The Credit Linked Capital Subsidy Scheme (CLCSS) for technology upgradation of small-scale units, which was one of the options for the SSI pharma units to comply revised Schedule M, has been discontinued by the planning commission from the current financial year. The industry blames lack of a clear-cut roadmap from the concerned nodal agency for the unfortunate end of the support scheme introduced by the Ministry of Small Scale Industry.

The planning commission stopped the Scheme, noting poor off take of subsidy by the industry, under which the government has allocated Rs 500 crore for technical upgradation of micro and small-scale units. The Ministry of Small Scale Industry has been conducting various awareness camps and workshops for the SSI players to generate a better response for the Scheme, said officials.

The SSI pharma units were open to the opportunity to bid for the subsidy only in the last two fiscal years, when the turnover cap for eligibility of the scheme has been raised from Rs one crore to Rs five crore. The ministry also made the pharma machinery required for compliance of revised Schedule M eligible for subsidy under the scheme in the last fiscal.

"The SSI pharma units were slowly started opting for the scheme for survival in the last fiscal, and the decision of Planning commission to withdraw the funds seems to be a big blow for the industry," said S R Vaidya, co-chairman, Small and Medium Entrepreneur's Committee, Indian Drug Manufacturers Association (IDMA). "We are going to mark our protest against the withdrawal of the scheme and will demand to continue the funding for next five years," he added.

The industry points out that the efforts of the ministry have not been reaching the industry through the bottleneck of its nodal agency, Small Industries Development Bank of India (SIDBI). Lack of adequate support from SIDBI has weakened industry's enthusiasm to survive with the aid of the scheme.

SIDBI rejected or neglected any support to the banks, which approached the nodal agency for official authorization with the applications of the SSI units, alleged T S Jaishanker, chairman, Confederation of Indian Pharmaceutical Industry (CIPI). "Only a small number of SSI pharma units, say about one per cent, were able pass the hectic procedures of SIDBI to receive the subsidy. The planning commission's decision to discontinue the scheme may not make any impact on the industry, as the scheme was already out of the reach of the poor units. But the action also shows the saddening end of a good scheme put forward by the ministry," he maintained.

Meanwhile, the industry sources informed that the SSI Ministry is interested to continue the scheme with the help of the industrial units, and will support the moves of the industry to extend the funds to the upcoming fiscal years. Last year, at least Rs 10 crore has been allotted under the scheme to the pharma sector, for technology upgradation according to revised Schedule M standards, informed Vaidya. The ministry can enhance the scheme with better support from the industry associations, once it is reinstated, he added.