The Indian Drug Manufacturers Association (IDMA) has urged its members to apply for the Credit Linked Capital Subsidy Scheme (CLCSS) to upgrade manufacturing units to comply with the WHO Good Manufacturing Practice (GMP) and the Good Laboratory Practices (GLP) standards, as a final attempt to utilise the financial assistance offered by the government before the scheme is abandoned.
The association's move comes in the wake of the Department of Pharmaceuticals' (DoP) decision to roll back the scheme due to the extremely poor response from the industry even after it was restructured and relaxed to suit the needs of the small scale pharma industry. According to sources, the DoP is expected to withdraw the scheme in a couple of month's time.
The IDMA, following the DoP's decision to stop the subsidy scheme, has proposed the department to extend the financial support to companies which are looking for funds to upgrade their facilities as per the WHO GMP and the GLP standards.
The department has agreed with the proposal and the association has asked its members to grab the opportunity, said N R Munjal, president, IDMA. "We are glad that the department has agreed with our proposal. We have already informed our members about the decision and intimated them to utilise the scheme for upgradations required for their further growth," he said.
The small scale pharma units could utilise the scheme to upgrade their facilities, especially at a time when the Indian regulator has decided to implement the GLP standards mandatory for pharma units in the country, from November 1, 2010.
The capital subsidy scheme, which was once revised after several rounds of discussions with the industry organisations, turned to be a failure as a meagre Rs 2.21 crore was dispersed trough the scheme to around 34 units as against the DoP's expectation of issuing Rs 400 crore fund to almost 3000 small scale pharma units.
Meanwhile, IDMA is also collecting information and views from the small scale units, about the still persisting bottlenecks for them to avail of the scheme. The association has sent a set of questionnaire to its members seeking response to get a detailed view on such issues and the information would be submitted to the DoP soon.
Despite the department has restructured the scheme, certain condition from the Small Industries Development Bank of India (SIDBI), the nodal agency issuing the subsidy, seeking three years' balance sheet from the companies showing profit is the cardinal blockage for the small scalers to avail the scheme, said IDMA sources. The small scale units were not able to sustain profit amidst the capital spent to upgrade facilities as per the revised Schedule M and the increased competition in the market with the prominence of units based in the tax free northern states.