel discussion was organized to understand what the industry needs this time around from the finance minister. The panel discussion in December 2005, moderated by Sarath Naru, CEO, APIDC-VC and Narayanan Suresh, Editor, BioSpectrum, saw participation from members spanning all the sections of this sector. Kiran Mazumdar-Shaw, CMD, Biocon, and president Association of Biotechnology Led Enterprises (ABLE), Dr K VijayRaghavan, director, NCBS, Deepanwita Chattopadhyay, CEO, ICICI Knowledge Park, Prof. AS Kolaskar, vice-chancellor, University of Pune, Dr KK Narayanan, CMD, Metahelix, Dr Shama Bhat, CMD, Bhat Biotech, Dr SD Ravetkar, senior director, Serum Institute of India, and Dr Mittur N Jagadish, director, Monsanto Research Centre, discussed the agenda for the union finance minister.

"The software industry used to go to the government with a list and most of the demands would be accepted and that is one of the reasons why the software industry grew in the last decade," Suresh pointed out and hoped that with this kind of a structured exercise to get inputs from the industry, the industry's wish list would find place in Budget 2006.

Sarath Naru requested the panelists to prioritize as to what the industry wants and put forth their specific demands and make the government acquiesce to these demands. "We should also try to figure out as to how would these specific demands to the government make the Indian biotech more competitive globally," he added.

Dr SD Ravetkar,
senior director, Serum Institute of India
Kiran Mazumdar-Shaw, CMD, Biocon, and president ABLE
Dr K VijayRaghavan,
director, NCBS,
Prof. AS Kolaskar,
vice-chancellor, University of Pune
Dr KK Narayanan, CMD, Metahelix Dr Mittur N Jagadish, director, Monsanto Research Centre
Dr Shama Bhat, CMD, Bhat Biotech Deepanwita Chattopadhyay, CEO, ICICI Knowledge Park

SEZ status and single window clearance system

Dr SD Ravetkar, senior director, Serum Institute of India, said that the finance minister has taken a lot of proactive steps to boost all industries. He said he had in mind two specific demands-Special Economic Zone (SEZ) status to all biotech companies and single window clearance system. "SEZs are considered growth angels for any economy. The requirement for SEZs in our country for biotech should be sector-specific and the area limit could be reduced to 25 acres or even less," he suggested. "This will definitely make Indian biotech more competitive globally," he added. Dr Ravetkar said the single window clearance needs to come in force very soon.

Acres of land should not be the basis on which a SEZ status should be given. "The more important aspects are about the investments you are putting into these SEZs. It is about employment generation of these SEZs. That is what is very critical about giving SEZ status to a company, Kiran Mazumdar-Shaw observed, favoring SEZ status to a lot of biotech companies.

Make all biotech drugs life saving

Stressing on having a budgetary allocation in a very specific manner, Shaw said that there was a need to "launch a drive to see whether we can make all biotech drugs life-saving. Put it in the life-saving category. This is a very important message and request to make to the finance minister. Biotech drugs are addressing unmet medical needs. These are life saving drugs, whether they are vaccines, recombinant therapeutics or antibodies. The raw materials used for the production of these drugs also need to be duty-free. It makes no sense to allow finished formulations as duty-free."

Financial incentives to promote industry-academia partnerships

Dr K VijayRaghavan lamented that academics and the collaboration with the industry bordered on the negligible. He felt that the government should give financial incentives to promote industry-academia partnerships. "The government should also evolve mechanisms by which academics can get salary support because of the interaction with the industry far more easily. The consultancy rules and salary enhancement rules should be much more liberal. But there should be mechanisms by which they can do sabbaticals in industry and come back and similarly have mechanisms by which people from the industry can do sabbaticals in academics areas and go back. Unless that happens, the biotech industry will forever be a 'me-too' industry of what is happening in the West and innovation, which is so possible here, will only be something which we keep saying it is possible and we can be as good as anyone else but nothing will happen," he stated.

Lauding the government initiative of granting a Rs 100-crore fund to the IISc, Dr VijayRaghavan said that the government should choose a top institute every year and allot funds to enable the institute to venture into newer things. However, he said that the mechanism of disbursing funds should be expeditious so as to ensure that the funds reach the beneficiary without any delays.

He felt that the government must provide handsome salaries and other perks in academics so as to attract the best minds. "We need to have mechanisms by which the salary support that academics get can be enhanced with responsibility," he said.

Government should not micromanage grants

Pointing out that there was actually a rather stringent audit of grants-both block grants and research grants, Dr VijayRaghavan said that the government should not micromanage grants. It should pay more attention to the outcome rather than checking ways in which the grants were utilized. The government should have a general overview by an agency or a principal investigator to ensure that grants were not being misused, he felt. "The finance ministry should act as an aid towards good spending rather than a road block," he said.

Biotech education as an industry

Stating that the education sector was growing at the rate of about 20-22 percent, Prof. Ashok Kolaskar said that education had to be looked at as a completely new industry. "The major issue facing the industry today is lack of quality human resources. And that if you want to produce, it would require biotechnology education to be defined as an industry," he said.

Stressing on the point that education needs to be in the free zone, he said the education should be away from the clutches of AICTE, UGC and other bodies as "they put in so much of restrictions in giving training in terms of only the infrastructure rather than the quality. And we will have to bring in the quality parameters there to the extent possible. Once we do that, I'm sure we will be able to bring in quality human resources," Prof Kolaskar said.

"Another aspect is that we will have to bring in more internalization of the education system itself so that the human resource that we create will be of good quality. The number of personnel required at various levels is very few. Many colleges have just started training activities and they are not up to the mark. We need to have proper institutes where we can give training and use basically the virtual realities and virtual classrooms and broadband connectivity to this," the Pune University vice-chancellor said.

liberal linkages with reputed institutions

Speaking about academic linkages and budget allocations, the Biocon chief voiced concern over decontrolling the whole educational process. The controls have at least some basic standards. "When you let go the controls, a lot of people are going to just capitalize on this opportunity in an irresponsible manner. However, international linkages with well-known universities and institutions are extremely important. This has to be enabled and has to be made liberal. At a certain investment level, these sort of linkages should be almost automatic. I think Johns Hopkins, Stanford or any of these well-known institutes should be freely allowed to form linkages with our academic institutes making sure that they do invest in setting up research linkages and educational linkages," Shaw said

Develop biomaterials sector

Prof. Kolaskar pointed to another area where the industry needs support from the finance minister. "More money is needed in biomaterials area. Right now we are talking only about health agriculture and to some extent, environment. But what we require in order to take the quantum jump will be to try and develop the biomaterial industry and that is what will help us through."

"Again here we have to reduce the number of steps in which we have to go and more amount of money needs to be put in the industry rather than giving the sops towards taxes. In order to provide infrastructure for this industry, the government must take the steps and that infrastructure should be at the lowest cost," he urged.

Duty waivers and budgetary allocation for biotech parks

Deepanwita Chattopadhyay pointed out that when companies come to biotech parks or knowledge parks, they do not automatically get import duty waivers on equipment and consumables. "These are R&D units and it would be very good if the finance ministry can automatically grant free import duty on consumables as well as equipment," she said.

Another significant demand that she put forth was allocation of a budget for facilities like accredited instrumentation facilities in various cities and also creating a national license for some of the very important databases which the industries can share. "Now academic institutions have various consortiums but the industries do not have any consortium. If a national license can be got, that would be very helpful," she stated.

Central subsidy to promote transgenic crops

Emphasizing on the need to make the agriculture industry globally competitive, Dr KK Narayanan said that the sure way of doing that was by promoting the adoption of technology in Indian agriculture. He was of the opinion that the government should provide central subsidy funds to promote transgenic crops in the country. He also felt that the Protection of Plant Varieties and Farmers Rights Act should be implemented.

Allow new technologies

Dr Mittur N Jagadish said there are many challenges in agriculture and particularly in countries like India. And agri biotech had tried to contribute to providing solutions to many of these
challenges in aid of agriculture. "Bt cotton is the only technology available in India and since the time it was introduced in 2002, it has grown from 70,000 acres to over 3 billion acres in 2005. So there is plenty of potential to indicate that technology is successful. Farmers have adopted and the country has got further potential to proliferate this technology or bring in new technologies. One such technology would be herbicide tolerant technology which would bring a lot of benefits to the farmers," he added.

Dr Mittur also urged the government to check the proliferation of spurious seed manufacturers.

Biomaterials be made duty-free and NOCs abolished

Dr Shama Bhat urged that biomaterials should be made duty-free. With this duty exemption on raw materials, the Indian companies could compete with their foreign competitors like China and Korea, which were selling their products below the cost. He also urged the government to abolish the requirement of licensing/obtaining NOCs to import raw materials. Another major demand was that the government should allow the diagnostics industry to import the raw materials through major airports like Bangalore and other cities.

Invest in upgrading regulatory systems

Kiran Mazumdar-Shaw said the need of the hour is to implement the new regulatory pathways. "For that we need to invest in upgrading our regulatory systems and regulatory infrastructure. There is also a need to create a budget for auditing and accreditation activities. This is going to be very important. There are hardly few labs that can qualify to be a GLP lab. There are only a handful of people who can claim to do high quality clinical research." A lot of other initiatives have taken root. But many of these really need to be addressed in a very focused way. "We need to have much more focused and a very crystallized idea of how we want to spend the money. The biggest weakness we have in our system is we do not know exactly how we want to spend that money. That will bring about the accountability and the transparency we all want," she concluded.

A BioSpectrum Report

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