The government on Friday brought under its direct control Karnataka Antibiotics & Pharmaceuticals Ltd (KAPL) and Rajasthan Drugs & Pharmaceuticals Ltd (RDPL)?the subsidiaries of Hindustan Antibiotic Ltd and Indian Drugs & Pharmaceuticals Ltd respectively. The move is aimed at helping the firms upgrade manufacturing facilities.
KAPL is a joint venture between Hindustan Antibiotics Ltd (HAL) and Karnataka State Industrial & Investment Development Corporation, while RDPL is a JV of Indian Drugs & Pharmaceuticals Ltd (IDPL) and Rajasthan Industrial Development Investment Corporation.
The Cabinet, at a meeting held here, approved transfer of HAL?s equity share in KAPL to the President of India and an additional investment of Rs 7.10 crore. At the same time, IDPL?s equity in RDPL would be transferred to the President along with Rs 2 crore capital infusion.
Briefing the media after the cabinet meeting, Union Minister for Science and Technology Kapil Sibal said that to help KAPL and RDPL in their upgrade plans ?both companies have been (brought) under the direct control of the central government.? Both KAPL and RDPL are profit-making companies whereas their holding companies, HAL and IDPL, are sick. The parent firms are not able to support the companies in their upgrade, expansion and modernisation plans, Sibal added.
After the transfer of equity shares, the equity of the central government and Karnataka in KAPL would in the ratio 59:41, while in RDPL, the ratio of the central and state government stakes will also be 51:49. Bangalore-based KAPL is planning to set up a Cephalasporin plant and upgrade its facilities at an estimated expenditure of Rs 22.45 crore. RDPL requires Rs 8.75 crore for modernising and upgrading its manufacturing plant in Jaipur.
The equity base of both KAPL and RDPL is too low to enable them to raise additional loans from banks and financial institutions, Sibal said. The decision would also help KAPL and RDPL to grow and stay competitive as also cater to the people?s requirements and provide good-quality medicines at reasonable rates, he added.
The centre also decided to revise the royalty rates payable to states for streamlining the mining of uranium, a strategic and scarce mineral. The states would now be paid royalty on uranium mining on an ad valorem basis, equivalent to 2% of compensation received by Uranium Corporation of India Ltd (UCIL).
While the government is working on a proposal for revising royalty rates for all minerals, a considered decision has been taken to enhance the royalty rates of uranium immediately, as uranium is a strategic mineral whose mining is restricted to the public sector, Sibal said.
Sibal said that the government has taken several initiatives to streamline the exploration and mining of uranium. Fair compensation to states for scarce reserves mined in their jurisdiction is one of the issues to be settled by the Centre.