The Indian Drug Manufacturers association (IDMA) – Gujarat State Board has requested the State Government to grant another six months time to the non-compliant units to obey the rules with a practical and sympathetic attitude, in the wake of the state FDA move to close down all the non-compliant units with immediate effect.
In a memorandum submitted to the state health minister I K Jadeja, the association noted the recent floods in Gujarat had severally affected the pharmaceutical units in the state, particularly the districts of Ahmedabad, Kheda, Baroda, Navsari and Surat. Financial loss and damage to the existing units had caused to stop the expansion activities for 15 days, due to damage in infrastructure and repairing.
The memorandum pointed out Gujarat has about 1150 manufacturing units who are suppose to comply as per Schedule M as on last date on 30.06.2005. Out of this more than 95% units have already approved their plans in FDCA office. They already started the activities for upgradation in their plant for HVAC System, Water System, Micro Lab and Ancillary area along with all the necessary requirements as per Schedule M. Most of the units are still under process of completion and may take about two months to six months period for completing the process. Expense for the upgradation is about Rs 50 lakhs to 2 crore. These units offer employment to 100,000 people, particularly 60% are women employees.
Further, at the time of loan application to bankers, most of the nationalized banks and SIDBI ask for the equivalent of loan amount in their equity and two to three time of loan amount as collateral security. This is the main reason for delay in the implementation of the Schedule M by SSI companies because of lack of funds. All the SSI companies cannot have three time of loan amount as collateral security. Such wrong interpretation and demands cause the project unviable and delay the whole process of implementation.
The association noted the notification on subsidy declared by the Central Government to give subsidies as part of upgradation fund to SSI industries is still awaited. So far neither Govt of India nor the State Government has announced any subsidies to help the SSI industries for breathing in this crisis period. The purpose itself is ironic when subsidies are announced after the closure of needy units.
They noted Gujarat has a major role in the pharma industry, by producing 45% of national production. Most of the units diverted their manufacturing activity to avail benefits of exemption for Excise, Sales Tax and Income tax for 10 years in the states of Himachal Pradesh, Uttranchal and J&K. The remaining active SSI units, which want to remain in Gujarat are under completion stage as per Schedule M compliance. In this situation, Govt. of Gujarat should intervene in this issue and request to the Central Government to give extension for more six months due to genuine reasons to support SME of Gujarat, requested IDMA.
It also noted the notification on Revised Schedule M was just published during last week as per the statutory requirement by Drugs and Cosmetics Act Rules under Conditions of license in Section VII of rule 74, which clearly says that notification effect comes after four months of date of notifications. Hence, the government should take a sympathetic and practical approach and should extend the period for another six months, said the memorandum.