The small scale pharma industry (SSIs) in Maharashtra has suggested to the National Productivity Council (NPC) to set up a separate body under the Union Chemicals and Petrochemicals Ministry for distributing the Pharmaceutical Technology Upgradation Fund (PTUF) to the industry, to make the procedure more convenient and simple for the units.

In a meeting with the NPC panel, which visited the state to collect information and response from the industry to improve the fund disbursal, the industry representatives raised their apprehensions on the banking model prevails for disbursement of the scheme at present. Though the Upgradation fund was allocated by the government in the past several years, there were hardly any takers from the industry as the procedure to avail the financial support was less industry friendly, according to industry sources.

"We feel that the scheme would be meaningful only if the operational part is made simple and easy for disbursement of funds. From the discussions we had with the team, we think that the government is considering a separate body for disbursement of funds under the scheme," said Dr T S Malvankar, president, Federation of Small Scale Pharma Industries in India (FSSPII).

Earlier, the Federation had submitted a memorandum to the Chemicals ministry to consider the fund of more than Rs 500 crore as a subsidy grant to the small scale pharma players rather than the current method of considering it as a loan with 5 per cent interest. In the memorandum, the federation added that "The SSIs are not in a position to repay the loan as their condition is worst than farmers who are committing suicide in Maharashtra and other states".

The sources said that the panel including officials from NPC, Ministry of Chemicals and from the national industry associations, which had its visits to Punjab, Haryana, Maharashtra, Madhya Pradesh and West Bangal, paid heed to their requests and suggestions and assured the issues to be reported to the department of chemicals and fertilisers in the meeting at New Delhi in May 30. The panel has conducted a sample visit to four small scale manufacturing plants in Maharashtra including formulation and bulk drugs plants.

The industry has put forward its suggestion on the parameters used for fund release including the time frame set for re-payment of the loan. Currently, the scheme mandates that the loan should be paid back by the companies within five years. The industry informed the panel that the SSIs, with their current financial status, would need an extension of time limit for re-payments.

The industry also demanded the panel to revise the current model of fund disbursement, as some companies are looking up for smaller amount of loan for technology upgradation whereas some others have a bigger need of investment for their operations. The government should consider the quantum of fund disbursement with this factor in mind, they added.

The NPC panel has found that a majority of the SSI units has only 60 to 70 per cent compliance with the revised Schedule M and currently are under upgradation process. The fund should be used to hasten the process of upgradation and the industry needs proper support from the government on technology upgradation projects.

The panel would report the percentage of industry which needs the upgradation fund for its growth and the procedure the companies should follow for receiving the loan. Industry sources revealed that the panel also assured to address issues in application procedures, for instance, the lack of considerable time allowed for the SSIs to submit the documents and application for the fund.

The objective of the PTUF scheme is to assist the SSI units in technological upgradation of their manufacturing facility in compliance with the Good Manufacturing Practices (GMP) as per standards fixed by Union health ministry in the revised Schedule-M of Drugs and Cosmetics Rule. Under the scheme, the government proposes to reimburse 5 per cent point interest on the loans taken from the banks or financial institutions. SIDBI was named the nodal agency for the scheme.