The small and medium scale pharmaceutical firms can draw their credit linked capital subsidy scheme (CLCSS) and Pharmaceutical Technology Upgradation Fund (PTUF) loans from various public sector banks apart from the Small Industries Development Bank of India (SIDBI), if a new proposal from the industry associations is accepted by the Union ministry of small scale industries.

In a meeting conducted recently with the ministry officials, the industry has put forward a proposal to bring in a single-window clearance system for distribution of loans. The industry sources revealed that the ministry officials has agreed with the proposal and has asked the Indian Drug Manufacturers Association (IDMA) to submit a list of all necessary manufacturing tools needed for production of various types of medicine to carry forward the project.

"The current list of manufacturing tools with the ministry is pretty old and does not contain many of the tools which are mandatory under the revised Schedule M. We are enlisting the machineries for various manufacturing facilities and will submit the list to the government soon. With this, the ministry can allow public banks to disburse the loan amount with out further investigation," said an executive committee member with IDMA.

The industry has been seeking such a model in the supporting schemes as the procedural delay in SIDBI, which is currently the only outlet of the technology upgradation funds, has resulted in delay in upgradation programmes. Based on the poor outtake from the CLCSS scheme, the Planning Commission in the beginning of 11th five year plan has sought explanation from the ministry to continue the scheme.

According to the office of Development Commissioner (SSI), only 65 drug units have been given the CLCSS assistance, with total subsidy amounting to Rs 217.44 lakhs so far, says early reports. The government, in the 11th five year plan has then launched the Rs 560-crore PTUF Scheme for which Rs 360 crore had already been earmarked during the five year plan.

Prior to the implementation of PTUF scheme, the National Productivity Council has recently submitted its recommendations on the plight of SSIs in the country. The scheme is expected to get notified within a couple of months, according to the industry sources. The single window system, with more outlets for the disbursal of the scheme, could make the funds easily available for the industry, added sources.