Wish upon on a star
Narendra Modi’s massive electoral mandate has unfortunately raised expectations; both from the man on the street as well as from CXOs in boardrooms. Many have seen in him the glimmer of hope that the first star in the night sky brings. And seem to have wished upon this star. Will NaMo and team live up to the expectations?
With this government set to present their first Union Budget in July, Express Pharma asked association chiefs as well as industry analysts to share their wish list. Some say that in the past few years, this annual project has turned out to be an exercise in futility, with the pharmaceutical sector getting far too little, in terms of financial incentives or visionary policy reform. Or so goes the grouse.
This year, the mood is more upbeat, though only slightly so. Expectations of a silver bullet have been some what tempered by the partial roll back of the proposed hike of rail fares but hope springs eternal. To get a feel of what tops the wish lists of association chiefs and industry analysts, see our feature: Hope against hope, (pages 34-39)
Our cover story in the July 1-15 issue looks at another area where Prime Minister Modi seems determined to change the status quo: infrastructure. One of the points mentioned in BJP’s election manifesto was ‘robust physical and social infrastructure’. The 52-page document goes on to detail specific areas of intervention in the areas mentioned in the pledge. The manifesto has probably become the most studied document by industry honchos as they try to read between the lines and guesstimate the impact on their sectors.
Putting in place this infrastructure, both at the micro and macro level, has since become part of PM Modi’s 100-day agenda. Press reports seem to suggest that he sees the revival of Special Economic Zones (SEZs) as the ticket to generate employment as well as spur economic growth at the corporate level. (http://m.financialexpress.com/news/narendra-modi-plans-booster-shot-for-sezs/1260163).
Infrastructure for the pharma sector needs a desperate facelift, to put it mildly. Our stories in the Infrastructure Special (pages 24-33) analyse the issue from various perspectives.
Faced with decreasing margins in the past few years, most pharma companies have cut budgets for plant upgradation. This neglect has unfortunately resulted in a mindset that is far more detrimental to regulatory compliance than outdated machinery. The lead story ‘Restructuring infrastructure’ (pages 24-27) makes the point that though the fear of both reputation and revenue loss has of late spurred some capital expenditure on infrastructure upgradation, changing mindsets will take longer. Functional heads who have turned the blind eye so far to plant operators cutting corners, especially those that result in ‘savings’, will now have a hard time explaining why rules and guidances need to be followed, in both letter and spirit.
While there are no quick fixes for so deep seated a problem, there are a few steps that the PM can take which will at least give the sector some incentive to weed out the faulty practices and invest in change. ‘Clustering for comfort’ (pages 28-29) analyses how the proposed Cluster Development Programme for the Pharma Sector (CDP-PS), which is being presented as a better alternative to the SEZ model, can revive the sector albeit with a few more tweaks.
For instance, small and medium enterprises (SMEs) are acknowledged as the backbone of any sector and this is true of pharma as well. The BJP election manifesto does give SMEs their due. It considers the role of SME sector as crucial for the economic development of our country and goes on to mention some of the facilities which need to be provided for its development. Many of these resonate with the wish lists of pharma SMEs (Lending a helping hand, pages 30-33). As always, the suggestions put financial incentives at the top of the wish list, but once there is a will, there are always ways to work out a compromise.
Here’s hoping that unlike previous years, the pharma sector’s hopes are not as fleeting as shooting star.