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.

A steering committee of the Planning Commission has already recommended the proposal based on the detailed project report by the Department of Pharmaceuticals (DoP). The proposal seeks to help at least 1200 SMEs to upgrade to the WHO-GMP standards by the end of 2017, sources said.

In the 11 th Plan upgradation of SMEs to Schedule M GMP was envisaged. This assistance did not include upgradation to WHO GMP and higher International standards requirements which are now increasingly required for making the SME pharma sustainable in an increasingly competitive and demand global manufacturing environment, the steering committee report said.

“Accordingly it is proposed to launch a scheme in the12th Plan for upgradation of 1200 SME pharma units to WHO-GMP and International standards manufacturing standards. For this, as regards, MSME, it would accordingly include the required upgradation list in the list of equipments for financial assistance to SSIs. However this could present difficulties in total project admissible under the on-going scheme of CLCSS of the MSME for technical upgradation of SSIs as it is estimated that upgradation to WHO-GMP standards would require a cost of about Rs. 3 crores,” the report said.

“Accordingly, it is proposed that assistance to SSI Pharma Units under the CLCSS may be provided for project cost of upto Rs. 3 crores with capital subsidy of Rs. 1 crores from the current level of Rs. 25 lakhs capital subsidy on a total project cost of Rs. 1 crores. Also, the assistance should be dovetailed to provide soft loan interest rates of 5 per cent by the Banks for this upgradation. Similar assistance would be provided to the medium scale enterprises who are not WHO-GMP standard but wish to achieve the level for increasing their competitiveness,” it said.

On the whole for 1200 units at the rate of Rs. 1 crores per unit would require total financial assistance of Rs. 1200 crores as subsidy for the period upto 2017. The subsidy is better given as interest-based subsidy which would help stagger the plan allocations on a yearly basis and take care of the wage and means limitations of the budget, it said.