Aiming to increase the competitiveness, easy access to standard testing facilities and value addition in the domestic pharma industry especially to SMEs through creation of common world class facilities, the Department of Pharmaceutical (DoP) seeks to implement Cluster Development Programme for Pharma Sector (CDP-PS) which will enhance quality, productivity and innovative capabilities of the SME pharma sector in the country.

The major objectives of the scheme are to strengthen the existing infrastructure facilities in order to make Indian pharma industry a global leader in pharma exports; to reduce the cost of production by 20 per cent in the clusters leading to better availability and affordability medicines in domestic market; to help industry meet the requirements of standards of environment at a reduced cost through innovative methods of common waste management system; to exploit the benefits arising due to optimization of resources and economies of scale; and to provide information of latest global developments in the sector related to regulations, IPR issues, new products, new markets, etc.

The total size of the scheme is proposed as Rs. 125 crore and it would be implemented on a Public Private Partnership (PPP) format through one time grant-in-aid to be released in various phases for creation of identified infrastructure and common facilities to a Special Purpose Vehicles (SPVs) set up for the purpose. The scheme is for setting up of new cluster as well as upgradation of existing cluster. However, the purpose of the grant is for activities of common facilities.

Assistance under the scheme will be admissible for creation of common facilities which will consist of creation of tangible "assets" as Common Facility Centres (CFCs). Some of the indicative activities under the common facilities are common testing facilities; training centre; R&D centres; effluent treatment plant; and common logistics centre.

The maximum limit for the grant in aid under this category would be Rs. 20 crore per cluster or 70 per cent of the cost of project whichever is less. Government grant will be 90 per cent for CFCs for difficult and backward regions. The cost of project includes cost of land, building, pre-operative expenses like preparation of DPR, administrative and management support expenses including the salary of CEO, engineers, other experts and staff during the project implementation period, preliminary expenses, machinery and equipment, miscellaneous fixed assets and other support infrastructure such as water supply, electricity and margin money for working capital.