New Delhi : A Parliamentary panel which has looked into the budget allocation for the Department of Pharmaceuticals (DoP) and its utilisation has expressed its displeasure on the large under utilisation of allocated funds by the Department, especially the tardy progress in implementation of the three production linked incentive (PLI) schemes of the Department during the year 2022-23. The Committee expressed its desire that henceforth, the Department should be more realistic in projecting its estimates for better utilisation of funds.
The Department Related Standing Committee on Chemicals and Fertilisers, headed by Dr Shashi Tharoor, in its latest report noted that there has been a recurring under-utilization of allocated funds by DoP during the last three years.
During financial years 2020-21, 2021-22 and 2022-23, out of the allocated funds at Revised Estimate (RE) stage of Rs. 470.41 crore, Rs. 823.11 crore and Rs. 2,268.54 crore, respectively, the Department could utilise Rs. 456.16 crore (96.97%), Rs. 774.94 crore (94.14%) and Rs. 843.78 crore (37.19%) (as on 20.02.2023), respectively.
“Obviously, under-utilization of funds in past and especially during the current year 2022-23 where only 37.19 percent of allocated funds have been utilised up to 20.02.2023 would have adversely affected the implementation of the various central sector schemes of the Department which are of paramount importance in the interest of general public and speaks poorly on the functioning of the Department,” observed the Committee in its 42nd report on the Demand for Grants 2023-24 for the Department.
“The Committee are unhappy to note the tardy progress in implementation of three PLI schemes of the Department during 2022- 23 as the Department has been able to utilise Rs. 470.93 crore(28.31%) of the allocation of Rs. 1,663.20 crore (up to February 20, 2023),” it said.
While expressing their concern over the gross under-utilisation of allocated funds during 2022-23 so far for PLI schemes, the Committee exhorted the Department to implement the schemes with all seriousness and take timely corrective measures so as to ensure optimum utilization of the remaining allocated funds by March 31, 2022.
The Committee informed the Department that it would like to be apprised of the overall utilization of funds by the Department during 2022-23 up to March 31, 2023 and in particular in respect of its PLI schemes.
It reiterated that while an amount of Rs. 1,629 crore was allocated for PLI schemes during 2022-23, which was increased to Rs. 1,663.20 crore at RE stage, the actual utilization as on February 20, 2023 was Rs. 470.93 crore only.
“The Committee does appreciate the Department’s view that there is a gestation period for one to two years and then there is a period of production and a period of incentive being released. However, the Committee failed to understand why an allocation of Rs. 1,629.00 crore was made and then enhanced to Rs. 1,663.20 crore at RE, 2022-23 and at the end of the year the maximum amount remained unspent. The Committee considers it to be bad budgeting,” it added.
The Secretary, DoP during evidence also admitted that they had made provisions for incentives to be released in 2022-23 whereas 2022-23 was the year of production and they could have actually made this provision next year.
Commenting on the PLI scheme for Pharmaceuticals, the panel emphasised on the need of developing an effective monitoring mechanism to constantly review the progress of the ongoing projects in the pharmaceutical sector to ensure that there is no let-up in fulfillment of the core objectives of the scheme.
The Committee are of the opinion that in no case the financial constraints under the PLI scheme for pharmaceuticals be allowed to bring down the physical achievements. Hence, funds for this scheme should be adequately enhanced at RE stage.
The DoP projected a budget allocation of Rs. 5,728.57 crore for its various schemes/programmes and other activities during the year 2023-24, but the Ministry of Finance reduced the same and has allocated Rs. 3,160.06 crore only. Similarly, during 2022-23, the proposed allocation of Rs. 10,383.25 crore was reduced to Rs. 2,244.15 crore.
The DoP, however is largely satisfied with an overall increase of 40.84 % in gross budget allocations in 2023-24 as compared to 2022-23 except that in two of its schemes, such as the National Institute of Pharmaceutical Education & Research (NIPER) and the PLI scheme for pharmaceuticals (PLI-pharmaceuticals) in which the proposed allocation has been drastically reduced, observed the Committee.
Under the NIPER scheme, against the projected allocation of Rs. 1,286 crore, Rs. 500 crore and Rs. 50 crore have been sanctioned for NIPERs. Again, in case of PLI-pharmaceuticals scheme, against the proposed budget outlay of Rs. 2,203 crore which was required to provide the incentives to the applicants under the scheme, only Rs. 1,000 crore has been sanctioned.
“Keeping in view an enhanced budgetary allocations during 2023-24, the Committee impress upon the Department to strategically plan, evaluate, monitor and implement its five central sector schemes, namely (a)National Institute of Pharmaceutical Education & Research (NIPER), (b) Production Linked Incentive (PLI) Schemes, (c) Development of Pharmaceutical Industry, an Umbrella Scheme (d) Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) and (e) Consumer Awareness, Publicity and Price Monitoring (CAPPM) thus ensuring optimal utilisation of allocated funds and making sufficient ground for approval of the proposed requirement of funds at RE stage,” added the Committee.