Dr Neeraj Mittal, MD & CEO, Guidance, Industries Department, Government of Tamil Nadu showcases how the State is an ideal investment destination for pharma and life sciences companies with a strategic location, conducive business ecosystem, advanced infrastructure and good governance. He also informs that the state has announced a special incentive package for manufacturing of essential drugs and medical equipment which offers a 30 per cent capital subsidy up to Rs 20 crores, 100 per cent stamp duty waiver, six per cent interest subvention for loans for two quarters, purchase of 50 per cent of the manufactured products by Tamil Nadu Medical Services Corporation, in an exclusive interaction with Lakshmipriya Nair
Tell us about the investment in Tamil Nadu over the past three to four months. What initiatives did the state take to attract investments given the challenges posed by the pandemic?
The Tamil Nadu Government constituted a 16-member Special Investment Promotion Task Force headed by the Chief Secretary to attract companies that are diversifying their investments globally to reduce dependency on single sources.
Tamil Nadu also established a high-powered Special committee, under the able leadership of C Rangarajan, the 19th Governor of The Reserve Bank of India for the economic revival of the state. The committee is advising on the short-term and medium-term responses to mitigate the economic impact of COVID-19.
In addition, an empowered committee was constituted to resolve regulatory bottlenecks. These include a direct CTO scheme for green industries and deemed approvals for land use re-classification in non-plan areas. Due to such de-clogging and sustained efforts, we signed 41 memorandums of understanding (MoUs) with an investment potential of Rs 30,664 crore and employment opportunities for 67,212 people during April to June 2020.
Tamil Nadu is a leading industrial hub in India. Can you give us an overview of the pharma and life sciences sector in the state?
We are India’s most industrialised and urbanised state and second-largest by GDP. The state has historically grown faster than the national growth rate and has the largest number of factories in the entire country. We consider pharma and life sciences a sunrise sector given its high growth rate and available opportunities. Tamil Nadu currently houses more than 400 companies specialising in bulk drugs, formulations, surgicals and medical devices.
We have the manufacturing presence of major pharma players such as Sun Pharma, Trivitron, Biocon, Mylan, Caplin Point, TTK Healthcare, Apex Pharma, Fourrts, etc. The state’s output in the sector is more than $1.1 billion, and the value of exports is almost $500 million. It is one of the leading states in surgicals and medical devices exports. There are more than 80 high-quality institutes offering a range of pharma and biotech degrees and diplomas, ensuring the availability of skilled manpower. We also have a well-developed start-up incubation ecosystem led by IIT Madras, Anna University, and Tamil Nadu Agricultural University in the pharma sector.
What are the state’s plans to harness the growth potential in the pharma and life sciences sector? Can you brief us on the most important initiatives/measures taken by the state for the growth of this industry?
Pharma and life sciences industry has had a double-digit growth even during the pandemic. The state’s exports in this sector witnessed a year-on-year growth of more than 20 per cent. Tamil Nadu offers a rich ecosystem, last-mile connectivity, port logistics, and supply of high-quality workforce to its investors. The State has an excellent Industrial Policy offering structured incentive packages for large investments and a biotechnology policy offering incentives for bio-parks, access to venture capital for start-ups, and other special subsidies.
One of the recent initiatives, to augment the manufacturing capabilities of the state, has been the announcement of a special incentive package for the manufacturing of essential medical equipment and drugs. The package offered a 30 per cent capital subsidy up to Rs 20 crores, 100 per cent stamp duty waiver, six per cent interest subvention for loans for two quarters, purchase of 50 per cent of the manufactured products by Tamil Nadu Medical Services Corporation.
How is the state creating development areas? What are the infra and logistics facilities that the state offers to the pharma and life sciences industry?
Tamil Nadu has four large seaports and four international airports. It is well connected through a vast road and rail network. It is a power surplus state with a good and reliable transmission and distribution network. There are currently 23 industrial parks including seven Special Economic Zones (SEZs) covering more than 33,000 acres in 15 districts. To decentralise industrialisation and to promote balanced growth in the State, SIPCOT is initiating new industrial parks in the southern districts viz., Ramanathapuram, Dindigul, Theni, Virudhunagar, Thoothukudi, and Tirunelveli covering more than 11,000 acres.
We have well-developed pharma and life sciences manufacturing clusters in Chennai (Alathur, Irungattukottai, TICEL Biotech parks, etc.) and Krishnagiri (Hosur) region. A more than 1000-acre dedicated pharma park in Cheyyar, a 330-acre Medipark in Chengalpattu, and a Bio Park in Coimbatore by TICEL will soon be ready for investors.
What are the various steps that Tamil Nadu is currently pursuing to improve the ease of doing business in the State?
We have set a high standard for ourselves at Guidance, which is “Open 24”. We work and are accessible 24 hours a day, available for investors 24×7, so an investor can simply walk in without an appointment, and we strive to get back on any query within 24 hours. The state’s single window system was launched back in 2017 and currently, 36 services are covered under the system. We aim to make the entire G2B (Government to Business) interface contactless and paperless. By May next year, we will have an additional 200 services under the new single-window portal.
The state has also launched a unique online helpdesk dedicated to industry – “Biz Buddy”. It is the industry’s true friend and it enables companies to electronically submit their issues through a user-friendly interface, track issues, and get it resolved in a time-bound manner in 30 working days. We have reduced the resolution time to under two weeks for issues pending for several months.
How is the industry being involved in drafting key reforms/policies? How does Guidance act as a facilitating platform for collaborations between industry and policymakers?
A strong industrial ecosystem requires close collaboration between industry and government institutions. Because of the ongoing pandemic, this collaboration is required more than ever not only to navigate the crisis but also to develop policy interventions and explore emerging opportunities. We have a team of more than 50 young and energetic personnel, organised based on industry sectors. Guidance participates in various events such as Auto Expo, Defence Expo, [email protected], and other major sector-specific events. Furthermore, the team is in constant touch with companies, industry associations, trade associations, industry councils, etc. These interactions and discussions enable a better understanding of industry pain points and needs.
Our most recent industry outreach initiative has been the organization of CXO Round Tables. In the last one month, we have organized four CXO Round Tables with the most recent one being for the Pharma & Life Sciences sector. The discussion at the Pharma & Life Sciences CXO Round Table focussed on various eco-system elements such as – Infrastructure, Policy & Incentives, Skill Development & Human Resources, R&D and Innovation, Regulatory Support – for boosting the existing ecosystem in the state.
Can you give us an update on the new industrial policy, and share some insights into the new policy?
We are in the process of developing a forward-looking industrial policy based on industry consultations and benchmarking against national and global trends. We shall have a special emphasis on the availability of suitable infrastructure for faster setup and skill and talent development to ensure abundant availability of productive workforce. The policy shall offer specific higher incentives for sunrise sectors that will define our industrial growth in the next decade. I believe the new policy will be able to attract a new wave of hi-tech investments into the State that will lead to higher-value jobs and economic growth and progress.