The small scale pharma industry in the country has urged the Union chemicals ministry to disburse the proposed Rs 560-crore Pharmaceutical Technology Upgradation Fund (PTUF) on one time lump-sum payment basis calculated at 4 per cent interest subsidy and to include the units which have already upgraded their units through internal accruals.
Expressing reservations on the practicability of the National Productivity Council (NPC)'s recommendation of 4 per cent interest subsidy to such units which are upgrading their units by taking loans, the SSIs have said that there are thousands of units in the country which are upgrading their units by spending from their own pockets. These units cannot afford the high interest rates prevailing in the country, especially in the wake of dwindling work orders due to the disparity existing between the excise free zones and non-excise free zones.
The industry associations representing the SSIs will soon make representations to the ministry in this regard. The units which cannot afford high interest loans and are upgrading their units by spending from their pockets to comply with the GMP norms should not be left out of the PTUF benefits. There is no provision for these units in the NPC proposal, sources said.
In its recommendation, the NPC has proposed 4 per cent interest subsidy on loans taken by the units to upgrade the units. Its recommendations include enhancement of bank loan limit upto Rs 2 crore from the earlier Rs 1 crore, making available the scheme to the closed units which are willing to revive and to ayurvedic units complying with Schedule `T' norms, along with the running units. Another major recommendation is that the investments made after July 1, 2005, when the Schedule M norms were implemented, may also be covered under PTUF. As per the present proposal, only the investments from April 2007 are covered.
Sources said that the NPC recommendation is totally unpracticable and cumbersome as it needs a huge manpower to implement it. The better way to disburse the fund would have been by a lump-sum one time payment calculated on the 4 percent interest subsidy.