The Department of Pharmaceuticals (DoP) has formed a sub-committee of the Joint Working Group for Building Capacities of SMEs operating in the pharmaceutical sector to go into the details regarding the requirements for finance by the SMEs for becoming Good Laboratory Practices (GLP) compliant. The government is also likely to appoint a consultant for an in-depth study of the entire gamut of issues in the sector after getting the report from the panel.

The sub-committee, formed at the meeting of the joint working group last month, has been asked to submit the report at the earliest. The sub-committee will also look into the nature and extent of financial burden by the sector. The panel, created after the industry took up the issues concerning the Schedule M and other financial problems by the sector especially the SMEs, has members from the small and large scale industries, representatives of NIPER and FICCI, sources said.

Besides, the secretary of DoP also asked the SME sector and the IDMA to submit papers highlighting the issues and problems faced by the SMEs so that a suitable strategy could be devised to help the sector.

The secretary felt that SMEs were doing well but there was need to help the sector to maintain and increase the present growth levels. For that the bottlenecks need to be identified and removed, he said.

The SME representative in the meeting said the units were facing heavy financial burden due to Schedule M and suggested that the banks should lend them loans in 1:10 ratio (turnover: loan sanctioned) instead of present 1:3 ratio. He also sought soft loans to acquire refrigerated trucks as the SME s did not have adequate cold storage facilities.

While supporting the problems raised by the SME sector, the IDMA called for greater tax incentive for R&D units engaged in applied research. The association also pointed out that the companies were facing problems in bidding supply to various agencies like CGHS, SAIL, Railways, etc. as these organisations have increased threshold limits regarding turnover and investment. IDMA suggested that these organisations also should follow the procedure adopted by the ministry of defence which allows the companies who meet their quality control standards for bidding, irrespective of turnover size.