New Delhi: The Department of Pharmaceuticals (DoP) has revised the guidelines of the production linked incentive (PLI) schemes for promotion of bulk drugs and medical devices, revising the provisions related to Scheduled Commercial Operation Date (SCOD) and invocation of bank guarantee.
The revision is based on a decision taken by the Empowered Committee, which is the competent authority for the PLI schemes, at a meeting on June 9, 2023. The changes brought in are similar for both the PLI scheme for promotion of domestic manufacturing of critical key starting materials (KSMs), drug intermediates (DIs), and active pharmaceutical ingredients (APIs) in the country (PLI BD), and the scheme for promoting domestic manufacturing of medical devices (PLI MD).
With the revision, the competent authority may, for reasons to be recorded in writing, revise the SCOD of projects which are delayed beyond one year from their original SCOD, without cancelling their approval under the scheme. Earlier, the clause was that the bank guarantee will be released upon achievement of commercial production provided the actual date of commercial production is within one year of the original proposed date.
Where a revision in SCOD is granted, if the project is not commissioned by the revised operation date, their bank guarantee will be invoked without a further grace period of one year after the revised SCOD.
The bank guarantee will be released upon achievement of commercial production provided the actual date of commercial production is within one year of the original proposed date or within the revised SCOD.
In case an applicant is selected for multiple eligible products, separate approval letters will be issued for each eligible product and separate bank guarantees shall be submitted by the applicant for each of such eligible products.
The approval letters shall not be construed as a guarantee for disbursement of incentive, and it will be dependent upon verification of eligibility after submission of disbursal claim and other criteria defined in the guidelines.
“If a selected applicant is found to be ineligible at any stage, or if it has not complied with notifications, orders, guidelines etc. of the Scheme, or declines the offer of the approval under the Scheme at any stage, for any reason, the envisaged incentive claim of such selected applicant shall be forfeited and the bank guarantee shall be invoked (if not released as per Clause 12.10), and the offer letter issued shall stand cancelled,” said the revised guidelines.
In such cases, the offer may be extended to the waitlisted applicant for the period remaining, it added.
It may be noted that Dr. Mansukh Mandaviya, Union minister for chemicals & fertilizers and health & family welfare virtually inaugurated 27 greenfield bulk drug park projects and 13 greenfield manufacturing plants for medical devices earlier this month.
The DoP said that the PLI scheme for bulk drugs will lead to reduced import dependence and better supply chain resilience. Investment worth Rs. 3,651 crore has already been grounded, till December 2023, by the scheme participants. The increased investment has led to local capacity creation for critical bulk drugs on which the country was import dependent.
The PLI scheme for promotion of domestic manufacturing of medical devices was launched with a financial outlay of Rs. 3,420 crore for the period 2020-21 to 2027-28. Under the scheme, financial incentive is given to selected companies at the rate of 5% of incremental sales of medical devices manufactured in India and covered under four Target Segments of the scheme, that is cancer care equipment, imaging devices, critical care devices, and body implants.
Total 26 applicants have been approved for 138 products under the scheme. Investments of around Rs. 875 crore have already been grounded towards capacity creation under the scheme, it added.
DoP, guidelines, production linked incentive, PLI schemes, bulk drugs, medical devices, Scheduled Commercial Operation Date, SCOD, bank guarantee, .
The revision is based on a decision taken by the Empowered Committee, which is the competent authority for the PLI schemes, at a meeting on June 9, 2023. The changes brought in are similar for both the PLI scheme for promotion of domestic manufacturing of critical key starting materials (KSMs), drug intermediates (DIs), and active pharmaceutical ingredients (APIs) in the country (PLI BD), and the scheme for promoting domestic manufacturing of medical devices (PLI MD).
With the revision, the competent authority may, for reasons to be recorded in writing, revise the SCOD of projects which are delayed beyond one year from their original SCOD, without cancelling their approval under the scheme. Earlier, the clause was that the bank guarantee will be released upon achievement of commercial production provided the actual date of commercial production is within one year of the original proposed date.
Where a revision in SCOD is granted, if the project is not commissioned by the revised operation date, their bank guarantee will be invoked without a further grace period of one year after the revised SCOD.
The bank guarantee will be released upon achievement of commercial production provided the actual date of commercial production is within one year of the original proposed date or within the revised SCOD.
In case an applicant is selected for multiple eligible products, separate approval letters will be issued for each eligible product and separate bank guarantees shall be submitted by the applicant for each of such eligible products.
The approval letters shall not be construed as a guarantee for disbursement of incentive, and it will be dependent upon verification of eligibility after submission of disbursal claim and other criteria defined in the guidelines.
“If a selected applicant is found to be ineligible at any stage, or if it has not complied with notifications, orders, guidelines etc. of the Scheme, or declines the offer of the approval under the Scheme at any stage, for any reason, the envisaged incentive claim of such selected applicant shall be forfeited and the bank guarantee shall be invoked (if not released as per Clause 12.10), and the offer letter issued shall stand cancelled,” said the revised guidelines.
In such cases, the offer may be extended to the waitlisted applicant for the period remaining, it added.
It may be noted that Dr. Mansukh Mandaviya, Union minister for chemicals & fertilizers and health & family welfare virtually inaugurated 27 greenfield bulk drug park projects and 13 greenfield manufacturing plants for medical devices earlier this month.
The DoP said that the PLI scheme for bulk drugs will lead to reduced import dependence and better supply chain resilience. Investment worth Rs. 3,651 crore has already been grounded, till December 2023, by the scheme participants. The increased investment has led to local capacity creation for critical bulk drugs on which the country was import dependent.
The PLI scheme for promotion of domestic manufacturing of medical devices was launched with a financial outlay of Rs. 3,420 crore for the period 2020-21 to 2027-28. Under the scheme, financial incentive is given to selected companies at the rate of 5% of incremental sales of medical devices manufactured in India and covered under four Target Segments of the scheme, that is cancer care equipment, imaging devices, critical care devices, and body implants.
Total 26 applicants have been approved for 138 products under the scheme. Investments of around Rs. 875 crore have already been grounded towards capacity creation under the scheme, it added.
