The Confederation of Indian Pharmaceutical Industries (CIPI), the apex organization of pharmaceutical SSI drug manufacturing units in the country, is learnt to have entrusted a committee headed by its North Zone region office bearers to immediately negotiate with the SSI ministry to help its members avail funds for modernization to meet the fast approaching Schedule M deadline.

The move follows a Pharmabiz.com report published Tuesday, this week, on the Ministry of Small Scale Industries move to make the Credit Linked Capital Subsidy Scheme (CLCSS) for SSIs more attractive by increasing the subsidy limit from the current 12 per cent to 20 per cent and the maximum limit of loan from Rs 40 lakhs to Rs one crore.

In an interaction with Pharmabiz, T.S.Jaishankar, chairman of CIPI said it was heartening to know that the Government has come forward to help the SSI pharma units at a time when closure was looming large on many ailing units, which were finding it difficult to mobilize funds for modernization and ensuring escape from downing the shutters for ever.

He said he was in the process of interacting with the CIPI president in New Delhi and top level office bearers of the association to urgently initiate action. CIPI has decided to form a committee with members from the North Zone region based in New Delhi and headed by the CIPI president to interact with the SSI ministry. The committee was likely to soon meet the concerned officials and would represent their suggestions and requirements specific to pharma units, said Jaishankar.

However, the SSIs are worried over the fact that unless the Government increases the SSI limit to at least Rs.3 crore to Rs.5 crore, the schemes could hinder the modernization aspirations of numerous SSI units. As per the current estimation, most of the units require capital investment for air handling systems, upgradation of existing machines suitable to GMP norms, addition of balancing equipment, quality control equipment, computers and accessories, technical expert consultation charges etc.

Besides this, most of the units are in urgent need for working capital. Many units have already invested partially for upgradation. In general, the modernization process in accordance to the guidelines of Schedule M mandates most of the units to invest more than Rs. One crore, which automatically discards them from the ambit of SSI benefits.

As per a tentative proposal to the SSI ministry, being drafted by CIPI, the association would demand to offer need based working capital depending on the total project cost. Further, it would ask for a moratorium period of minimum two years with a repayment period of five years in equal instalments. The SSI pharma units should be offered loans without collateral security, or instead the proposed machines should be taken as collateral security. The association would further ask the ministry to limit offering loans only to eligible SSI drug makers having a valid drug manufacturing license and an SSI certification, said Jaishankar.