The Indian Drug Manufacturers Association (IDMA) will soon take up the issue with the central government to increase the credit investment limit, under the Credit Linked Capital Subsidy Scheme (CLCSS), from Rs one crore to Rs three crore per unit in order to support the small scale pharma manufacturers to put up facilities on par with the international standards.
At present, the scheme run by the Ministry of Micro, Small and Medium Enterprises (MSME) offers Rs one crore credit linked subsidy loan to the small scale industry (SSI) pharma units for technology upgradation to meet the good manufacturing practice (GMP) requirements as per the regulations in the country. The IDMA will seek the ministry to increase the subsidy limit to Rs three crore, so that the units could build air handling units (AHUs) and water management system as per the GMP requirements specified by the World Health Organisation (WHO), according to IDMA sources.
The cost to set up air handling units and water management system would vary from project to project. Setting up of an AHU may cost Rs 60 lakh to Rs six crore while the water management system may need Rs 30 lakh to Rs three crore, depending on the size of the facility. With the break up fund offered now, the SSIs may not be able to set up even a small AHU in its facility.
A little more help from the government on this through the existing scheme would turn highly beneficial for the SSIs and may also help the companies to upgrade their facilities as per the standards of WHO GMP and expand their operations in exports sector too, said the source. A request letter on this regard would be submitted to the authorities soon, he added.
With Rs 400 crore corpus fund, CLCS Scheme offers 15 per cent capital subsidy on capital investment of upto Rs one crore for each unit based on Detailed Project Plan (DPP) of upgradation plans for application. The DPP should be submitted to the bank for financial assistance including loan and subsidy.
Following the request from various industry bodies, especially the IDMA, the MSME ministry has announced a programme supporting the SSI pharma units to avail the benefits of CLCS Scheme for financial assistance by expanding the list of products under the scheme from 32 to 179, in October 2009. The expanded list includes the latest equipments necessary for a pharma manufacturing unit to ensure standard operating facilities mandated under the regulations.