Nearly 50 per cent of the SSI units in the pharmaceutical industry are against the government move to raise the investment limit in SSI sector to Rs 5 crore from the Rs 1 crore-limit.
It is learnt that a section of SSIs within the Confederation of Indian Pharmaceutical Industries (CIPI), an umbrella body for the SSIs in India, has expressed their displeasure in increasing the limit. Most of these are the SSI associations attached to CIPI from Madhya Pradesh, Delhi, West Bengal, and Karnataka.
As Pharmabiz reported earlier, the major points for their opposition include fear over entry of medium level companies into the SSI club, increase in capital expenditure, fear over losing concessions in the government tender process etc. They also doubt the move, in the name of need for GMP compliance, is as part of a hidden agenda to reduce the number of SSI units in the country to less than 2000.
According to T S Jaishankar, chairman of CIPI, the association's decision to support the move came after interaction with other industry associations and various SSI leaders. The majority had pointed out the government is considering a revision in investment limit after many years and is unlikely to review it at least for the next four to five years. Considering that, it is necessary for whole of the industry to stay united and seize the opportunity. Nevertheless, CIPI raised its concern over the repercussions of the move and facts on expenditure related to the Schedule M mandate at the meeting, said Jaishankar.
S V Veeramani, chairman of the SSI subcommittee of IDMA points out that the baseless fears over increasing the limit may spoil the chances of government's willingness to consider revision, which is imperative for the survival of SSIs in future. He stated, "The present Rs 1 crore limit was set seven years ago, and over the years expenditures have increased marginally. Now it is a must to invest about Rs 3.6 crore to set up a tablet, capsule and liquid formulation unit, including investments to the tune of Rs 1.6 crore in pollution control, generators, electrical items, R&D set up, quality control equipments and other civil infrastructure.
He also notes that the fear over losing benefits of excise is baseless as excise duty is calculated based on the business turnover and not the investment limit. "Now many of the State Government agencies insist on quality WHO-GMP facilities for participating in tenders. Quality manufacturing facilities is must for business in pharma industry, as this business has responsibility over lives of people and social commitment," comments Veeramani.
Some sources feel the opposition mainly stems from the unwillingness to change, modernize and accept the global challenges. The units should have a realistic assessment of the situation and should adapt and modernize according to the needs of the future. Otherwise, the units would end up in lack of business and have to close down in future, points out the sources that welcome the move.