Envisages generation of one million direct and indirect opportunities The plethora of subsidies and incentives announced in the new exclusive policy for the micro, small and medium enterprises (MSMEs) sector by the Tamil Nadu government will create a large employment potential. New opportunities will be thrown open for artisans, ITI and diploma holders in the state to come and set up their own units, according to small industry associations. Tamil Nadu has unveiled a separate policy for the MSME sector with a vision to enhance the competitiveness of the sector and aim for a sustained annual growth rate of over 10 per cent for MSMEs. The new MSME policy, apart from encouraging agro-based industries, envisages generation of one million direct and indirect employment opportunities during the 11th Five Year Plan. The new MSME policy pampers tiny manufacturing units with capital subsidy on plant and machinery, low-tension power tariff subsidy, subsidy on assessed VAT and stamp duty exemption. Over and above this, the additional subsidies for units set up by women entrepreneurs, physically disabled persons and trans-gender entrepreneurs will be highly rewarding and encouraging, says S Srinivasan, president, Ambattur Industrial Estate Manufacturers' Association. New entrepreneurs and the small scale sector could reap the benefits of the current policy and become a regular feeder sector for the vibrant medium and large-scale sector, especially active in the automobile and engineering sectors in the state, he adds. K Gopalakrishnan, honourary general secretary of Tamil Nadu Small and Tiny Industries Association, says the policy will give fillip to the MSME eco-system in the state. The subsidy schemes will help small industry upgrade technology and machinery, thereby enhancing their competitiveness. The purpose of announcing a separate policy for the MSME sector is to make it co-exist with large industries as well as accelerate industrial growth and generate large-scale job opportunities, especially in the rural and backward areas, says P Selvam, secretary, small industry, government of Tamil Nadu. "With this new policy, we expect MSME sector contribution to the total exports from Tamil Nadu to go up substantially from the present 35 per cent,' he adds. Growing industrial demand has driven expansion by several units in the industrial estates, which are considered the growth engines of small and medium enterprises in and around Chennai. However, the units point out that land is not readily available for these units and expansion to other areas will prove to be unviable. The MSME policy prescribes, among other incentives and subsidies, reservation of 20 per cent of the land in all SIPCOT (Tamil Nadu Small Industries Development Corporation) industrial estates for MSMEs and upto 30 per cent for micro industries within SIDCO estates. This initiative is expected to help the small industry in a big way. Small industry bodies have for long pointed out that skyrocketing land prices caused by rampant SEZ promotion is affecting small industry growth. The policy also talks of enacting an Industrial Single Window Clearance Act for single window committees at the state and district levels and authority for setting time periods for approvals. The state government also plans to develop 22 new industrial estates in several parts of the state. Presently, there are about 78 industrial estates in Tamil Nadu. Locations for the new industrial estates have been identified and the government has also acquired lands for the these new estates. Lauding the state government for announcing a policy for revival of sick MSMEs, Srinivasan urges the government to undertake a detailed study on the causes of sickness. He points out that a primary cause for sickness is non-payment of supplier bills by medium and large industries; besides, lack of financial support, non-availability of technology, product process obsolescence, interrupted power supply and labour issues. The MSME sector in Tamil Nadu accounts for over 95 per cent of all industrial units, about 40 per cent of the output in the manufacturing sector and 35 per cent of exports. There were about 5,30,000 registered micro and small scale units as on March, 2007, providing employment to over 37 lakh people with a total investment of around Rs 16,817 crore. There is also a substantial unregistered sector of over 600,000 units which serves as a nursery for entrepreneurial talent, according to the MSME policy statement.

If the number of patent applications filed under the World Intellectual Property Organisation's (WIPO) Patent Cooperation Treaty (PCT) is any indication, India appears to be a laggard among the knowledge- and innovation-driven economies. That the country is way behind developed nations like the US and Japan in seeking patent safeguards for inventions, is understandable. What is more noteworthy is that it compares poorly even with a much smaller economy like South Korea, as also the much bigger China. The data put out by WIPO show that only 686 patent applications were filed from India in 2007, against 7,061 from Korea and 5,456 from China. And while the rate of patent filings is growing steadily elsewhere, it is on the slide in India. The number of applications in 2007, as a result, was the second-smallest in the last five years. However, single-number comparisons of complex processes can be deceptive. So it is worth pointing out that any comparison based merely on the number of patent applications could be misleading, and other relevant factors also need to be taken into the reckoning. A comparison of India with China must be weighted for the fact that the sectors that drive economic growth are different in the two countries. While software and services predominate as Indian growth engines, Chinese growth is coming in substantial measure from new, mass-scale manufacturing activities. In the Indian software sector, research and development (R&D) activity is controlled largely by the big global companies, with headquarters elsewhere, and they treat India as an offshore R&D hub to make use of its low-cost, scientific and engineering talent pool. The patents filed on the basis of such work will mostly be done in the company's country of origin, so it will not show up in India's number. Also, there is little scope for patenting when it comes to software services. And where the life-science and pharmaceutical industry is concerned, investments in in-house R&D are a recent phenomenon. As this trend picks up, one should expect patent filings to increase. That said, the importance of patenting has come slowly to Indian companies. This could be because of a slow awakening to globalisation, and because India is a signatory to a large number of global pacts and protocols that provide automatic intellectual property protection to innovations in different fields in all the member countries. China, on the other hand, has not been as open to embracing knowledge protection obligations through such treaties. In any case, the Chinese track record in respecting intellectual property has been dismal and many global companies have suffered on this account. Though India's record in this respect may also not be perfect, it has taken two key steps through the amendment of the Patent Act in 2005 to align it with the international agreement on trade-related intellectual property rights (Trips), and the enactment of a law on sui generis plant variety and farmers' rights protection. Nevertheless, even after considering these factors, the truth is that India does not score very well on the R&D front. The positive change is that, even in manufacturing industries like automobiles, Indian companies now show signs of doing serious R&D work.

Mumbai-based Sun Pharmaceuticals has filed a post-grant opposition with the Mumbai patent office against a product patent granted to the extended release version of Johnson and Johnson's (J&J) blockbuster drug Risperdal, used in the treatment of psychological disorders and schizophrenia. Risperdal, with the molecular name risperidone, is the second-largest selling drug of Johnson and Johnson with over $4.5 billion worldwide sales in tablet, injection, syrup and orally dispensable forms. It is also one among the largest selling psychiatric drugs, according to sources. Sun Pharma has been marketing a generic version of this drug for the last few years in India under the brand name Sizodone, according to company sources. The patent on Risperdal, granted in February 1986, will expire in the US on June 29, 2008. The Indian patent was for an extended release version and this had not been patented in the US, said patent experts having knowledge of the development. Patent wars Swiss drug maker Roche's anti-cancer drug, Pegasys, was given a patent in India in 2006 and this was challenged by Wockhardt and a Mumbai-based non-governmental organisation, Sankalp. Generic drugmaker Cipla is battling in the Supreme Court to revoke a patent granted in February 2007 to Roche's cancer drug Tarceva. Another patent granted to Roche's anti-HIV drug, Valganciclovir, is also being challenged in the court by Lawyers Collective, a Mumbai-based NGO, and Cipla. According to the Indian Patent Act, which was amended in 2005, a product patent that bars other companies from copying the drug for generics, can be challenged within one year. The Mumbai patent office granted a patent to Janssen Pharmaceutica, a group company of Johnson and Johnson, on July 20, 2007, with patent number 208191, against its mail box application number 188AL/1995. The patent related to sustained-release particles of risperidone, said sources. Company sources declined to reveal the sales figures for the drug in India. "We don't comment on litigations and patent-related issues as a matter of policy,' said a Sun Pharma spokesperson. Interestingly, Dr Reddy's Laboratories and US-based Mylan Laboratories were among the first to challenge the patent on Risperdal in the US, where the drug has sales of over $2 billion, said sources. "Since the product patent regime was introduced in India in 2005, we estimate that more than 150 product patents have been granted and over 90 per cent of this is for multinational pharmaceutical companies. So far, very few products have been opposed by Indian companies, according to our knowledge,' said Varun Chonkar, a patent expert. He said the Indian patent office was yet to officially announce data on the number of patents granted and challenged in India.

Even as India is fast turning into the diabetes capital of the world, multinational drug companies are busy patenting new-generation diabetes medicines for exclusive marketing rights in the country. The Indian Patent Office has already awarded patents to at least three such products, say patent experts. Though the immediate impact of the patent protection to such drugs is not known, experts say prices of diabetes medicine has a long-term economic significance due to the fast-growing diabetic population of the country. Official estimates predict the number of diabetics in India to be 3.77 crore by 2010 and 4.58 crore by 2015. "Considering the World Health Organisation (WHO) estimates for Indian diabetic population, patenting of these drugs are sure to have significant impact on the diabetic population,' Varun Chhonkar, a Mumbai-based intellectual property consultant said. In February, a patent was granted (the most recent grant of such patent) to Swiss drug major Novartis for Vildagliptin, an anti-diabetic compound. Vildagliptin is the second drug in the class of dipeptidyl peptidase IV (DPP IV) inhibitors to reach the market. The first one was Merck's Sitagliptin which also received an Indian patent in December. Globally marketed as Januvia, Merck's Sitagliptin recorded $668 million in worldwide sales in 2007 and is projected to reach $2 billion by 2011. In June, Bristol-Myer had received an Indian patent for its Saxagliptin, a likely global blockbuster diabetes drug. "The drug companies will have to make medicines affordable to Indian patients. I have suggested Merck to have an India specific pricing for Januvia as the prices they charge in the US, $5 for a pill, may not be affordable for majority of our patients. Diabetic patients often have multiple medical complications and will have to take other medicines also, thereby making treatment very costly,' A K Jhingan, chairman, Delhi Diabetes Research Centre, said. According to World Health Organisation estimates, the projected number of diabetic patients in the next decade globally will exceed 20 crore. India had 3.2 crore diabetics in 2000 and might touch 8 crore by 2030, it has pointed out. The International Diabetes Federation (IDF) has also reported that the total number of diabetic subjects in India was 4.1 crore in 2006 and would rise to 7 crore by 2025. It should be noted that the chemicals ministry, the administrative ministry for the pharma sector, has constituted a committee to recommend a scheme for price negotiation of patented medicines to make such new generation drugs cheaper in the country.

The production of crude oil from the country's sedimentary basins fell marginally by 0.3 per cent to 2.89 million tonne (mt) in January this year compared with 2.90 mt in January 2007. The output was, however, marginally higher than the 2.88 mt in December, data released by the petroleum ministry showed. The output of natural gas in January was also down by 2.53 per cent to 2.69 billion cubic metres (bcm) compared with the 2.76 bcm in January 2007. Compared with the 2.85 bcm gas produced in December 2007, the fall in January this year was higher at 5.61 per cent. The decline in crude oil and gas production in January was due to a two-week shutdown of a production platform at Bombay High, the country's largest oil producing field. In the April-January period of the current financial year, crude oil production was 0.28 per cent higher at 28.46 mt compared with 28.38 mt in the same period of the last financial year. Natural gas production was up by 1.7 per cent to 26.89 bcm from 26.44 bcm in April-January 2006-07. In January this year, the country's oil refineries processed 13.67 mt crude oil, 5.31 per cent higher than the 12.98 mt in the year-ago month. The rise in refinery production is primarily due to private refiner Essar Oil. The quantity of oil processed at the company's refinery rose almost 161 per cent in January after the full 10.5-million-tonne-per-annum capacity was commissioned in the later part of the month. The refineries, on an average, utilised 108.4 per cent of their capacity in January 2008, against 106.9 per cent in the year-ago month. In December 2007, the capacity utilisation was 103.5 per cent. In the April-January period of the current financial year, refinery output increased 7.30 per cent to 129.78 mt, compared with 120.94 mt in the same period of the last fiscal. Average refinery capacity utilisation during the period was, however, lower at 104.2 per cent compared with 106.7 per cent in the year-ago period.

The NSC has transformed itself from the usual non-profit-earning PSU into a vibrant entity. Private sector seed companies have, till now, had a virtual monopoly over the production and sale of seeds, mostly hybrid seeds, of high-value crops. This was chiefly because the public sector seed producers, besides being fewer in number, remained focused right from the beginning on the production of seeds of low-value but high-volume crops (basically cereals), where profits were low though the quantities to be handled were large. Besides, public sector units (PSUs) made little attempt to keep pace with time. However, the much-needed change in the public seed sector is coming about now with the largest player, the National Seeds Corporation (NSC), adopting a corporate culture and deploying state-of-the-art technology to produce seeds even of high-value crops and hybrids. Indeed, as could be expected, this change in the work culture has transformed the NSC from the usual non-profit-earning PSU into a vibrant entity striving to find a place among the mini-Ratnas, if not the Navratnas. The headquarters of the NSC and four of its regional units in Bhopal, Jaipur, Secunderabad and Bangalore, have already acquired the ISO 9001-2000 certificate and the remaining regional units are in the process of doing so. No wonder then that, after a gap of 32 years, the NSC paid a 5 per cent dividend, amounting to a little over Rs 1 crore, to the government in November last. This was made possible by a massive 46 per cent growth in business in the past one year alone. Its post-tax profits jumped by a whopping 200 per cent in 2006-07. Indeed, the man behind this incredible transformation is the present chairman and managing director B B Pattanaik. "I would be able to declare a much higher dividend for the current year,' asserts an enthusiastic Pattanaik. He has not only motivated the aging employees of this 45-year-old corporation for better performance but has also taken several new initiatives to be in a position to rub shoulders with the well-run private sector seed companies, many of which now have business tie-ups with the NSC. "I am not interested in increasing competition with the corporate houses; I am more for partnerships,' says Pattanaik. About a dozen big houses, including some multinational companies like Monsanto and Cargill and domestic players like ITC, ECL Agro-Tech and Sheel Biotech, have forged strategic business alliances with the NSC. Most of these companies use the vast marketing network of the NSC for the sale of their seeds and other farm inputs. The Indian Oil Corporation, on the other hand, sells the NSC seeds through its network of Kisan Seva Kendras (farmers' service centres). Significantly, the NSC is now very much into the production of hybrid seeds, organic seeds and even tissue culture plantlets. It is multiplying the seeds of mustard hybrid DMH-1-DHARA evolved through biotechnological interventions by the Delhi University; as also those of the pigeon pea (arhar) hybrid, ICPH 2671, evolved by the Hyderabad-based International Crops Research Institute for Semi-arid Tropics (ICRISAT). Besides, the NSC would soon begin supplying gladiolus bulbs for flower cultivation. The NSC's tissue culture unit with a capacity to churn out annually about two lakh test tube-raised plantlets for propagation of the banana is coming up in Bhubaneswar and may become operational by the next month. For research and development back-up, the NSC gets support from the vast agricultural research network of the Indian Council of Agricultural Research (ICAR) and the state agriculture universities. This helps the NSC to add, on an average, around 20 new varieties and hybrids to its product range every year. Significantly, the NSC is now playing a catalytic role in the expansion of seed production, processing and storage infrastructure in the private sector under a government scheme involving 25 per cent subsidy for this purpose. About 120 projects for the creation of seed processing capacity worth 23 lakh quintals and seed storage capacity of 9 lakh quintals have already been approved. A total subsidy of Rs 6.94 crore would be paid to the private sector companies which are creating these facilities. For involving more and more farmers in the relatively more lucrative seed production business, the NSC is facilitating the provision of loans to them from the State Bank of India. Besides, it is ploughing back about 2 per cent of its own profits into the activities related to seed production by farmers and other measures as part of its corporate social responsibility initiative.

Skirting commitments on all controversial issues like Special Economic Zones (SEZs) and the Indo-US Civil Nuclear Agreement, the government today made it clear that pro-people, inclusive social and economic policies alone would be pursued in the last year of its five-year term. The President's address to the joint session of Parliament, traditionally a summary of the government's activities during the previous year and its priorities for the coming year, spelt out only those issues on which there was parliamentary consensus. Therefore, while showcase schemes like the expansion of the National Rural Employment Guarantee Programme and the Sarva Shiksha Abhiyan were held up as ways in which the government had embraced the poor, contentious issues like Left extremism, land reforms and labour legislation were not even mentioned in the speech. Much was made of Bharat Nirman, the National Rural Health Mission and the Jawaharlal Nehru Urban Renewal Mission. This was made possible, the government said, because of the performance of the Indian economy that has grown at close to 9 per cent per annum for four years in a row. "The historically high investment rate, of over 35 per cent of GDP, and savings rate, of over 34 per cent of GDP, symbolise a new dynamism in our economy,' the government said in the address, adding that this was all the more creditable against the background of high international oil prices and rising commodity prices. The government said the Indian consumer would continue to be insulated against high international costs of food commodities and oil, putting paid to any tinkering in the duty structure and subsidies in oil and gas. The government said outlays on agriculture, health and rural development had been tripled and together with education, these sectors account for more than half of the Central Gross Budgetary Support as compared to less than one-third in the Tenth Five-Year Plan. "This is a major structural shift in Plan priorities, aimed at reducing disparities and empowering people,' the address said. It added that attention had been focused on areas like agriculture and the target set in the National Common Minimum Programme, of doubling agricultural credit in three years, had been exceeded. However, the government did not commit itself on the implementation of the Radhakrishna report on rural indebtedness. Conscious that it was under fire on the issue of agricultural prices, the address said the government had effected "an unprecedented steep hike of over 50 per cent in the Minimum Support Price (MSP) for wheat and about 33 per cent for paddy in the last four years'. Specific sectoral successes like the legislation for unorganised labour, increase in the level of minimum wage from Rs 66 to Rs 80 per day, increase in the eligibility limit for payment of bonus to workers from Rs 3,500 to Rs 10,000 per month, and the National Rehabilitation and Resettlement Policy for people displaced from their land due to development projects, were also mentioned as landmark schemes. Despite the prime minister's repeated warnings on the performance of the power sector, the President's address only patted itself on the back for allotment of coal blocks with the capacity to support 68,000 Mw of power generation and the identification of nine sites in for setting up coal-based Ultra Mega Power Projects (UMPP) with capacity of 4,000 Mw each. Nor was there any mention of when additional spectrum would be allotted for the telecom industry, even as the government announced that the Indian telecom sector had emerged as the fastest growing in the world with the addition of over 7 million subscribers per month. On SEZs, the address said the government had already provided direct employment to about 100,000 people, with indirect employment estimated at twice as much. "They have attracted investment of over Rs 50,000 crore, and are expected to generate exports of Rs 67,000 crore this year,' the address said. Meanwhile, the third front declared that the President's speech skirted around major problems facing the country, including that of continuing farmer suicides and inflation. The United National Progressive Alliance (UNPA) leaders said they had support of UPA allies CPI(M) and CPI in their attempts to raise these issues in the public realm. According to the Samajwadi Party general secretary Amar Singh, CPI(M) leader Prakash Karat and CPI leader A B Bardhan will be participating in a UNPA-sponsored dharna on farmer suicides to coincide with the presentation of the railway budget on Tuesday.

Firm to set up coal-based plant in Jharkhand or Chhattisgarh. Godawari Power and Ispat (GPIL), an integrated steel manufacturer based in Chhattisgarh, is mulling foray into commercial power generation with projects in Chhattisgarh or Jharkhand with capacities ranging between 300 to 1,000 mw with coal and coal rejects as fuel. A consortium led by GPIL has been allocated four coal blocks at Nakia and Madanpur in Chhattisgarh with 243 million tonnes of total reserves, of which, GPIL's share is 63 million tonnes. Of this, 40-50 per cent will be wastage such as coal ash and gases during coal processing. GPIL was planning to optimise its coal mines with coal rejects-fired power plants as part of its backward integration expansions, said sources familiar with the development. GPIL would start mining by 2009 and set up power generation facilities by then, added sources. "Our board of directors is yet to consider or finalise any plan and, now, we are concentrating only on the existing expansion plans to increase our operating margins. We may enter into commercial power business in future since our businesses are closely associated with power generation,' said Dinesh Gandhi, director, finance. GPIL is a mid-sized integrated steel player producing sponge iron, steel billets, steel wires, wire rods and ferro alloys and generates captive power from waste gases produced at its steel manufacturing facilities. GPIL currently has 53 mw of captive power consumption, which includes a 25 mw captive power plant commissioned in the first half of 2007-08. Of this, 11 mw is produced using byproducts of sponge iron. According to sources, B L Agarwal, managing director of GPIL, in his personal capacity has picked up 25 per cent stake in Maruti Clean Coal and Power, a company floated in Chhattisgarh to set up a 270 mw coal-fired power plant with an investment of Rs 1,000 crore. However, GPIL has not firmed up any fuel linkages for this project, sources said. GPIL is setting up a coal washery unit and a 0.6 mega tonnes per annum (mtpa) pelletisation plant with an overall capital expenditure of Rs 230 crore. This expansion would reduce the raw material cost helping increase operating margins up to 40 per cent. With captive iron ore and coal mines ready for raw material supply by 2009, the company could enter into areas such as power production in a big way, said sources.

One Bundelkhand village uses water retention techniques to achieve a good crop in spite of 4 years of drought, with a little help from NGO Parmarth. Uttar Pradesh's Bundelkhand region has been devastated by drought and other adverse weather conditions over the past four years. Madhaiya Anghela village in Madhogarh sub-division of Jalaun district exhibits the typical symptoms. Villagers say the kharif crop this year is only 20 per cent of the normal years. The prospects for the rabi crop are very dim

An empowered committee of secretaries (ECS) has cleared Cairn India's proposal to recover the cost of the $700-million pipeline from its Rajasthan fields to the Gujarat coast through sale of crude oil from the field. "The ECS has allowed the pipeline cost to be included in the field development cost of the Rajasthan field,' said a senior government official. The ECS decision is likely to go to the Cabinet Committee on Economic Affairs for final clearance. Cairn is laying a pre-heated 585-km pipeline to transport its "waxy' crude oil from Barmer in Rajasthan to Salaya in Gujarat from where it will be transported to various refineries. The government allows a company to recover the investment in developing an oil or a gas field through oil sales. Once the company has recovered the costs, the government starts taking a share of the profits from oil sales. The field extends to the point of delivery of oil. The ECS decision will shift the point of delivery from Rajasthan to the Gujarat coast. A Cairn executive said they had not received the final word from the government. He added that all major contracts for laying the pipeline and developing the field had been awarded. "We remain committed to producing oil from Rajasthan in the second half of 2009,' the official said. The pre-heated pipeline became necessary after . Refinery and Petrochemicals Ltd (MRPL), the official buyer of the crude, said it could take only around 1 million tonne (mt) out of the projected 7.5 mt output. The oil has to be transported through a heated pipeline as this "waxy' oil coagulates at normal temperatures.