The small scale pharma industry has sought the intervention of the Union micro, small and medium enterprises (MSME) ministry to initiate corrective steps on several issues such as Schedule M implementation, SSI exemption limit, turnover-based tender policy and creation of CDA which, the SSIs alleged, are aimed at eliminating SSIs at the behest of multinational companies.

In a memorandum to the Development Commissioner of MSME ministry, the SME Pharma Industries Confederation (SPIC), a confederation representing mostly small pharma companies, stated that Schedule M is applicable throughout the country on a uniform basis but tax disparity of 20 per cent between excise free zones (EFZ) and non-EFZ has rendered the SSI units in non-EFZ unviable. These disparities should be removed before implementation of Schedule M as making investment on Schedule M is pointless when SSI is unviable. Laws are equally applicable when there is a level playing field. SPIC also urged the ministry that the Najma Heptullah Committee recommendations should be first implemented before implementation of Schedule M.

The SSIs also sought the MSME ministry's intervention on exemption limit to the SSIs which has been effectively reduced to half owing to lower rate of abatement of 35 per cent. Though both the Eleventh Plan as well as the Chemicals Ministry acknowledges that SSI trade margins are 300 per cent which entitles 75 per cent abatement as per norms of department of revenue, there has been no relief from the government so far.

The SPIC also asked the ministry to intervene to scrap the proposed creation of Central Drug Authority (CDA) as the only motive to create the CDA is to eliminate SSIs. Since Schedule M is impossible to be implemented by the SSIs in its present form, the creation of CDA will ensure the closure of SSIs which will provide multinationals a free run, it said.

Asking the ministry to immediately intervene to save the SSIs from the gross injustice on government tender process, the SPIC said the government tenders in the country should not stipulate turnover for eligibility as mere turnover will not guarantee quality. Every government purchase tender in the country stipulates that the minimum turnover of the company should be above Rs.10 crore or even Rs.50 crore to eliminate SSIs from participating. In a recent Railway tender, the minimum turnover was stipulated as Rs.50 crore. Though it is understandable that the capacity of unit needs to be verified but the turnover is no yardstick for capacity. The yardstick of capacity can be gauged by many other means, it added.