The government may enhance the ceiling on term loan for capital subsidy under the Credit Linked Capital Subsidy Scheme (CLCSS) from the existing Rs 1 crore to Rs 1.5 crore to the small scale pharma units in the country to upgrade their units to meet quality standards as per the revises Schedule M. However, the rate of subsidy may remain unaltered at the existing 15 per cent.

The enhancement comes as part of the department of pharmaceuticals' efforts to make the CLCSS scheme more attractive and beneficial to the industries to upgrade their facilities to meet the good manufacturing practices (GMP). The department of pharmaceuticals has asked the ministry of small and medium enterprises (MSME), which had launched the CLCSS scheme, to enhance the capital subsidy to make it more pragmatic.

The department of pharmaceuticals has argued with the MSME that there are 62 kinds of machineries required to be upgraded by the pharma units for compliance to Schedule M under the Drugs and Cosmetics Act. Against this requirement, the MSME has drawn up a list of mere 30 different machineries for which assistance under CLCSS can be granted. This list needs to be expanded to enable pharma manufacturers to be Schedule M compliant and this in turn calls for enhancing ceiling on term loan for capital subsidy to Rs 1.5 crore, it said.

Apart from the domestic use, the Indian pharma products are also exported to developed markets such as US and Europe, and exports of pharma products require compliance of WHO-GMP. WHO-GMP stipulates stringent quality control and quality assurance compared to that of schedule M in terms of infrastructure, documentation, etc and therefore it requires higher level of financial support, the pharma department argued with the MSME.

CLCSS scheme is being revived by the MSME as per the directive of the planning commission which had earlier turned down the union chemicals ministry's ambitious Rs 560-crore pharmaceutical technology upgradation assistance scheme (PTUAS).