The consultative meeting of drug industry representatives called by the Development Commissioner (SSI) of the Ministry of Small Scale Industries here on Tuesday has made a unanimous recommendation for increasing the investment limit of SSI pharmaceutical units from the current Rs 1 crore to Rs 5 crores. The representatives of industry associations like Organisation of Pharmaceutical Producers of India (OPPI), Indian Drug Manufacturers Association (IDMA), and Confederation of Indian Pharmaceutical Industries (CIPI) etc have all supported the need for an increased investment limit in the wake of Schedule M compliance requirements. The industry recommendations are to be given high priority, informed Ministry sources.
According to the ministry officials, the increase in investment limit was one of the major issues discussed during the meeting. "The ministry is open to the industry suggestions. If they feel that there is a genuine demand for increasing the investment limit, we will support it," they said.
However, the decision of the associations to support the proposal may create problems from within the small-scale drug units. There is a strong feeling among a good number of drug SSIs against any proposal for substantial increase in the investment ceiling as they fear that it will pave way for the entry of medium scale drug manufacturers into the exclusive SSI club. Further, any major capital expenditure as part of technology upgradation will increase the interest burden on the small players, thereby minimizing their chances to produce low cost drugs.
Speaking to pharmabiz.com, some of the SSI participants of the meeting said that there was no need for such a major revision of investment limit in the pretext of Schedule M. "One can meet all capital requirements as per revised Schedule M at a lesser cost. The move to increase the investment limit is just a ploy to kill the SSI segment in drugs sector. If there are 5800 SSIs in the country today, the number of SSIs, once the investment limit is increased, may go down to about 2000", they fear.
However, not all among the industry representatives shared the same view. Majority felt that the revision is the need of the hour and would help SSIs to comply with revised Schedule M. "This investment will also help them continue to do contract works for multinational companies. With a proper manufacturing facility, the chances of bagging outsourcing contracts from larger companies will increase multifold," they say.
The trend among the state procurement agencies to include turnover clause in tenders was also a major issue for discussion. The SSI organizations informed that they have received an assurance from the ministry that the matter will be considered with due seriousness.