The Planning Commission has taken strong objection to the Union chemicals ministry's Rs 560-crore Pharmaceutical Technology Upgradation Fund (PTUF) scheme which was aimed at providing financial assistance to small and medium drug manufacturing units for the technological upgradation of their manufacturing facilities in compliance with the Good Manufacturing Practices (GMP).

Instead the Commission has asked the chemicals ministry to revive the Credit Linked Capital Subsidy Scheme (CLCSS) which was discontinued by the Planning Commission from the current financial year due to lack of proper response from the industry.

According to sources, the Planning Commission has taken objection to the PTUF scheme on the plea that since there is already a scheme CLCSS, launched by the Ministry of Small Scale Industries for the technology upgradation of small and medium industries, there is no need to launch another scheme for the same purpose.

However, there will soon be a high level meeting of secretaries of different ministries to take a final decision on the matter in the wake of the Planning Commission objection, sources said.

With the Planning Commission taking objection, there is uncertainty on the future of this ambitious scheme, which the ministry otherwise was to the finalised very soon. The scheme was under active consideration of the chemicals ministry for final approval after the National Productivity Council (NPC), which was assigned to work out some viable modalities to disburse the so-far-unutilized Rs 560 crore funds, submitted its reports some months back. The scheme was to be finalised and get approved by the Finance Ministry and the Planning Commission.

Thousands of small drug manufacturers in the country were eagerly looking forward for the launch of the scheme to upgrade their facilities to meet the Schedule M norms. Thousands of small drug manufacturers have already closed down their units after the introduction of Schedule M by the government due to financial difficulties. Under the PTUF scheme, the government proposes to provide five per cent interest subsidy on loans.

The chemicals ministry mooted the PTUF scheme after the industry's poor response to the CLCSS scheme. There were few takers for the CLCSS scheme due to several complicated procedures which the SSI units found it difficult to follow.