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Karnataka government gives a push to pharmaceutical business

Kiran Mazumdar-ShawBANGALORE: The Karnataka government on Wednesday announced a pharmaceutical policy that seeks to develop the state as an innovation hub by creating pharmaceutical parks and leveraging its academic, industry and R&D ecosystem. It is perhaps the first pharma policy by any state government in India.

The policy envisages establishing pharmaceutical parks across the state on a PPP model equipped with common effluent treatment plants, cold storage and captive power plants. To set up these parks, players can seek equity contribution to the extent of 26% from Karnataka State Industrial Infrastructure Development Corporation (KSIIDC), KIADB, and the infrastructure development department (IDD).

Commenting on the policy, Biocon CMD Kiran Mazumdar-Shaw said, “The policy is modeled on the lines of the state IT/BT policy to accelerate pharmaceutical business in the state with a focus on R&D, intellectual property and clinical trials.” . The state government will also establish a VC fund with a corpus of Rs 50 crore with 26% contribution from the government to promote investments in the sector. To bridge the skill gap, the government will provide a monthly stipend of Rs 10,000 for candidates sponsored by the industry or those in finishing schools.

To promote pharma exports, SEZs would be encouraged as part of the prevailing SEZ policy of Karnataka. The state currently contributes 10% to the Indian pharmaceutical export revenues. The state hosts over 230 pharma and biotech companies and these achieved a turnover of Rs 6,500 crore in 2010-11. The sector employs 20,000 people directly and 30,000 people indirectly.

Karnataka health and family welfare minister Aravind Limbavali said Bangalore needed to be decongested and asked pharma companies to expand their footprint to other districts in the state. “We need more industries outside Bangalore. With new infrastructure projects like the Mumbai-Bangalore corridor and Chennai-Bangalore corridor, it expands the scope for places like Hubli, Belgaum and Dharwad to improve their manufacturing capabilities,” he said.

He also urged local companies to establish manufacturing units. “The UK health minister who visited Bangalore recently was keen to set up manufacturing units in the state. If local companies don’t come forward, it will be captured by American and European companies,” he said.


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