The Rs 560-crore Pharmaceutical Technology Upgradation Fund (PTUF), intended to modernise the manufacturing plants in order to comply with Schedule M norms, is once again facing some serious hurdles.

Close on the heels of the SSIs call for disbursing the fund on a lump-sum basis calculated at one time on the 5 per cent interest subsidy, another section of the industry is demanding to extend the scheme to the entire purchase cost including plant and machinery instead of just machinery as proposed by the National Productivity Council (NPC). In its report submitted to the chemicals ministry recently, the central agency has recommended interest subsidy should be given only on purchase of new machineries.

After making study visits to SSI clusters located in Karnal, Chandigarh, Mumbai, Indore, Ahmedabad, Baroda, Himatnagar, Vatva and Surendranagar to assess the ground realities in connection with the proposed PTUF scheme, the NPC had recommended 5 per cent interest subsidy on bank loans upto Rs 2 crore on purchase of new machineries.

IDMA SME committee chairman SV Veerramani pleaded for inclusion of plants also in the scheme. It is mentioned in the proposal that the scheme is applicable only to the projects of new machinery. When a pharma unit is upgrading its plant as per Schedule M, it needs to upgrade the manufacturing facilities apart from bringing in new machineries. Hence, it will be fitting for the authorities to extend the scheme to the entire purchase cost including plant and machinery instead of machinery alone, he said.

He also asked the chemicals ministry to simplify the procedures for getting the proposed interest reimbursement easily and comprehensible by SME entrepreneurs. Though the scheme was announced earlier by the government, there were not much takers for the scheme due to several complicated procedures which the SSI units found it difficult to follow. As the scheme ran into rough weather, the government asked the NPC to work out some viable modalities to disburse the so-far-unutilized Rs 560 crore funds to upgrade the units to meet the quality norms laid by the government.

The NPC recommendation is now with the Union chemicals ministry which is expected to finalise the scheme after effecting necessary amendments. The small scale pharma industry has already forwarded its suggestion of disbursing the fund on lump-sum basis calculated at one time on the 5 per cent interest subsidy and to include the units which are upgrading their units through internal accruals.