Indian state unveils Millenium Biotech Policy II

Karnataka Government on December 9, 2009, unveiled its Millennium Biotech Policy II, which replaces the earlier policy statement issued in 2001. The new policy lists the progress made since then and also outlines steps to further spur the development of the biotechnology industry and harness its benefits for the common citizen in the years to come. As a focus area, the policy makes special commitments in the area of biofuels. The State of Karnataka, India, has joined the international movement to go green. The state has set a goal to meet 20 percent of its fuel needs from biofuels by 2020.

The state together with the Government of India has proposed to set up a Bio IT park in the Institute of Bioinformatics and Applied Biotechnology (IBAB) campus on a PPP model with an investment of Rs 20 crore (about $4.28 million). The Bio IT facility will be a hub for both IT and life sciences organizations, research institutions and academia.

In a step towards improving the quality of human resources for the biotechnology sector, the government will promote 10 biotech finishing schools selected by the Association of Biotechnology Led Enterprises (ABLE) and the Vision Group on Biotechnology with the government financial support of Rs one crore (about $0.21 million) per finishing school.

According to Mr Ashok Kumar Manoli, Principal Secretary, Information Technology and Biotechnology, Karnataka, “The concessions to the biotechnology companies including the tariffs in the state is likely to amount to a minimum of Rs 400 crore (about $85.64 million).”

Among the new concessions offered by the new policy, which was formulated by the Vision Group on Biotechnology, is the waiver for biotech research and development units from approvals by the State Pollution Control Department. The policy also offers agri-biotech companies greater freedom to conduct field trials. They will be facilitated in acquiring tillable agricultural land to the tune of 15-20 acres. This will solely be for companies performing agri-biotech related research and will be in the form of a 35 year lease.

Among the fiscal incentives on offer are interest-free loans from the government for paying value added tax, and subsidies for registration of patents, power and water. Moreover, biotech units will also be eligible for subsidies to meet expenses incurred for standardization certification. Apart from these exemptions, biotech units will also be eligible for other benefits that are provided for industries on terms set in the state industrial policy. The policy sets to establish five specialized biotech parks in Mysore, Mangalore, Dharwad and Bidar, apart from the Bangalore Helix Park that is under construction. The government would invest Rs 100- 150 crore (about $21.40-32.11 million) in each of the facilities.

The government would also establish a Bio Venture Fund with a corpus of Rs 50 crore (about $10.70 million) in partnership with a professional venture capital firm. Only certain hi-tech areas with a strong social relevance such as transgenics, stem cell biology and biomanufacturing would be eligible for funding. The government will have 26 percent stake in the proposed fund and the balance 74 percent will come from financial institutions or VC firms. Also on the agenda is the creation of a fund to commercialize research findings. The Karnataka State Government will set apart a corpus fund of Rs 15-20 crore (about $3.21-4.28 mn) which will be used to issue grants in Rs 10-29 lakh (about $0.021-0.062 mn) range in each case.