Report of the Committee on Drugs and Pharmaceutical Industry


On February 8, 1974, the Ministry of Petroleum and Chemicals, government of India, set up the Committee on Drugs and Pharmaceutical Industry, under the chairmanship of Jaisukhlal Hathi (a former member of parliament from the Hallar constituency in the then Bombay Presidency, and a former member of the Constituent Assembly).

The committee was set up to address the government’s concerns about the growing drugs and pharmaceutical industry in India. Questions about the performance of the public sector, the increasing influence of multinational firms in the field, the prices of locally produced medicines, among others, had been raised in Parliament.

Its tasks included enquiring into the progress of the drugs and pharmaceutical industry; recommending measures to ensure that the public sector can lead in the manufacture of basic drugs and formulations, and in research and development; making recommendations to promote the rapid growth of the drugs industry, particularly for Indian and small-scale industries, keeping in mind the need for a “balanced regional dispersal in the industry.”

The committee set out to examine arrangements and propose recommendations for the integration of new technology into the industry; to recommend measures for quality control of drugs, and to assist small-scale units; to examine and make recommendations on measures taken to reduce the prices of basic drugs and formulations; to recommend measures for providing essential drugs and common household remedies to the general public, especially in rural areas; and to recommend institutional arrangements to ensure the equitable distribution of basic drugs and raw materials, especially for the small scale sector.


  1. The report states that the cessation of phrama imports during World War I gave industries impetus to produce medicines locally. The compound ‘urea-Stibamine’ was developed, and it was found to be effective against ‘kala-azar’ (‘visceral leishmaniasis’).

  2. During World War II, several drugs were indigenously produced by local industry – they were mainly ‘phyto-chemicals’, but progress was also made in producing ‘synthetic drugs’ and ‘biological products’.

  3. When this report was published, the Indian drugs industry comprised of 116 units in the organised sector [registered under the Industries (Developments and Regulation) Act, 1951] and 2,500 units in the small-scale sector. The organised sector had 25 units with foreign equity exceeding 50 per cent and 26 units with foreign equity of 50 per cent or less. In the small-scale sector, 9 units had foreign equity exceeding 50 per cent, while 6 units had 50 per cent or less of foreign equity.

  4. In the small scale sector, the total bulk drug production was rated at about Rs. 5 crores and estimated to be about 500 tonnes. Of these, about 3 per cent were produced by foreign and foreign majority units, and 97 per cent by Indian units.

  5. Of the 116 units in the organised sector, 64 units produced bulk drugs and formulations. While 15 only manufactured bulk drugs, 18 others produced only formulations and 5 had been recently issued industrial licenses for manufacturing bulk drugs and formulations.

  6. In 1973, the total bulk drugs turnover of the industry was around Rs. 75 crores, and for formulations it was roughly Rs. 370 crores.

  7. Despite the growth attained by this industry, large numbers of bulk drugs still had to be imported to meet demand; these included ampicillin, erythromycin, gentamycin, streptomycin, tetracycline and chloramphenicol. These accounted for a total import (in 1973) of nearly Rs. 5 crores.

  8. When this report was published, drugs and pharmaceuticals produced in India were being exported to 80 countries, including the UK, USA, West Germany, USSR and Japan.

  9. Exports of ‘quinine salts’ in 1973-74 were valued at Rs. 1.18 crores as compared to Rs. 0.70 crores in 1972-73. The main buyers were West Germany, Hungary, USSR and Bulgaria.

  10. The report states that despite producing pharmaceuticals worth Rs. 370 crores in 1973, modern drugs reached only about 20 per cent of India’s population. This implied that a majority, particularly in rural areas, and economically weaker sections, derived little advantage from modern systems of medicines.

    Focus and Factoids by Aaliya Sayed.


Committee on Drugs and Pharmaceutical Industry, under the chairmanship of Jaisukhlal Hathi.


Ministry of Petroleum & Chemicals, Government of India, New Delhi


Apr, 1975