Viewpoints on Insurance and Patents Bills
NEW DELHI, Dec 11 — The Union Government’s decision to bring the Insurance Regulatory Authority Bill and the Patents (Amendment) Bill, 1998, in the current session of Parliament has triggered off a debate. The Government, despite the contradictions within its fragile coalition, says these laws are necessary in the overall interests of the economy and integrating it with the global economy.

Khadi exhibition CHANDIGARH, Dec 11 — A zonal level Khadi Gramodyog exhibition sponsored by KVIC, Government of India is going on at Sector 34 here, where more than 55 stalls are set up by various units and institutions.

Revive housing to boost economy
CHANDIGARH, Dec 11— Mr Ram Jethmalani, Union Minister for Urban Affairs and Employment, has called for the revival of housing-related activities with a view to boost up the Indian economy.

IDBI stops loans to 3 sectors
MUMBAI, Dec 11 — Industrial Development Bank of India has stopped sanctioning additional loans to industries in the steel, cement and paper sectors, which are undergoing difficult times.

Small scale pharma industry faces closure
NEW DELHI, Dec 11— The Centre’s new found preference for drugs manufactured by multinational companies has severely hit the Indian small scale pharmaceutical industry, which used to cater to over 80 per cent requirements of Government hospitals, including Central Government Health Services.

Controversy
Viewpoints on Insurance and Patents Bills
From T. V. Lakshminarayan, Gaurav Choudhury

NEW DELHI, Dec 11 — The Union Government’s decision to bring the Insurance Regulatory Authority Bill and the Patents (Amendment) Bill, 1998, in the current session of Parliament has triggered off a debate. The Government, despite the contradictions within its fragile coalition, says these laws are necessary in the overall interests of the economy and integrating it with the global economy. Being a signatory to the World Trade Organisation, the Government has little choice but to bring the patenting laws in the country in line with international practice. The Patents (Amendment) Bill is a first step in this direction and the Bill if passed would grant Exclusive Marketing Rights (EMRs) to pharmaceutical and agricultural chemical products. The Tribune spoke to a couple of prominent votaries and critics of the two measures.

On the IRA Bill, the former Group Head of Insurance of JK Industries , Mr Shambhu Anand, came out in support of opening the insurance sector. The Bharatiya Janata Party MP from Chandigarh, Mr Satya Pal Jain, who like all his party colleagues will vote in favour of the Bill, however, reflected on the reservations he had before the Prime Minister convinced the party cadres about the importance of the IRA Bill in the overall economic interests of the country. Mr Jain, incidentally is a whip of the party in the Lok Sabha, and he would ensure that his party MPs vote in support of the Bill.

With the details of the draft Patents (Amendment) Bill yet to trickle in, the veteran leader of the Communist Party of India (Marxist), Mr Somnath Chatterjee, was cautious in his criticism. Dr Simon Campbell, the co-discoverer of the internationally renowned anti-impotency drug “Viagra” and Chairman, Executive Committee (R and D) of pharmaceutical major Pfizer Ltd, was, however, more emphatic in the stating that India must tighten its patent regime. Following are there viewpoints:

Shambhu Anand

The customer should have the choice of identifying the right type of services for insurance cover. This can arise only out of competition. The existing companies have become too big for themselves. No doubt they have achieved considerably during the last 25 years. But probably they have done what they could do. And unless they are thrown open to competition ,things cannot improve. Public is really in difficulty particularly in terms of service and settlement of claims. Especially the individuals are in very bad shape.

In due course of time, competition will also bring down the prices, especially once the (IRA) comes into force. Our insurance have grown matured and are now able stand upto competition.

People are talking about flight of capital through the reinsurance route. But I firmly believe that no amount of capital can flow out of the country. The argument that funds flow out is absolutely baseless.

While LIC has done a creditable job in terms of network, as far as the quality of service is concerned is negligible. This is more so with General Insurance where claims are more frequent. It is the customer who pays the heart and money. But presently he lacks choice both in terms of products.

As far as the cap on foreign equity is concerned, I think 26 per cent is reasonable.

Our initial reservations against opening the insurance sector for foreign participation came out of the fear of flight of capital. I was of the view that Indian Insurance companies should be controlled only by Indians and foreign companies should not be allowed. We don’t want Indian money to go out.

The existing insurance companies in the country were not yet ready for foreign competition. Having decided to allow entry of foreign equity, the Government should take all measures to see that the Indian companies are fully prepared to meet the challenge. Induction of technology and modernisation is a must.

The interests of the LIC and the GIC can be protected if despite the entry of foreign players, all Indian decide to patronise the national companies. This way no harm will be done to the economy.

The Government should also announce some concessions and relaxations for the domestic companies to ensure a level playing field for them.

The Prime Minister has said that it was an economic compulsion for the Government to push through the IRA Bill. It was in this context that even those opposed to the Bill within the BJP agreed to support it. After all national interest is supreme to one’s own interest.

I pay rich tributes to the intellectual talent of Indians who have contributed to the scientific advances around the world.

However, I am surprised that the India with such an acknowledged source of intellectual capital, as has been demonstrated through its pre-eminence in the field of computer software, has not made any significant contribution in the area of new drug development. All the more , as many Indians occupy key positions in the discovery labs of Pfizer and many other multinational pharmaceutical companies.

It is regrettable that Indian genius was largely directed to merely process re-engineering of previously discovered drugs.

However, I am very pleased to note the positive steps taken by the Indian Government in reforming its regulatory environment. India’s endorsement of intellectual property rights would definitely create and environment conducive to new drug discovery in India.

I believe that India’s wealth of traditional medical knowledge and coupled with its pool of scientific talent is sure to produce an unparalleled synergy.

While global pharmaceutical companies recognise and appreciate the tremendous scientific, creative and economic potential in India, as regards investing in India, most are still waiting to see when the commitments of Indian Government to intellectual property and particularly patents translated into action.

The drug business is an extremely high -risk business. The industry average of a company’s spending on research and development of a new drug is roughly $ 450 to 500 million.

Developing a new drug takes years of painstaking research. Consider Viagra for instance. The first proposal was sent in 1985. But the approval for commercialisation of the drug was achieved only in March 1998. This shows the amount of time taken for the development of the drug. For every new drug developed.

As far as Pfizer is concerned we spend about 15 per cent of its total sales revenue roughly $ 2.5 billion per annum on research and development programme in 50 odd disciplines. But the comparable figure for India is about 2 per cent. In each of the drug the Pfizer has discovered,either it is on the first or second in its class.

As far as the Indian patent laws are concerned, I personally do not think that it makes any commercial sense to market Viagra or any other of Pfizer’s new drugs in India in the absence of patent protection. Five years is too short a period for any drug firm to recover its investments.

It takes on an average 10 to 13 years to develop a new drug and unless we have patent protection it makes no commercial sense to market the drug as the company has to recover the investments made on research and developing it.

As I said earlier developing new drugs is a high risk business and only one out of several drugs being researched actually finds its way into the market. We also have had same spectacular failures in which huge amount of money was spent on trying to develop new drugs.

We (the Left parties) are opposed in general to the amendment of the existing patent laws as it is our firm belief that it is not good for the Indian companies. The Patents (Amend-ment) Bill, 1998, seeks to grant Exclusive Marketing Rights (EMRs) to pharmaceutical and agricultural chemical products. One has yet to see the Bill, but on the face of it it does not appear to be a good thing, there may be nothing particularly wrong with the proposed amendment but our objection is to the obsession with anything foreign.

About reports that the Government would have checks and balances in the patent laws, one would know about it only after studying its full implications.

Some clauses of the amendment appears to be all right but before going through the Bill carefully, it would be premature to say anything definite.

Khadi exhibition
Tribune News Service

CHANDIGARH, Dec 11 — A zonal level Khadi Gramodyog exhibition sponsored by KVIC, Government of India is going on at Sector 34 here, where more than 55 stalls are set up by various units and institutions.

To encourage the sales of khadi, Government of India is providing rebate upto 30 per cent on various items on khadi like darries, khes, towels, woollen jackets, shawls, coats and silk sarees, readymade ladies suits etc.

Previously sales targets of the exhibitions was Rs 75 lakh. The exhibition received very good response from the people. The total sales upto December 8 was Rs 75,27,056, out of which sales of khadi is Rs 58,36,262 and village industries products is Rs 16,90,794. Keeping in view the public demand it has been decided to extend the exhibition upto December 20 and it is expected that total sales will exceed Rs 1 crore.

Revive housing to boost economy
Tribune News Service

CHANDIGARH, Dec 11— Mr Ram Jethmalani, Union Minister for Urban Affairs and Employment, has called for the revival of housing-related activities with a view to boost up the Indian economy.

Speaking at the National Conference on “Sustainable Urban Housing Development” at the CII regional office here today, Mr Jethmalani stressed the need for joint ventures between the government agencies and private sector in the housing sector so that the shortage of over 3.5 crore dwelling units in the country could be met.

Expressing concern at the growing population, the Minister said without a check on the population there could be no economic prosperity. He urged the industry to supplement the government efforts in this direction.

He said in the Rent Control Act, which was to be implemented soon, the interests of tenants as well as the landlords would be protected.

Earlier, Mr Adi Godrej, Chairman of the CII Urban Infrastructure Committee, while calling for the “complete” repeal of the Urban Land Ceiling Act, urged the Central Government to make the the laws relating to housing sector simpler.

Among those, who spoke were: Mr S.K. Munjal, Chairman of the Housing and Urban Development Committee of the CII (Northern Region), Mr Arun Bhagat Ram, Chairman of the CII (Northern Region) and Mr V. Suresh, Chairman and Managing Director of Hudco.

The minister also inaugurated In Build ‘98, an exposition of interiors and building materials.

IDBI stops loans to 3 sectors

MUMBAI, Dec 11 (PTI) — Industrial Development Bank of India (IDBI) has stopped sanctioning additional loans to industries in the steel, cement and paper sectors, which are undergoing difficult times.

This was revealed by IDBI Chairman G.P. Gupta. The three industrial sectors, however, are doing “marginally” better this year, Gupta said.

In response to a query, the IDBI Chairman said Standard Poor’s recent downgrading of rating outlook to negative for Indian Financial Institutions (FIS) was more dictated by short term considerations as the FIS have exposure to key sectors like steel, cement and paper.

“In the long term economic scenario, everything is sound, we are a long-term player,” he asserted.

Small scale pharma industry faces closure
Tribune News Service

NEW DELHI, Dec 11— The Centre’s new found preference for drugs manufactured by multinational companies has severely hit the Indian small scale pharmaceutical industry, which used to cater to over 80 per cent requirements of Government hospitals, including Central Government Health Services (CGHS).

According to the President of the All-India Government Pharmaceuticals Suppliers Association, Mr Arvind Bhargava, eversince the “pro-swadeshi” BJP-led Government took over in March this year, the Union Health Ministry has virtually stopped making purchases from the traditional suppliers and has instead taken a liking for the more expensive branded drugs available in the open market.

The Ministry of Health and Family Welfare shortlists the essential medicines to be provided to various beneficiaries of Government of India and State Governments and this list of drugs is called the Vocabulary of Medical Stores (VMS). The drugs listed in the VMS are distributed the Medical Stores Organisation.

Mr Bhargava alleged that the Union Health Ministry during the last eight months had virtually ignored the VMS and it was sourcing a majority of the requirements from the open market.

The Government gets only marginal discount over the Maximum Retail Price and even at this discount it is more expensive than the medicines supplied by the local companies. For example a packet of eight Digene tablets brought in the open market costs the Government Rs 3.65 as against Rs 1.44 for the same quantity charged by the small scale manufacturers. Similarly a 170 ml bottle of Gelusil liquid costs Rs 22.51 in the open market as against Rs 12.47 per bottle charged by the local manufacturers.

The All-India Government Pharmaceuticals Suppliers Association has already written a letter to the Prime Minister in this regard. It has contended that if timely steps are not taken to remedy the situation, it would result in thousands of SSI units closing down leaving millions of people unemployed. Their closure would also lead to a steep increase in prices of pharmaceutical products which would move into the hands of the multinationals.

PCs to be costlier worldwide

NEW DELHI (PTI): Personal Computers (PCs) may get costlier worldwide as the hard disk drive (HDD) manufacturers are expected to raise prices to make up for their per unit production losses, top official of a leading HDD company said here.

At present, hard disk manufacturers are selling at below-cost prices worldwide but they are unlikely to continue on this path for much longer, said Vice-President of Western Digital for East Europe, Middle-East Africa and Indian Subcontinent, Ken Larsen.

“With today’s infrastructure, at least a $ 145 price is needed to break even, companies can go in for $ 130 for some more time but not forever. Its either $ 145 or quitting the business altogether,” Laresn and while announcing his company’s investment plans for India.

“The industry price point has dropped drastically in the last 10-15 months worldwide, from $ 190 to $ 170 and is expected to touch $ 130 this year,” he added.

Western Digital

NEW DELHI (PTI): The US computer hardware major Western Digital will invest $ 350-400,000 in India in 1999 to corner 20 per cent of the country’s hard disk market, a senior company official told PTI.

The company is also finalising plans to set up service centres in all major Indian metros via its distributor in India, Servex M.E. Limited, by January next year, General Manager of Servex A. Nava Krishna said here today.

Elaborating Western’s plans for India, Vice-President of East-Europe, Middle-East, Africa and the Indian subcontinent Ken Larsen said, “We’ve opened an office in Dubai in May to specifically cater to the Indian and Middle-East markets, investing over $ 750,000.”

Sun Micro

BANGALORE (PTI): Sun Microsystems, a leading US computer networking giant is planning to establish an engineering centre in the city, the company’s Site Director, Geoffrey Baehr said.

The centre would augment Sun’s existing India operations which include a Java competency in Hyderabad, Contract Engineering in Chennai and the country business headquarters in the city, he told newspersons here.

Geoffrey said the Sun Microsystems had already set up engineering centres in France and Israel.

Investment

LONDON (ANI): Two Indian software groups are set to bring 500 jobs to London. The move is heralded by the Foreign Office as the start of a new wave of Asian investment from India and China, writers David Parsley of The Sunday Times.

Apar Infotech is setting up a European base in Brentford, West London, creating 400 jobs over three years. It will use the British base to launch its expansion in Europe. Polaris Software is also using the capital as a launch pad into Europe, creating 100 jobs in Ilford, East London.

Both groups are from Bangalore and the deals are a reversal of fortune for Britain, which has been losing out to India in Information Technology investment with groups such as British Airways, IBM and Microsoft all investing heavily in the country. Bangalore is known as India’s Silicon Valley.

IA concession
NEW DELHI, Dec 11 (PTI) — The Indian Airlines (IA) has offered leave travel concession of 30 per cent for economy class travel on its domestic flights upto March 31 next year. The concession is available to employees of central and state governments, public sector organisations and educational institutions who are entitled to reimbursement of full normal air fare while travelling on leave, an IA press note said.

Benetton
NEW DELHI, Dec 11 (TNS) — In perhaps its first foray beyond metropolitan centres, Benetton, the casual clothing major, has announced the opening of an exclusive showroom at Patiala. The showroom is located in Lella Bhavan complex.