CHEMICALS
AND PETROCHEMICALS
|
The
Department of Chemicals and Petrochemical is entrusted with the
responsibilities of planning, formulating and implementing the policies
and programes for the development of Chemicals, Petrochemicals and
Pharmaceutical Sectors.
CHEMICALS DIVISION
Public Sector
The Department made a revival proposal of Hindustan Insecticides Limited (HIL) and
it referred to the BIFR as per the provisions of Sick Industrial
Companies (Special Provision) Act, 1995,
on erosion of its total net worth as on March 31, 2003. The
BRPSE has recommended the revival proposal in respect of HIL in
October,2005. The same is in the process of being placed
before the CCEA for approval.
The Department made a revival proposal
of Hindustan Organci Chemcials Limited (HOCL) and referred to the
BIFR in terms of the provisions of Section 15(1) of the Sick Industrial
Companies )Special Provision) Act, 1985. The net worth of the Company
has completely eroded as on March 31, 2004.
The revival proposal in respect of the Company was approved
by the Cabinet Committee on Economic Affairs in its meeting held
on March 9, 2006. The revival
measures are under implementation.
The Indian Chemical industry is undergoing a phase of rapid
modernisation. Indian companies are looking for new technologies
and manufacturing processes for improving their competitiveness
in the world market with reference to quality and production costs.
India is also looking for technology, machinery and equipment for
pollution control, waste management and environment management etc.
It is estimated that a very large number of units in the medium
and small scale sector require
up gradation, either in the manufacturing processes or in the management
systems process control equipment, instruments, automation systems,
energy conservation, and management equipment and systems are needed. In a meeting chaired by the Minister (C&F)
with the industry, to deliberate on the strategy to be adopted for
developing the chemical industry in the new millennium, it was suggested that an international conference
and exhibition to showcase the strengths of Indian industry be organised to provide a forum for interaction with the
foreign companies. Accordingly,
the Department had set up the first such event in the year 2000. This was called ‘India Chem 2000’ and it was
decided to organise this event every two years thereafter.
The
Department of Chemicals and Petrochemicals and FICCI had set up
India Chem events to provide a platform for interaction between
the Indian and foreign companies.
The first event, ‘India Chem 2000’, was held in October,
2000. USA was the partner
country for this event. From
India and abroad, 305 companies participated in this event. Major foreign participation was from USA, UK,
Germany and Thailand.
The next
event ‘India Chem 2002’ was held in New Delhi from September 18-21,
2002. Maharashtra was the partner State and Germany
was the lead country for the event. India Chem events are more or
less established as a major international event in the chemical
sector in this part of Asia. The
fact that 79 companies from 13 countries participated in ‘India
Chem 2002’ is an expression of the importance that foreign companies
attach to this show. These events are organised every two years.
‘India Chem
2004’ was held at Mumbai from November 3-5, 2004. It was quite a
successful event. The highlights
of India-Chem 2004 were:
Ø
Overall 255 companies participated in the event, with 102 companies
from overseas participating.
Ø
Visitors from over 50 countries attended the show and exhibitors
came from USA, UK, China, Germany, Iran Switzerland, Belgium, France,
South Africa, Taiwan etc. (16 countries).
Ø
Japan was the partner country and 32 Japanese companies participated
in the event. Germany was
the Guest country and 20 German companies participated in the German
Pavilion.
Ø
Buyer delegations came
from UK, Germany, Japan, Taiwan and China.
Ø
Buyer Seller Meets
were organized by Chemexcil and PPMAI.
About 41 overseas buyers attended these meetings.
Ø
The Buyer Seller Meet organized by Chemexcil focused on Latin
American, African and ASEAN countries.
Foreign delegates from Argentina, Uganda, Malaysia, Brazil,
Sudan, Phillipines, Colombia, South Africa and Indonesia participated
in the Buyer Seller Meet. Foreign
journalists from Phillipines, South Africa, Sudan and Uganda also
participated. There were 114 Indian participants in this
meet.
Ø
Business-generated-on-spot was worth Rs.250 crores. Anticipated orders
would be much higher.
The
next India Chem event will be held from November 8-10, 2006, at Mumbai. Italy has already agreed to
be the Partner Country and Japan will be the Guest country for this
event.
Neem Project
The
Department is implementing a project for development of safe and
environment friendly pesticides utilising the neem seeds.
A country programme, entitled “Development and Production
of neem Products as Environment Friendly Pesticides”, has been undertaken
by the Department of Chemicals and Petrochemicals with the financial
assistance of United Nations Development
Programme (UNDP) / United Nations Industrial development
Organisation (UNIDO). The objective of this programme is to promote
production, processing and use of neem based products, thereby aiding
waste land development, generating rural employment (especially
for women) and providing farmers with eco-friendly / biodegradable
pesticides.
This
project was implemented at two locations namely at Nimpith, West
Bengal through Vivekanand Institute of Biotechnology, and at Nagpur,
Maharashtra through Neem Foundation.
The results of the first phase were encouraging . There is good participation of rural women in
this programme with work relating to
collection and depulping of neem fruits. The neem based pesticide
is presently being used
on vegetable crops (esp. tomato, beetle leaves and other vegetables)
, which are the main crops in the command area of the project. As
a result of this, the farmers have adopted the same and in the current
season the results are impressive. The first phase of the programme came to a close on May 31, 2005, and the next
phase is being worked out. As a result of this project, the farmers
would be in position to prepare and use environment friendly pesticides
from neem. This would, to a large extent, help is solving the problem
of chemical pesticides residues in food items as also provide inexpensive
pesticides to the farmers.
As part of
the project plan, two regional and a National level workshops were
organised. These provided
a good opportunity for bringing the developments that have taken
place under this project to the notice of the stake holders and
also the industry which could possibly participate in spreading
the use of the technology development under this programme.
Phase II
of the project is presently under finalisation. During this phase,
the activities of the project are sought to be continued and further taken to areas
impacted by heavy use of
chemical pesticides including
Tea/Coffee/Spice plantations etc. especially in the
NE region, in addition to continuing the activity through
the present locations.
Mega Chemical
Industrial Estate
The
Chemical and Petrochemical industry occupies an important place
in India’s economy constituting around 14 per cent of India’s industrial
production. Exports from this sector constitute 10.7 per
cent of the total exports from the country.
By its very nature, the chemical and petrochemical industry
require certain basic infrastructural facilities, including a good
port, chemicals storage terminal, adequate berthing facilities,
a common effluent treatment plant and most important effective green
belt to segregate the industrial units from human settlements.
At present
each unit has to create specialised
facilities on its own, which leads to duplication of effort
and investment, which is a national loss.
If related industries are set up in close proximity in an
industrial estate, they could be vertically integrated resulting
in a saving on the transfer cost of feedstock and finished goods.
This, coupled with lower investment on infrastructure as
a result of sharing, would tremendously improve the cost competitiveness
of the Indian products in the world market.
Action
has been initiated for preparing a feasibility report on setting
up such a mega chemical industrial estates.
This task has been entrusted to M/s Mott MacDonald, renowned
international consultants. It
is envisaged that the MCIE will be developed in a public private
partnership mode with private investment, which could be both domestic
and foreign. As part of the study, the Consultants have since submitted the Concept
Paper, the Inception Report, the Market Study Report, Location Study
Report as also Project Cost Reports. The Market study indicates
that the MCIE needs to come up with a large petrochemical complex
as the anchor industry. The demand and supply scenario of the petrochemical
products in the country, also indicates scope of setting up of a
number of large cracker units.
After
the current phase of the study, which includes the pre-feasibility
studies, the Department would be taking action for marketing these
estates with the potential developers and anchor companies worldwide.
The marketing efforts will include organisation of road shows in
different parts of the world with possibilities of flow of FDI into
the chemical sector into India. Final feasibility report is expected to become
available by July,2006. The findings of study will be brought to
the notice of Industry and the State governments for follow up action.
In the meanwhile,
a Task Force on Petroleum, Chemical and Petrochemical Investment
Regions (PCPIR) has also been constituted in the Prime Minister’s
Office on January 20, 2006, in order to enable quick and coordinated
decision making and to provide an appropriate policy framework for
the development of investment regions of requisite scale and level
of facilities, with the involvement of world class developers and
investors, in the field of petroleum, chemicals and petrochemicals.
This Task Force will also finalize the number and location
of PCPIRs.
Bhopal Cell
The
process of disbursing the compensation to victims of Bhopal Gas
Leak Disaster started in October, 1992.
In all 10,29,516 claim cases were received, which were decided
by the year 2002. A total compensation of Rs.1,545.46 has been
awarded in 5,74,019 cases, out of which an amount of Rs.1,543.30
crore has been disbursed to 5,72,555 claimants till March 31,2006. The remaining over 4.55 lakh cases were rejected. However, some
appeals and revision petitions are still pending. After deciding all the cases, it was observed that an amount of
Rs.1,503 crore (approximately) was still lying unspent with the
Reserve Bank of India. For
this amount, the Supreme Court in its order dated July 19, 2004,
directed the Welfare Commissioner to disburse the same to the victims
whose claims have been settled, on pro-rata basis.
The Welfare Commissioner submitted an action plan in August,2004,
in the Supreme Court for its approval.
The Supreme Court considered the action plan submitted by
the Welfare Commissioner and approved the same vide its order dated
26th October,2004. The Supreme Court also directed the Welfare Commissioner to start
the disbursement of pro-rata compensation with effect from November
15,2004, and to complete the
disbursement process by April 30,2005, which was subsequently extended
by the Supreme Court for a period of one year, i.e. up to
April 30, 2006. As
on May 6, 2006, a sum of Rs.1,482.06 has been disbursed among the
5,53,314 claimants, as pro-rata compensation.
PETROCHEMICALS DIVISION
Central Institute of Plastics Engineering & Technology
(CIPET)
During the year 2005-06, the Government approved setting
up of three new Central Institute of Plastics Engineering &
Technology (CIPET) Centres at Jaipur, Panipat and Aurangabad in
the States of Rajasthan, Haryana and Maharashtra, respectively,
at a cost of Rs.21.50 crore each, which will be shared equally by
the Central Government and the State Governments. The implementation
period of the projects is three years from the date of Government’s
approval. These Centres will help in providing technically trained
manpower in various disciplines of Plastics Engineering and Technology
to the plastics and allied industries and provide technical/consultancy
services to these industries.
The
Government of India signed an Agreement with Organisation of Petroleum
Exporting Countries (OPEC) Fund authorities during the year 2005-06,
for an amount of US $ 12.30 million for capacity building of CIPET
in thrust areas at various CIPET Centres which are located in different
States of the country. The loan will be utilised for procuring plant
and machinery to provide the State-of-art technology for training/educating
the aspiring students in the field of Plastics Engineering and Technology
and to provide infrastructural facilities like Hostels for Women
candidates.
Assam Gas Cracker Project
A Memorandum
of Settlement was signed between Central Government and All Assam
Students Union (AASU) and All Assam Gana Sangram Parishad(AAGSP)on
August 15, 1985. Clause 7 of the Settlement states that the Government
takes this opportunity to renew commitments for the speedy all round
economic development of Assam, so as to improve the standard of
living of the people. Special emphasis will be placed on education
and science and technology through Establishment of National Institutions.
The Assam Gas Cracker Project was initiated in pursuance of this
clause. Earlier, M/s Reliance Industries Ltd;(RIL) and Assam Industrial
Development Corporation (AIDC) were to implement this Project.
The Ministry
of Finance suggested that since a huge amount of subsidy to a private
party is involved it would be better if some government PSU takes
this responsibility. Finally, after a long gap of about 20 years,
it was decided that instead of RIL, GAIL India Ltd. will be the
lead promoter, under an equity arrangement of GAIL: 70 per cent
OIL: 10 per cent, NRL: 10 per cent and Assam Industrial Development
Corporation (government of Assam): 10 per cent to implement this
Project.
The Cabinet
Committee of Economic Affairs on April 18, 2006, has approved the
Assam Gas Cracker Project. Necessary follow up action to implement
this Project is being taken by this Department in consultation with
the Ministry of Petroleum and Natural Gas, Planning Commission,
State government of Assam, and GAIL India Ltd.
Highlights
of the project, as approved, are:
Ø
Implementation of the Assam Gas Based Cracker Project at Lepetkata
with GAIL (India) Ltd as the main promoter, under an equity arrangement
of GAIL: 70 per cent OIL: 10 per cent, NRL: 10 per cent AND Assam
Industrial Development Corporation (Government of Assam): 10 per
cent with a project cost of Rs. 5,460.61 crore (fixed cost). Department of Chemicals & Petrochemicals would monitor the progress
of implementation of the project as well as accrual of socio-economic
benefits.
Ø
Grant of capital and feedstock subsidies, which are to be considered
under an assumption of Internal Rate of Return of 10% at constant
prices, Debt: Equity ratio of 2:1 and polymer pricing of Rs. 40,000,00
PMT at constant prices.
Ø
Capital Subsidy for Rs. 2,138 crore for the project on fixed
cost basis (phased during construction period of 5 years at constant
prices), which will be sought by Department of Chemicals & Petrochemicals
from Ministry of Finance/Planning Commission by way of additional
budgetary support.
Ø
Feedstock subsidy for Rs. 908.91 crore for the project spread
over 15 years operation period (beginning from 6th year
and continuing up to 20th year) at constant prices, which
will be sought by Department of Chemicals & Petrochemicals from
Ministry of Finance/Planning Commission by way of additional budgetary
support.
Ø Exemption
from Central Excise duty on products manufactured in the plant for
a period of 10 years from the year of operation.
Ø Exemption
from Income Tax, for a period of 10 years from the year of operation.
Ø Review the
pricing of feedstock to be supplied for the project every 5 years
from the date of production.
Ø Ministry
of Petroleum and Natural Gas to ensure firm arrangements for the
availability of Feed Stock for 15 years of Plant Operation with
the concerned oil companies.
National Policy on Petrochmemicals
Petrochemicals
Industry is an important industry in the manufacturing sector. The
Government of India constituted a Task Force on Petrochemicals vide
Resolution dated December 4, 2000.
The Task Force, headed by Shri .G.V. Ramakrishna, submitted
its Report in April 2003. The Task force on Petrochemicals has identified
the the directions and broad countours of the national vision in
the petrochemical sector. To give concrete shape to the recommendations
of the Task Force, it was felt that a National Policy on Petrochemicals,
containing specific policy initiatives, should be evolved. The formulation of National Policy on Petorchemicals was identified
as the thrust areas by the Prime Minister Office.
The National
Common Minimum Programme (NCMP) of UPA Government’s identified six
basic principles of governance.
One of which is to ensure that the economy grows at at-least
7-8 per cent per year in a sustained manner over a decade and more
and in a manner that generates employment so that each family is
assured of a safe and viable livelihood.
The Draft
National Policy on Petrochemicals was restructured keeping in view
the NCMP. The policy aims to:
Ø
increase investment in the sector and capture a slice of the
resurgent Asian demand in polymers through additions in capacity/production
by ensuring availability of feedstock at internationally competitive
prices, creating infrastructure, rationalising tariffs & taxes
and promoting exports;
Ø
increase the domestic demand and per capita consumption of
plastics and sysnthetic fibres from the present 4Kgs and
1.6 Kgs respectively to about 12 Kgs and 4 Kgs respectively by 2011
by increasing the use of petrochemicals in thrust areas;
Ø
Increase the competitiveness and polymer absorption capacity
of the domestic downstream plastic processing industry by modernizing
and technologically upgrading it and freeing it from structural
constraints; and
Ø
Achieve environmentally sustainable growth through innovative
methods of plastic waste mangement/recycling and development of
bio/photodegradable polymers and plastic.
Ø
The Cabinet Note on National Policy on Petrochemicals was considered
by the Cabinet in its meeting
held on February 23, 2006, and directed that the matter be considered,
in the first instance, by the Committee of Secretaries, to integrate
the viewpoints of various departments and build in requisite focus
for sustainable growth of the sector.
Ø Committee
of Secretaries (COS) considered the document on March 13, 2006 and
suggested modification and reformulation of the National Policy
Document. The reformulated document is under examination
by a three member committee constituted by the Cabinet Secretariat.
PHARMACEUTICAL DIVISION
The 2nd meeting of Indo-Tunisia
Joint Working Group on Drugs and Pharmaceuticals was held in Tunis
in April 2005, in which certain important decisions like formation
of Joint Ventures in Drugs and Pharma Sector, Cooperation in using
testing facilities at NIPER and MOU between Pharmexcil and Tunisian
Drug Industries of Tunisia.
During
the 3rd meeting of Indo-Tunisian Joint Working Group
on Drugs and Pharmaceuticals held on November 30, 2005, at New Delhi
it was decided to have partnership between the two countries on
development of new molecules, technology transfer, Joint ventures,
exports and other related areas.
India-Africa-ASEAN-GCC Pharma and Health Conference was held on December
1-2, 2005, at Hyderabad (AP) for giving business opportunities for
expansion of Indian Pharmaceuticals and drugs and health care sectors.
During
India CIS International Pharma Conference held at Mumbai in March
2006, this Department made representation covering over-view of
Indian Pharma industry, statistical information on Pharma exports
to CIS, problem areas and areas of cooperation for consideration.
The foreign participants were exposed to the Indian Pharma industry
developments, especially quality aspects apart from low costs. During
the Conference, the buyers sellers meet was effective. There was
also an exhibition put up by the Indian Pharma exporters represented
by various companies.
Hindustan Antibiotics Limited (HAL), Pimpri, Pune
Finance
Minister in the Budget Speech of 2004-2005 announced financial support
for the restructuring of the company.
Cabinet Committee on Economic Affairs(CCEA)
has approved the Rehabilitation Scheme of the company on March 9,
2006.
The rehabilitation Scheme inter alia involves
the following:-
|
S. No.
|
Particulars
|
Amount(Rs.
in crore)
|
|
1.
|
Cost
of the scheme
|
137.59
|
|
2.
|
Write
off/exemptions from Government of India
|
267.57
|
|
3.
|
Sacrifices
by Banks, financial institutions and PSUs
|
103.34
|
|
4.
|
Waiver
of compound and penal interests by ONGC
|
Not
quantified
|
|
5.
|
Waiver
of interests and penalties on arrears of the Sales Tax by
Maharashtra Government
|
Not
quantified
|
|
|
Total
|
508.50
|
Department has released Rs. 13.90 crore to HAL on March 28, 2006,
as interest free non plan loan for meeting expenditure towards statutory
dues(PF) as one of the components under Rehabilitation Scheme.
Action has been initiated
to release the balance amount to HAL.
Review of Pharma Policy
The National
Common Minimum Programme, envisages that the UPA Government will
take all steps to ensure availability of life saving drugs at reasonable
prices.
The Government
constituted a Committee, under the Chairmanship of Joint Secretary
(Pharma), to examine the issue of span of price control (including
trade margin). Subsequently,
a Task Force under the Chairmanship of Dr. Pronab Sen, Principal
Advisor, Planning Commission, was also constituted to explore options
other than price control to make available life saving drugs at
reasonable prices.
Based on
the recommendations of the Committee under the Chairmanship of Joint
Secretary (Pharmaceuticals) and the Task Force under the Chairmanship
of Dr. Pronab Sen, Principal Advisor, Planning Commission and feedback
from other stakeholders, the Government have formulated a draft
National Pharmaceutical Policy, 2006,
which has been circulated to various stakeholders seeking
their comments. Based on
the comments received the Government is likely to finalise the new
Policy shortly.
Bi-Lingual labeling of medicines
Based
on the decision taken in the Pharmaceutical Advisory Forum in its
meeting held on February 11, 2006, this Department has requested
to various Pharmaceutical Industry Associations to print the name,
price, date of manufacturing and expiry on medicinal labels in Hindi
also. No formal notification/order
has been issued in this regard.
MRP Inclusive
of all Taxes
Based on
the decision taken in the Pharmaceutical Advisory Forum in its meeting
held on February 11, 2006, this Department has circulated a Draft
Notification regarding printing of prices of all medicines inclusive
of all taxes to various Pharmaceutical Industry Associations and
other stakeholders seeking their comments.
It is proposed that this may be implemented w.e.f. July 1,
2006.
Pharmaceutical
Advisory Forum
The Government
has constituted a Pharmaceutical Advisory Board vide OM dated the
July 26, 2004, to help realise the objectives of the Drug Policy
and to have meaningful dialogue amongst all the stakeholders on
various issues concerning the drug policy.
The First
meeting of the Pharmaceutical Advisory Board was held under the
Chairmanship of Hon’ble Minister (C&F&S) on February 11,
2006. There was wide participation from the States/UTs
Drug Industry Associations, Chemists
Associations, NGO’s etc.
Repeal of the Drugs (Control) Act, 1950
To repeal
the Drugs (Control) Act, 1950 was identified as one of the Thrust
Areas by the PMO. The Bill to repeal the Drugs (Control) Act, 1950
has been introduced in the Lok Sabha and it is likely to be considered
and passed during the current Budget Session of Parliament.
New Pharmaceutical Policy 2006
The new Pharmaceutical Policy 2006
is to be announced based thereon a new Drugs (Prices Control) Order
will be promulgated and follow up action will be intimated on the
decisions announced in the new Policy.
*****
