The union ministry of Small Scale Industries is seriously considering the long-pending demand of the small scale pharmaceutical units in the country to increase the investment limit of SSI pharmaceutical units from the current Rs 1 crore, in the wake of the mandate on Schedule M.

Pharmabiz learnt that the development commissioner and additional secretary of the ministry of SSIs have convened a meeting of the authorities and industry organizations, to discuss the 'need to raise investment limit for SSIs in the wake of Schedule M implementation and challenges they face post 2005 era,' on August 2, 2004 at New Delhi.

The meeting is likely to be attended by the DCGI, senior officials from the Department of Chemicals and Petrochemicals, representatives from Pharmexcil, NIPER, IDMA, CIPI, OPPI, IPA, office bearers of the pharmaceutical manufacturers associations of Tamilnadu, Madhya Pradesh, Karnataka, West Bengal, All India Small Scale Drug Manufacturers Association, All India Small Scale Pharmaceutical Manufacturers Association, Alandur Pharmaceutical Manufacturers Association etc.

According to sources, the commissioner has suggested the industry representatives to give a detailed presentation at the meeting on the need for revising the investment limit and the problems faced by the SSI pharmaceutical units. Depending on the outcome of the meeting, the government is likely to take a decision on revising the investment limit, said sources.

It may be noted that one of the major demands of industry associations like the SSI committee of IDMA and the Confederation of Indian Pharmaceutical Industries (CIPI) has been to raise the SSI investment limit to Rs 5 crore from the existing Rs 1 crore.

Sources point out that the existing Rs 1 crore limit is a major reason for many of the existing SSI units not showing much interest in implementing the Schedule M guidelines. The revised guidelines cause expenditure to the tune of over Rs 1 crore on the existing units due to increased requirements of space as well as machinery in the form of upgrading the plants, installation of modern equipments, air handling systems and water systems.

Many of the pharmaceutical units were unwilling to go for modernization, as they were concerned that they may lose the SSI status and certain benefits. In the case of new units, it requires investment to the tune of about Rs 2.8 crore to set up a new unit as per the conditions in the revised Schedule M guidelines, which virtually eliminates new pharmaceutical units coming up in the SSI sector.

Enhancement of the SSI investment limit will also help the units to compete with the multinationals in the new product patent regime and for consistent technology upgradation, said SSI sources.