Even as a large number of small and medium pharma units are struggling to implement the Schedule M and are even closing down their units due to its financial burden, the proposed outlay for the current Plan period is going waste, thanks to the lacklustre approach by the authorities including the Department of Pharmaceuticals and the Planning Commission.

Though the government was keen to implement the Schedule M, it failed to ensure that the proposed outlay reached the beneficiaries during the last four years of the current Five Year Plan. A total outlay of Rs. 340 crore was made in the 11th Plan for providing interest subsidy for the SMEs. However, only Rs. 57 crore could be allocated in the budget estimates in the first three years for the purpose, the figures show.

Even the budget allocations were cut down further to practically nil in the revised estimates, as the original scheme of Pharmaceutical Technology Upgradation Fund (PTUF) could not go past the Planning Commission. Though Credit Linked Capital Subsidy Scheme administered by the Ministry of Micro, Small and Medium Enterprises (MSME) was expanded, it failed to enthuse the SME sector, sources said.

Sources in the pharmaceutical department blamed it on the Planning Commission about the PTUF, even as the Parliamentary Panel attached to Chemicals Ministry repeatedly expressed concerns and called for the implementation of the scheme. “The Committee are of the considered view that the problems and concerns of the small pharmaceutical units arising out of the mandatory requirements now laid down in the Drugs and Cosmetic Rules, 1945 should be properly addressed to. Since the 'Interest subsidy Scheme for Schedule M compliance' was intended to help encourage small scale units to upgrade their manufacture facilities to conform to the revised norms, the Scheme should be implemented, in letter and spirit and the allocations made in this behalf should be sanctioned and properly utilized, at least in the remaining years of the 11th Plan,” the committee said in its report long back.

“There is no separate incentive scheme available for the small scale pharma units in the country. However financial assistance in the form of 15 per cent capital subsidy limited to the project cost of up to Rs. 100 lakh i.e. total capital subsidy limit Rs. 15 lakh per small scale unit is available under the Credit Linked Capital Subsidy Scheme,” the DoP told the panel.

Under the revised guidelines, the benefit of the CLCSS was available to the small scale pharma units for an increased number of up to 179 equipments/machineries recommended for Drug and Pharmaceuticals Products, Sub-sector-wise for up-gradation to Schedule M standards as per the Drugs & Cosmetics Act, 1940. It is expected that more than 3000 small scale pharma units will be benefited from this enhanced scheme, the DoP said.

However, in fact, the expansion of the CLCSS failed to lure many SMEs on many grounds. Only around 35 units have taken the benefit till March 31 for a total sum of Rs. 2.21 crore, as per the information available with MSME ministry. 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 31, sources said.