The sub-group of the National Manufacturing Competitiveness Council (NMCC) is seriously thinking of recommending the Union Government to announce a few incentives to bail out the SSI pharmaceutical drug units from the present crisis and to step up the tempo of modernization.

The first meeting of the sub-group, held in New Delhi, last week, is learnt to have discussed formation of Rs 500-crore corpus one time subsidy fund for upgradation of the units and to offer a few other incentives like increasing the conversion costs for products under DPCO. The meeting assessed the incentives would help to speed up the slow progress made by the SSI pharmaceutical units in implementing the Schedule M norms, and to solve by some extent the current crisis faced by the SSI manufacturers.

Sources told Pharmabiz that though the meeting could not elicit consensus to recommend the incentives to the government, the agenda would be pursued in the following meetings of the sub-group of NMCC.

At present, the Department of Indian System of Medicines & Homeopathy (ISM&H) offers financial assistance to a maximum of Rs 2 lakh of the expenditure as subsidy to the total additional expenditure incurred by the ISM units for upgradation of the facility to the GMP standards as per Schedule T guidelines. Similarly, at present Technology Upgradation Fund Scheme (TUFS) is offered to some other industrial segments like textile sector. The same provisions are not offered to the SSI pharmaceutical units undertaking GMP modernization under the Schedule M norms. If subsidy were offered, the units would be interested in speeding up the modernization process. Similarly, increasing the conversion costs for DPCO products, by at least 5 per cent or even doubling it from Rs 2 to Rs 4 would considerably help in survival of the units, now facing unviable business conditions mainly due to the MRP based excise duty.

Some of the committee members noted, though adequate time was given for modernization, still most of the SSI units are yet to implement the requisite facilities. Many developed nations and the western world, view India as one among the major source of origin of spurious drugs floating in the global markets. This could be detrimental to the interests of the country, now among the top drug manufacturing and exporting countries in the world. If China could considerably reduce its number of drug manufacturing units by implementing stringent manufacturing standards, the same could be implemented in India.

Countering that argument, some of the SSI sympathizers in the committee pointed out that the interest of SSIs could not be ignored for augmenting India's exports and business volume of the pharmaceutical sector. Now 6000 odd units are facing closure threat due to their inability to modernize by investing a few crores of rupees, and due to the unfavourable business environment created by the Government policy decisions. Closure of so many number of units at one time could render nine lakh workers employed with these units jobless. The SSI units were demanding dilutions in Schedule M norms to bring down the cost of modernization, but that never happened. Only extensions to the deadlines for implementation were being granted.

Aswini Kumar, Drug Controller General of India, pointed out adequate time was given for the small-scale units to modernize. It is the mindset of the manufacturers, who are unwilling to go for modernization. "There was no point in offering unending extensions," DCGI said.

The sub-group of NMCC is to address immediate issues plagued with the industry and to look at long-term strategic concerns of the pharmaceutical industry. Led by Dr. V Krishnamurthy, chairman of NMCC, the subgroup includes other members like Anwarul Hoda, member, Planning Commission, P. Sinha, Secretary, Chemicals & Petrochemicals, V. Govindarajan, member secretary, NMCC, Habil Khorakiwala, CMD, Wockhardt and member, NMCC, Prasanna Hota, Secretary, Health, Prof. V.S. Ramamurthy, Secretary, Science & Technology, Dr. M.K. Bhan, Secretary, Bio-technology, Dr. R.A. Mashelkar, Director General, CSIR, S.N. Menon, Commerce Secretary, Prof. Bibek Debroy, Director, RGICS & Member, NMCC, Dr. Isher Judge Ahluwalia, Member, NMCC, Ashwani Kumar, Drugs Controller General of India, P. Rama Rao, Director, National Institute of Pharmaceuticals Education and Research (NIPER), Suresh G. Kare, President, Indian Drug Manufacturers Association (IDMA), D.G. Shah, Secretary General, Indian Pharmaceuticals Alliance(IPA), Ranjit Shahani, President, Organisation of Pharmaceutical Producers of India (OPPI), Dr. B. Parthasarathy, Reddy, President, Bulk Drug Manufacturers Association, T.S. Jaishankar, Chairman, Confederation of Indian Pharmaceutical Industry (CIPI-ssi), Dr. Amit Mitra, Secretary General, FICCI, N. Srinivasan, Director General, CII and D.S. Rawat, Secretary General, ASSOCHAM.