Notwithstanding the relaxation of the norms and adding the list of eligible technologies, the Credit Linked Capital Subsidy Scheme (CLCSS) has failed to enthuse the small and micro pharmaceutical enterprises as expected by the Department of Pharmaceuticals (DoP).

After the scheme was tweaked in 2008, as many as 294 drugs and pharmaceutical SMEs have availed a subsidy of Rs.19.76 crore till March this year, according to the official information collected whereas the DoP was hoping that 3000 SME would take the benefit to the tune of Rs.400 crore.

“Ministry of Micro, Small and Medium Enterprises (MSME) is implementing the Credit Linked Capital Subsidy Scheme (CLCSS) to provide incentives to micro and small enterprises for technology upgradation for approved 48 Sub-Sectors including Drugs & Pharmaceuticals Sub-Sector. Under this Scheme, 15 per cent capital subsidy is provided up to a loan of Rs.1 crore as per the guidelines of the Scheme. Technologies required for Schedule M compliance and National/International standards in the Drugs & Pharmaceuticals Sub-Sector were added to the list of eligible technologies under the Scheme on 13.7.2009. Under this Scheme, 294 Drugs & Pharmaceuticals micro and small enterprises have availed subsidy of about Rs.19.76 crore up to March, 2012,” according to an official release.

As many as 160 drugs and pharmaceutical micro and small enterprises (MSEs) have availed subsidy of Rs.7.75 crore since the inception of the CLCSS scheme till March 3I, 2010. But the data showed that as many as 126 of them had taken loans to the tune of Rs.5.54 crore under the scheme before the relaxation of the norms. Thus, only 34 units came up for the loan with a total sum of Rs.2.21 crore during the last eight months, notwithstanding the efforts by the authorities to lure them.

Industry sources said that the units still preferred something like the proposed Pharmaceutical Technology Upgradation Fund (PTUF) which has been held up by the Planning Commission. Although CLCSS provides a relief in the form of capital subsidy at the rate of 15 per cent as per the relevant provisions, the point remains that SSI has to repay 85 per cent of the loan in due course.

Meanwhile, the Planning Commission is seriously considering a proposal worth Rs.1200 crore towards the upgradation of small and medium pharma units to WHO-GMP standards through an interest-based subsidy scheme with the aim of equipping them to face global competition and thereby push the overall output of the pharma industry in the country.