Cabinet To Debate Idpl Closure Today

A stormy meeting of the Union cabinet is expected today when the highly contentious proposal to close down all the units of the state-owned Indian Drugs and Pharmaceutical Ltd (IDPL) comes up for discussion.

Communist Party of India leader and Union agriculture minister Chaturnanan Mishra has denounced the ministry of chemicals proposal to close down the units of the pharmaceutical giant on the ground that this would have a disastrous impact on the government health services.

Remember the days when plague broke out in Surat? IDPL was entrusted by the government to make medicine on a large scale at a no-profit, no-loss basis and it did a commendable job in containing the epidemic, Mishra told Business Standard when asked how he would react to the cabinet proposal to close down the IDPL units.

 

Mishra argued that the utility of IDPL would be felt only in its absence. It would be difficult to tackle epidemics like kala azar, malaria, and plague as the prices of the basic drugs would soar. The closure of IDPL would also increase the healthcare budgets of the cash-strapped states, he added.

The chemical ministrys proposal to close down IDPL has the full support of the finance ministry, which is already under strain having already provided over Rs 1000 crore for the revival of six sick PSUs during the just concluded financial year. The proposal is to either lease out the assets of the company or make an outright sale to private companies. These ministries claim that the IDPL units are not competitive in terms of product quality and price, which has seen the PSU giant log losses of Rs 250 crore which are clearly unsustainable.

In its recent study on the status of the three IDPL units, Ferguson had observed that the Hyderabad unit could rake in a profit of Rs 20 crore in the first year itself provided Rs 5 crore was invested in it, Mishra said. Mishra added that the report had indicated that an investment of Rs 14 crore could turn around the Gurgaon unit.