Workers of the Indian Medicines Pharmaceutical Corporation Ltd (IMPCL) are strongly opposing the Union Government’s move to sell its stake in the profit making mini-ratna PSU.
By Groundxero
Dec 02, 2023
The Government of India intends to disinvest its entire stake in Indian Medicines Pharmaceutical Corporation Ltd (IMPCL) through strategic disinvestment with transfer of management control to a private player. The government had issued a global invitation for expressions of interest (EoIs) for the proposed strategic disinvestment of its entire equity shareholding in IMPCL. Mankind Pharma and Baidyanath Ayurveda are among the companies that have submitted EoIs to acquire 100% of the government-owned Ayurveda company, according to sources in the know. Other bidders include a private equity fund and an asset reconstruction company.
Employees of the Almora-based IMPCL — the only central public sector enterprise in Uttarakhand involved in the manufacturing of Ayurvedic and Unani medicines – are opposing the disinvestment in the company. Kishan Sharma, president of IMPCL Theka Mazdoor Kalyaan Sangh said, “On one hand the government talks about promoting ayurveda and yoga, and on the other hand it is preparing to sell its only company manufacturing ayurvedic medicines.”
IMPCL, located in the valley of Uttarakhand hills in Jim Corbett National Park corridor, was established in 1978 with an objective to manufacture and market genuine as well as efficacious Indian system of medicines. The company currently manufactures 656 classical Ayurvedic, 332 unani and 71 proprietary Ayurvedic medicines for a varied spectrum of diseases. It supplies Ayurvedic and unani medicines to all the states under the National Ayush Mission (NAM) and 6,000 centers of Jan Aushadhi Kendras, which are fair price government-owned medical stores.
The government of India holds a 98.11 per cent stake in IMPCL, and it is under the administrative control of the Ministry of Ayush. The remaining 1.89 per cent is held by Kumaon Mandal Vikas Nigam Ltd (KMVNL), an undertaking of the Uttarakhand government.
The price/rate of IMPCL products are fixed by the union government. “Liberalized pricing policy post disinvestment combined with already laid down distribution network & payment collection mechanism may enable the company to compete with other market players more efficiently that may lead to increased sales and profitability,” The Department of Investment and Public Asset Management (DIPAM) had said while inviting EoI.
As of March 31, 2022, the company had a paid-up share capital of Rs 51.98 crore. The total area of IMPCL is 35.81 acres in Almora, Uttarakhand. IMPCL has been a profit-making organisation since its inception. The profit before tax (PBT) of IMPCL was Rs 42.77 lakh during FY20, which rose to Rs 45.41 crore in FY22. The company had ₹250 crore of top line and a profit margin of around 25% in FY22.
In 2019, the Modi government attempted to sell this factory, but the process was halted due to protests from workers and the outbreak of COVID-19 pandemic. IMPCL employees and workers are opposing the move to sell off the company saying that it is a profit making company, and was set up in the backward area to boost employment generation for locals. The workers have termed the government’s decision as arbitrary and illegal and disinvesting in the company and privatising it will make its services suffer, they allege. Not only do hundreds of workers depend on this factory for their livelihoods, but farmers and others in the region also supply raw materials such as herbs, medicinal plants, cow urine, etc., sustaining their livelihoods, say the workers.
The Contract Workers Welfare Committee of IMPCL demonstrated at the IMPL factory gate on 28 November, 2023. The workers opposed the privatisation and demanded the payment of pending dues of 1.12 crore rupees for workers’ provident fund and regular employment for contract workers. The union submitted a memorandum to Prime Minister Narendra Modi and the factory’s management director. Heavy police force was deployed during the workers’ demonstration. The Contract Workers union said, “Workers have built this factory with their blood and sweat. It is the government’s responsibility to further develop this factory and provide regular employment to the workers. However, the government is adamant about selling it. In the past four years, the Modi government has already sold public assets worth more than 1.92 lakh crore rupees. IMPL is also now on the list for bidding in the market.”
Pic courtesy : Workers Unity
Speaking at the demonstration, the workers pointed out, “People come to work in this Ayurvedic factory from distant places. For the past 40 years, not only the livelihood of workers and employees depends on this factory, but thousands of people in the region supply various products to this factory and sustain their livelihoods.” The speakers further said that “migration from the hills in Uttarakhand has increased significantly. More than 1600 villages have become deserted. The privatisation of this factory will increase the number of Bhutuwa [deserted or ghost] villages. Therefore, the privatisation of this factory should be stopped under any circumstances.”
Regarding their future strategy, the workers said, “A workers-farmers panchayat will be held at the IMPL factory gate on December 4th at 11 am to devise the future course of the movement. They urged everyone to participate in this struggle.
(The above report is based on the press release issued by the Contract Workers Welfare Committee, IMPL, Almora)