While supporting the objectives of the amendments in Schedule M norms, the Najma Heptulla committee has raised concerns over the closure of small drug units in many states and asked the government to proactively reach out to the SSI sector to support them during the transitory phase.

The report of the panel, submitted in the Parliament recently, said the amendments proposed would ensure adherence to the good manufacturing practices and requirements. "Not only these amendments are in sync with the stated objective of making the country an international hub in pharmaceutical manufacturing, but such standards are also desirable to protect the interests of consumers," it said.

"The committee recommends that the government should proactively reach out to the SSIs to support them during the transitory phase as they graduate to become Schedule M compliant. Government should promote the schemes like Credit Linked Capital Subsidy Scheme (CLCSS) and Credit Guarantee Fund Scheme among the small scale manufacturers to enable them to access the institutional credit," the much awaited report said. The panel wanted the government to expedite on the proposed five per cent interest subsidy scheme (now PTUF) and link it with the CLCSS.

"The committee takes a very serious view of the instances of closure of small scale units in certain states. The committee takes into cognizance the concerns raised by the small scale manufacturers over the possibility that the proposed amendments were likely to favour the big manufacturers and the MNCs and deny the smaller units the level-playing field even in the domestic market. The committee also notes the significant contribution of the small manufacturers in the annual medicine production," the report said.

Noting that the Ministry of health and the MSME Ministry had contrasting views on the impact of amended Schedule M on the SSIs, the committee recommended that the MSME Development Organisation along with the DTAB should conduct a survey to ascertain the extent of closure of SSIs due to non-compliance of revised norms after it was made applicable from July 1, 2005.

The committee also expressed concern over the 'inexplicable delay' in framing the rules pertaining to establishment of funds as provided in the Micro, Small and Medium Enterprises Act, 2006 which would help setting up funds specially to support the small scale manufacturers to meet the requirements prescribed in the amended Schedule M.

It also called for a special package for the small scale units under the Micro and Small Enterprises Cluster Development Programme to avail of the integrated infrastructure facilities. It called for the coverage of certification reimbursement scheme to cover the expenditure incurred in maintaining documentation. Besides, the panel recommended a procurement preference policy by the Centre, States and other departments favouring the small and micro units.