The Confederation of Indian Pharmaceutical Industries (CIPI) will be approaching the Union Finance Ministry to relax the norms of the Pharmaceutical Technology Upgradation Fund Scheme (PTUFS) to make it more accessible to the small scale units. The scheme was introduced by the government to financially assist the small scale pharma units for upgrading their facilities to meet the Schedule M norms.
Thought there are several attractive features in the scheme, the rider of providing a collateral matching to that of the loan amount is proving to be major handicap for the small units. Even though the scheme was open for some time now, there were few takers to the scheme due to the collateral norms. The CIPI wants the government to relax the norms related to the collateral so that more small scale units will be able to take advantage of the scheme to upgrade their units.
"Very few units will be able to take benefit of the scheme at its present form due to the collateral norms. We will soon approach the Finance Ministry in this regard", said CIPI chairman T Jaishankar.
With the small scale units getting a level playing field in the Union Budget, a large number of small scale units will be revived in the non-exempt states. Since all these units have to be upgraded to match the Schedule M norms, they are looking up at the scheme for funds.
Under the scheme, the government proposes to reimburse 5 per cent point interest on the loans taken from the banks or financial institutions. SIDBI has been named the nodal agency for the scheme. The scheme is proposed to give 5 per cent interest subsidy to a maximum limit of Rs 1 crore on a single application. Supposing the banks are offering technology upgradation loans at 7 per cent to the units, the interest burden on the industry would be just 2 per cent. The loan would be for a period of five years.