NEW DELHI: Planning Commission
on Monday said there is no move "anywhere" to restrict
foreign investment in pharmaceutical even as an expert group
is looking into the specific issues related with FDI into
the sector.
"I don't think there is any move
anywhere to prevent the expansion of existing 100 per cent
foreign owned pharmaceutical companies or to prevent green
field investment by foreign companies," Planning Commission
deputy chairman Montek Singh Ahluwalia said at the India-US
High Technology Cooperation meeting.
Currently 100 per cent FDI is
allowed in the sector. He was answering a question on
whether the government was mulling restricting FDI in
pharmaceutical sector. There are fears that acquisition of
domestic pharma companies by MNCs will lead to drug price
escalation.
Ahluwalia said due to this
apprehension an expert group has been constituted under
Planning Commission member Arun Maira to look into the
issue.
"...(the expert group would see
whether) there is any problem or should there be any
restriction relating to merger and acquisition rules for
existing Indian pharma companies," he said.
Domestic pharma companies,
spearheaded by the Indian Drug Manufacturers Association and
Indian Pharmaceutical Alliance, had raised concerns that the
takeover of Indian companies by foreign firms could lead to
a situation of over-pricing of drugs and marginalisation of
homegrown firms.
In 2008, Japan's Daiichi Sankyo
acquired a majority stake in Ranbaxy Laboratories , while
Abbott Laboratories acquired Piramal Healthcare's domestic
formulations business last year.
The Department of Industrial
Policy and Promotion (DIPP), a nodal agency responsible for
FDI-related matters, had also raised concerns over the
growing dominance of multinationals in the sector.
Meanwhile, speaking on poverty
at an CUTS event earlier in the day, Ahluwalia said "nobody
denies that the poverty is very high. It is governments view
that the percentage of poor (people living Below Poverty
Line) has not fallen as fast as we would like to".
He also said that there is a
need to broaden the debate beyond the numbers.
Suggesting ways to to deal with
poverty, former Finance Secretary Ashok Chawla said:"We need
more resources to deal with poverty. We need to increase our
tax-GDP ratio which is currently hovering at around 10-11
per cent through broad-base taxation system".
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