New Delhi: The Department of Pharmaceuticals (DoP) has received over 100 applications for the support under the revamped the Pharmaceutical Technology Upgradation Assistance Scheme (RPTUAS) and approved seven from the Micro, Small and Medium Enterprises (MSMEs), according to a statement by the Central government.
The statement comes out at a time when a section of the industry alleges that the revamped scheme is also not helping the MSMEs to upgrade their facilities to the Revised Schedule M standards and the World Health Organisation’s (WHO) Good Manufacturing Practice (GMP) certifications.
J P Nadda, the minister of chemicals and fertilisers, recently laid a statement on the table of the Lok Sabha, said, “Under Revamped PTUAS Scheme, an application window has been opened w.e.f. 11.04.2024 and more than 100 applications have been received. Seven (07) applications have been approved and all the seven (07) approved applicants are MSMEs”.
“The sanction/approval letters have been issued to all approved applicants,” added the statement. He added that the DoP is committed to support MSMEs and aims to give maximum benefits under the RPTUAS sub-scheme.
DoP, in its guidelines issued on March 11, 2024 revamping the sub-scheme, laid out the revised plans envisaging to support 300 units (150 units each in 2024-25 and 2025-26), with a total outlay of Rs. 300 crore, as against the previous plan of supporting 420 new projects with the same financial outlay.
The purpose of the SPI scheme is to make the MSMEs self-reliant and at par with global standards by supporting technological upgradation.
Responding to a specific query by a Member of Parliament, the Ministry also said that a complaint was received against an Assistant Section Officer (ASO) for sending an email to pharma associations using language that is not officially proper. Even though the communication was informal, a show-cause notice was issued to the concerned officer.
“The officer has apologised for the same. Nevertheless, competent authority has rejected the reply and initiated departmental proceedings against the erring officer,” added the Minister in the statement.
The PTUAS was revised and renamed as RPTUAS on March 11, 2024, with a view to increase the uptake and to help the pharmaceutical industry align its production process with best global standards. The Department is implementing the RPTUAS sub scheme as a part of “Strengthening of Pharmaceuticals Industry (SPI)” Scheme.
The objective of the RPTUAS sub-scheme is to facilitate the existing pharma units to upgrade to Revised Schedule M and WHO-GMP standards. The intended beneficiaries would include existing pharmaceutical manufacturing units having turnover of less than Rs. 500 crore over the last three years.
It may be noted that the Centre, at the end of last year, has mandated that the pharma units with above Rs. 250 crore should comply with the Revised Schedule M in six months and those units below Rs. 250 crore should comply in a year’s time.
Various industry associations requested the government to extend the timeline for compliance for the MSMEs for at least three or five years considering the issues the segment is facing at present. Some of the industry representatives also said that the revised PTUAS sub-scheme is also not helping the MSMEs to get their facilities upgraded.
Under the revised incentive structure, the eligible pharma units will get a maximum of Rs. 1 crore. Units with turnover from Rs. 1 crore to Rs. 50 crore will get 20 per cent of investment under eligible activities, units with turnover from Rs. 50 crore to Rs. 250 crore will get 15 per cent of investment under eligible activities, and units with turnover from Rs. 250 crore to less than Rs. 500 crore will get 10 per cent of investment under eligible activities.
The revised Scheme was approved following a comprehensive review by the Scheme Steering Committee in light of the requirements of the revised Schedule-M of the Drugs and Cosmetics Rule, 1945 as issued by the Department of Health & Family Welfare on December 28, 2023. The revised guideline also deletes the penalty clause including requirement of a bank guarantee, which was present in the guidelines previously.
The Department said that through the revision, it has broadened the eligibility criteria, flexible financing options emphasizing subsidies on reimbursement basis over traditional credit-linked approach envisaging widespread adoption of the scheme and comprehensive support for compliance with new standards. It also offers a dynamic incentive structure and integration with state government schemes, enabling units to benefit from additional top-up assistance. The verification mechanism has also been enhanced through the Project Management Agency (PMA).
Earlier, the sub-scheme had its guidelines notified on March 11, 2022, but did not attract many takers owing to various issues in the Scheme.
The revised guideline modifies the objective clause of the sub-scheme to indicate that the scheme will support upgradation of pharma production facilities to enable them to obtain revised Schedule M and WHO-GMP certifications by providing subsidy on reimbursement basis. Earlier, it was interest subvention of capital subsidy on the capital loans availed by the pharma units.
The intended beneficiaries under the revised sub-scheme has been specified as existing pharmaceutical manufacturing units having average turnover less than Rs. 500 crore over the last three years.
While the previous clauses restricted the subsidy on only machinery and electronic management information system required for technological upgradation of the plant are to be considered and only procurement of new machinery will be permitted, the revised guideline does not have any such restrictions.
The Department also deleted the penalty clause under which the loan would have been converted into normal loan if the technological upgradation is not achieved within 18 months of receiving the first disbursement of loan. As per this clause, interest subvention amount credited to the loan account/project account with the relevant lending institution would have been withdrawn along with a penalty decided by the SSC.
PTUAS is a credit linked scheme which provides financial support of up to one crore to a pharma MSME aspiring to upgrade its manufacturing facility as per WHO-GMP standards or Schedule M standards. It is among the three sub-schemes of SPI to strengthen pharma MSMEs in the country. The other two sub-schemes are Assistance to Pharmaceutical Industry for Common Facilities (APICF) in clusters and Pharmaceutical & Medical Devices Promotion and Development Scheme.
