To assist the medium pharma enterprises in the country for the technological upgradation of their units to comply with WHO-GMP, US FDA and other international norms, the department of pharmaceuticals (DoP) has launched an ambitious scheme, Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS) which will come into effect from July 1 this year. Under the scheme, the DoP will provide an interest subsidy of five per cent on loans availed for such purposes, amounting upto a project cost or loan amount of Rs 10 crore.

The PTUAS is to be made operational for the pharma medium enterprises (ME) initially for a period of two years with effect from the July 1, 2010 to June 30, 2012 and to be extended for a further period of two years at the discretion of the government.

The interest will be reimbursed by the DoP through its nodal agency, SIDBI or IDBI. For this part of the interest, the ME units will have to approach the nodal agency and an MoU/tripartite agreement has to be signed by them with the nodal agency and the lending banker (scheduled banks).

Under the scheme, technology up-gradation would primarily aim at complying with the Good Manufacturing Practices (GMP) as per WHO GMP/ other international GMP norms and requirements of premises, plant and equipment for pharmaceutical products for this purpose. The list of well established and improved technologies include quite a few important components of equipments that are relevant and essential for upgradation of MEs so as to comply with WHO GMP/ other international norms.

The list of eligible machinery will be upgraded by the ministry on a periodic basis by a Technical Committee which will be set up by the ministry.

Under the scheme, only new machinery will be permitted. Benchmarking of the cost of machinery will be done by a committee. This committee shall also look into all possible disagreements between lending institutions, units and SIDBI regarding eligibility and the cost of equipments/machinery.

A medium enterprise can undertake one or more activities under technology upgradation. However, multiple activities can be undertaken only in an integral manner, i.e., by way of forward or backward integration. For formulation activities packing in various forms shall be considered as integral activities. The upgradation includes laboratory (both instrumentation and microbiological), pollution treatment devices, controls, training, documentation, information technology, energy generation (DG), energy saving equipments and automation in production activities.

PTUAS will be totally independent of other similar schemes. ME units are permitted to avail of benefits of other schemes, in addition to PTUAS unless specifically provided otherwise.

The lending period is restricted to five years with a moratorium of one year, the interest incentive would be available during the currency of loan subject to a maximum period of six years. The unit should be in operation during the period of availment of incentives and if the unit closes down/becomes NPA, the unit would not be eligible for interest incentive.