New Delhi, October 2
The prices of drugs for major diseases are set to fall by 0.25 per cent to 500 per cent as the pharmaceutical industry has submitted a list to government of around 1,000 brands of generic and branded generic drugs whose sale would be subject to a cap in trade margins.

Meanwhile, the government is likely to introduce a new pharma policy following Supreme Court’s directive on controlling prices of essential drugs. Official sources said the government was considering introduction of a new pharma policy after a 14-member committee set up by Mr Paswan submits its report by month-end.

The Indian Drugs Manufacturers Association (IDMA) has claimed that at least 30- odd member companies of the organisation have voluntarily reduced the prices of branded generic products, as per the appeal of Union Minister for Chemicals Ramvilas Paswan.

It is learnt that the drug traders have urged the government to constitute an autonomous body or a new committee to monitor price reduction by pharmaceutical companies in the case of branded generics.

Traders led by the All India Organisation of Chemists and Druggists (AIOCD) already suggested this to the government at a recent meeting of the Pharmaceutical Advisory Forum initiated by the Chemicals and Fertilisers Ministry.

Industry experts have, however, warned that unless the government set up an autonomous body to monitor the price reduction, the exercise might prove an eyewash.

According to the IDMA, these prices would be revised downwards so as to ensure that the margins do not exceed 15 per cent and 35 per cent to wholesalers and retailers, respectively.

Mr Paswan said the prices of several hundred brands of generic-generic and branded generic drugs, including omeprazole and ciprofloxacin, are set to crash by up to 92 per cent with the pharma industry agreeing to a government proposal on capping trade margins.

It has been agreed that the retail margins for these drugs would be kept at 35 per cent while the wholesale margins would be 15 per cent, he said.

“This will be effective from today,” he said.

Accepting the industry suggestion, the Department of Chemicals has asked the industry to effect the new MRP for generic medicines from November 2.

The industry suggestions include a 5 to 10 per cent decrease in the prices of all drugs that figure under the National List of Essential Medicines (NLEM), intensified price monitoring of NLEM drugs and a price freeze on specified medicines.

According to official sources, price reduction is likely to be in the range of 30 to 40 per cent. All major companies, including Cipla, which is not part of any association, have submitted the list of drugs whose prices have been reduced.

Ministry sources said Cipla alone had given a list of 49 packs where prices had been reduced from 10 per cent to 50 per cent. The Indian Pharmaceutical Alliance (IPA) list included 660 packs.

The industry has been given 15 days to finalise its plans for public-private partnerships for free distribution of medicines among below-poverty-line families. The SSI drug sector represented by the Confederation of Indian Pharmaceutical Industries (CIPI) has already offered 0.5 per cent of their drugs turnover to be supplied free of cost among BPL families. Other industry associations are to get back to the department individually by October 15. 

Mumbai, October 2
The Anil Dhirubhai Ambani Group (ADAG) has moved into the group of corporates that boast of more than Rs 1,00,000- crore market capitalisation, making its Chairman, Mr Anil Ambani, the third richest Indian.

ADAG has become the country’s fifth biggest corporate group with a combined market cap of more than Rs 1,06,000 crore after the Tata Group, Reliance Industries, NTPC and Infosys.

An ADAG spokesperson confirmed that the group has achieved a market cap of over Rs 1,00,000 crore following the increase in Reliance Communications’ total authorised share capital and market cap.

The market cap of Reliance Communications increased to Rs 70,866 crore, from about Rs 42,400 crore.

According to the data available with the stock exchanges, Reliance Capital’s current market cap stands at Rs 16,221 crore, Reliance Energy at Rs 14,703 crore, Reliance Natural Resources at Rs 2,995 crore and Adlabs Films at Rs 1,364 crore — taking the group’s market cap to over Rs 1,00,000 crore.

Anil Ambani follows Wipro’s Azim Premji and RIL’s Mukesh Ambani in terms of their personal wealth, who are believed to have net worth of Rs 60,948 crore and Rs 60,190 crore, respectively. — PTI

New Delhi, October 2
If the government accepts the TRAI recommendation of auctioning the scarce spectrum for the third-generation mobile services (3G), it could earn at least Rs 6,000 crore and the Defence Ministry could use the money to create alternative communication links and vacate spectrum for commercial use.

An operator seeking 3G spectrum on an all-India basis will have to pay about Rs 1,500 million. There are six operators in most of the category circles. Even if only four players bid for 3G spectrum in a circle, the government will collect a minimum of Rs 6,000 crore.

The 3G spectrum would be available only for existing telecom operators like Bharti-Airtel, BSNL/MTNL, Hutch, Idea, Reliance and Tatas.

Interestingly, this is the first time that government-owned operators like MTNL and BSNL would have to compete with the private players for 3G spectrum space.

The regulator has set a base price for acquisition of spectrum for 3G services at Rs 80 crore for category ‘A’ circles, Delhi and Mumbai, Rs 40 crore for category ‘B’ circles and metro Chennai and Kolkata and Rs 15 crore for category ‘C’ circles.

Given the base price, TRAI has estimated that the government would earn a minimum revenue of Rs 1,500 crore from each operator aspiring to start country-wide 3G services. The revenue could go up depending upon the bidding amount.

All other successful bidders will have to pay a price at least 75 per cent of the highest successful bidder’s.

However, the COAI believes that the route of auction and high reserve price would be very harmful for giving the benefits of 3G in an affordable manner to the citizens of India. It said the government should seek to enhance its revenues for 3G through usage and not by imposing high initial fees.

On the other hand, the CDMA Development Group (CDG), the worldwide association for CDMA technology, said Trai’s formula for allocating 3G spectrum in the 450 MHz, 800 MHz, and 2100 MHz frequency bands was a step in the right direction for India’s telecommunications industry and its consumers. The group added that the formula was consistent with the manner in which such spectrum was allocated in other markets.

New Delhi, October 2
The Communications Ministry is understood to have sought time till February 2, next year for implementing guidelines that permit up to 74 per cent FDI in the telecom sector instead of the December 31 deadline set by the government.

According to highly placed sources, Communications and IT Minister Dayanidhi Maran has sought four months’ time so to enable resolution of inter-ministerial differences and addressing issues concerning telecom operators, particularly security aspect and different set of rules for firms with FDI up to 49 per cent and those with FDI between 49-74 per cent.

Immediately after the Cabinet meeting last week, Finance Minister P.Chidambaram had announced that an extension of three months till December 31 had been given to the Department of Telecom (DoT) to resolve the pending issues.

The sources said the issue could go to the empowered Group of Ministers on FDI headed by Defence Minister Pranab Mukharjee for early resolution of differences.

The original Press Note 5 that laid out the FDI guidelines for the telecom sector was issued in November last year with four months’ time to companies to abide by the norms.

But having failed to ensure compliance, the government gave two subsequent extensions of three months each. — PTI

New Delhi, October 2
Reacting to the claims of the Finance Ministry on achieving 8.9 per cent growth in GDP and around 4.5 per cent inflation rate, Assocham has rapped the government for its failure to maintain the rising prices of essential commodities under check.

Assocham has claimed that the average prices of eight essential commodities like wheat, pulses, coffee, tea, sugar, milk and eggs have gone up by 19 per cent during the past one year.

During the July, 2005, to August, 2006, period the average price of essential commodities increased by 19 per cent while the per capita income of an average Indian went up by a meager 6 per cent, Assocham Eco Pulse (AEP) study indicated.

While prices of pulses, coffee, tea, condiments & spices witnessed a sharp increase of 33.3 per cent, 33.7 per cent, 24.7 per cent and 24.8 per cent, respectively, other essentials like wheat, sugar, milk, eggs, fish and meat saw upward moment in the range of 8.5 per cent, 7.6 per cent, 7.8 per cent and 8.0 per cent respectively.

The chamber stated the per capita income of an average Indian which was about Rs 19,500 per annum in 2005, went up to Rs 20,700 in 2006.

The study adds that the rise in essential commodities’ prices and per capita income was utterly disproportionate.

New Delhi, October 2
Prime Minister Manmohan Singh’s visit to South Africa is likely to strengthen the historical ties between the two countries, and open a new era for the Indian Inc., which has realised that South Africa is the gateway to enter the vast market of Africa.

With the GDP growth touching 5 per cent and per capita income of over $ 4,000, South Africa (around 5 crore population) has emerged as the economic powerhouse of Africa.

The bilateral trade between the two countries, beginning in 1994 after the end of Apartheid regime in this country, reached $4 billion last year and is expected to triple by 2012.

Several Indian companies, including Tata group, UB group, Ranbaxy, Dr Reddy, Ashok Leyland, NIIT, have already invested substantially in the country, and using it as a base to expand in the neighbouring countries.

Considering country’s large diamond reserves, some Indian companies have shown keen interest to set up jewellery park to tap the growing market.

The Petroleum Ministry has also expressed keen interest in taping SA’s expertise in converting coal to liquid technology that may play a crucial role in meeting India’s energy needs.

A recent study by the World Bank points out that Indian and Chinese businesses in Africa now receives 27 per cent of Africa’s exports, triple the amount in 1990; today’s level is almost on par with Africa’s exports to the US and EU, Africa’s traditional trading partners. Meanwhile, Asian exports to Africa are growing 18 per cent per year, faster than to any other region in the world.

“This new ‘Silk Road’ potentially presents to sub-Saharan Africa - home to 300 million of the globe’s poorest people and the world’s most formidable development challenge - a significant, and to date, rare opportunity to hasten its international integration and growth,” notes Mr Harry G. Broadman, World Bank Africa Region Economic Adviser.

Another report prepared by the FICCI claims that South Africa’s importance for India lies not just in its own market but its link with other countries in the neighbourhood and with the rest of Africa.

“The South African Customs Union (SACU) offers an integral market in the Southern Africa to Indian exports. Following success of the IBSA, a trilateral business council among India, Brazil and South Africa, India has expressed interest for a preferential trade agreement or a free trade agreement with the SACU.

Greater Noida, October 2
Cashing in on the craze for premium cars, Honda Motors has unveiled a Rs 4,000-crore expansion plan aimed at doubling the current production capacity to 1 lakh cars per annum by the next year and to 5 lakh units by 2010.

Sharing his vision with The Tribune during the course of a visit to the company’s state-of-the-art plant here yesterday, Mr Hiroshi Shimizu, Director (Marketing), revealed that as part of the expansion drive the company was targeting tier-II towns and 100 dealers by 2007.

About the market share the company expected from its three brands, Honda City, Honda Accord, Honda Civic, besides the fully incorporated SUV Honda CRV by next year, Mr Shimizu said a majority of the customers owning a Honda car had upgraded to the next premium car, which was testimony to quality products rolled out by the company.

Answering a query about entry into the small car segment in India, Mr Shimizu asserted though the company was doing surveys on the untapped small car segment, there was no immediate plan to venture into this field.

About the introduction of hybrid cars running on alternative fuels like ethanol and battery-operated vehicles, he said the company would wait for an “appropriate time”. Underlining the company’s “proactive” role in finding solutions to the environmental and safety issues, Mr Shimizu claimed that Honda’s Green Factory initiative had played a significant role in environmental preservation, adding that zero-waste management was being aimed at all our factories.

Mumbai, October 2
India’s largest private sector firm, Reliance Industries Ltd (RIL), has reduced the retail petrol and diesel prices by Re 1 per litre in line with a decline in the international crude prices.

The reduction in prices would be effective from 6 a.m. on October 1, 2006, a company release said here.

“The international crude prices have softened to some extent recently. Therefore, RIL has decided to pass on the benefit to customers although it continues to suffer under- recoveries,” the release said.

RIL fuels will now retail at Rs 1.5 per litre higher than the nearest PSU outlet as compared to Rs 2.5 per litre earlier, it said.

Due to an increase in the crude prices, RIL had increased the retail fuel prices and demanded compensation from the government.

The company runs close to 1,300 retail pumps. Its market share, which stood at 14 per cent earlier this year, has dropped to 2 per cent after the price differential with PSUs.

“With the reduction in prices, RIL is hopeful of regaining many of its customers and its lost market share,” RIL said. — PTI