Date:01/04/2005 URL: http://www.thehindubusinessline.com/2005/04/01/stories/2005040102700400.htm

Back Bank lending: Biotech cos seek priority sector status

Our Bureau

New Delhi , March 31

THE Department of Biotechnology (DBT) today proposed that bank lending to biotech companies should be categorised as priority sector lending.

Also, accepting a long-standing industry demand, it has proposed the formation of a National Biotechnology Regulatory Authority to streamline the regulatory approval procedures.

Additionally, the DBT has proposed a scheme for supporting small and medium-sized enterprises through grants extended by the Department of Biotechnology in 2005-06. As per the scheme — `Small Business Innovation Research Initiative' (SBIRI) — companies with up to 1,000 employees will be provided support in pre-proof of concept, early stage innovative research and problem solving support in addition to grant of soft loans.

Informing this to the media, the Minister of State (Independent Charge) for Science and Technology, Mr Kapil Sibal, said, "We invite comments on the draft from all stakeholders by May 15 following which we would finalise the biotech strategy."

Listing various fiscal and trade policy initiatives, the DBT — in its National Biotech Development Strategy draft — said that to encourage banks to lend and provide banking services to the biotech sector, a significant push through appropriate policy guidelines from the Reserve Bank of India is necessary. It also called for inclusion of international patenting costs under the 150 per cent weighted average tax deduction on R&D expenditure until 2010. It has also called for removal of Customs duty on raw materials imported into India where the finished product is imported duty-free.

The DBT has also pointed out that the present approval procedure of recombinant pharmaceutical products involves multiple regulators, lack of co-ordination, multiple ministries and over-lapping and duplication of responsibilities of these regulators. In this backdrop, it called for adoption of the procedural framework drawn up by the Mashelkar Committee (2004). "The recommendation of the Swaminathan Committee on regulation of agri-biotech products and of the Mashelkar committee on recombinant pharma products will be implemented in 2005," it said.

The authority should have separate divisions for agriculture products/transgenic crops, pharmaceuticals/drugs and industrial products; and transgenic food/feed and transgenic animal/aqua culture, according to the draft. It also aims to lay down new guidelines on transgenic research and product/process development in animal, aqua culture, food, phyto-pharma and environmental application by 2005.

As an interim measure, a special regulatory cell will be created by the DBT to build capacity in the country for scientific risk assessment, monitoring and management and forming international linkages, support bio-safety research, among others. "This cell will only have a promotional and catalytic role," said the DBT Secretary, Dr M. K. Bhan.

He added that the Indian Council of Medical Research (ICMR) and the DBT will meet on April 28 to work out procedures for conducting stem cell research. "We have decided to form one committee, with members from both the bodies, instead of duplicating the procedures," he said.