While the deadline for Schedule M compliance is round the corner and the small-scale sector pharmaceutical association leaders are hard pressing the government for further extension, industry observers feel the number of units that will have to down shutters forever is likely to be very less, even if the government sticks to the present deadline.

Supporting the argument, they note the Centre had diluted the norms to offer discretionary powers to the state drug controllers, and this will become the most crucial factor in deciding the fate of so far non-complainant units. In most of the states, the drug controllers have cordial and lenient relationship with the units. Further, majority of the state rulers are unlikely to support the idea of closing down units in their states and are likely to intervene in the process - at least to press their drug control officials to offer some more time.

Another argument is that only the units that have to renew their licenses by 2004-end or during early 2005 were likely to immediately face the music, than the non-compliant units having renewal time after one or two years. Since most of the state drug control departments and the CDSCO offices lack adequate staff to run even their day-to-day affairs, an immediate widespread crackdown on units are unlikely to happen in most of the states. Even in that case, the drug inspectors as per the DC's direction can direct the units 'that are in the process' to comply with the requirements within a prescribed period of time.

Supporting this argument, the sources point out the plight of Schedule T compliance deadline for ISM units, which ended during 31st December 2003. As Pharmabiz reported earlier, apart from Gujarat and Karnataka state drug control departments, which asked closure of a few units and the Kerala drug control department which issued a soft warning to its 1000 odd units to 'comply at the earliest,' none of the state drug control departments in the country have flexed their muscles to close down non complainant ISM units, even after almost one year since the deadline.

Nevertheless, the industry is not going to take any chances and individual units are trying hard to comply with the deadline, vouchsafe SSI pharma sector leaders, who also agree they lack exact data on the level of compliance among their members. Thanks to the efforts of industry associations like IDMA, CIPI and various state drug control departments, the units have adequate knowledge on the need for compliance.

A belated dilution of revised Schedule M norms, lack of clarity on definitions related to provision of areas like ancillary and air handling etc. has complicated the modernization process. Most of the units are relying on their own fund resources, as majority of the banks have not lent a lenient attitude to their modernization needs. It was necessary for the government to earmark a separate fund like the 'TUFS' scheme for textile units, rather than asking the pharma units to somehow modernize with the general modernization schemes of the banks, note the industry leaders.

"No businessman will close his firm and run away from his business fearing the government rules on running a business. They may change something here and there like fans instead of A/c to handle air, may merge a few sections to minimize their investment, and will continue. That is what is going to happen," opines an optimistic industry expert.