PLI Scheme For Pharmaceuticals Witnesses Actual Investment Of Rs. 28,328 Crore Till End Of April 2024

New Delhi: The Production Linked Incentive (PLI) Scheme for Pharmaceuticals has reported commissioning of 261 manufacturing locations till the end of April 2024, with an actual investment of around Rs. 28,328 crore made by the industry. The PLI Scheme for bulk drugs has seen commissioning of 30 projects, according to the Department of Pharmaceuticals (DoP).

The PLI Scheme for Pharmaceuticals, launched in the year 2021, has witnessed actual investment going up almost Rs. 9,710 crore from Rs. 18,618.09 crore investments till March, 2023, to Rs. 28,328 crore by the end of April 2024, according to official data.

The Scheme, with a financial outlay Rs. 15,000 crore and the tenure from FY 2020- 2021 to FY 2028-29, is expected to provide for financial incentive to 55 selected applicants including 20 micro, small and medium enterprises (MSMEs) for manufacturing of identified products under three categories for a period of six years.

The Department has received a total of 278 applications in four rounds, out of which 55 has been approved for further assistance. The scheme has resulted in actual production of around Rs. 1,43,553 crore and provided actual employment to 59,768 persons as on April 2024, according to the DoP.

On the other hand, the actual investment under PLI Scheme for Bulk Drugs has gone up around Rs. 1,310 crore from Rs. 2,405.09 crore in March, 2023 to Rs. 3,715 crore as on April, 2024. The actual production through this scheme in the end of April was around Rs. 968 crore, it added.

The actual employment generated through the PLI Scheme for Bulk Drugs till April 2024 was around 2,994, it added. Around 30 projects out of the total number of 48 applications approved till April, has been commissioned. The DoP has received 249 applications for the scheme in four rounds.

The Scheme for Bulk Drugs, launched in the year 2020, is for promotion of domestic manufacturing of critical import dependent bulk drugs – key starting materials (KSMs)/drug intermediates and active pharmaceutical ingredients (APIs) in the country by setting up greenfield plants in four different target segments – target segments 1 and 2 are fermentation based and Target segments 3 and 4 are chemical synthesis based.

The Scheme envisages manufacturing of 41 bulk drugs with a total outlay of Rs. 6,940 crore, during the tenure of the scheme i.e. 2020-21 to 2029-30. The scheme envisages incentive at the rate of 20% for first four years, 15% for fifth year and 5% for sixth year on eligible sales of fermentation based bulk drugs. In respect of chemical synthesis based bulk drugs, incentive is to be given at the rate of 10% for six years on the eligible sales. The government has in the beginning of March, this year, inaugurated 27 Greenfield Bulk Drug Park projects and said that penicillin G, which was not produced in India for 30 years, will be produced in India soon, under the scheme.

The Department, during the time, said that the projects under the scheme are facilitated and supported by the Department of Pharmaceuticals by hand holding and bringing about required regulatory streamlining across the government departments.

According to the Interim Union Budget 2024-25 documents released by the Minister of Finance Nirmala Sitharaman on February 1, 2024, the expenditure on PLI Scheme for Bulk Drugs and domestic manufacturing of medical devices were considerably low during the fiscal year 2023-24, while the expenditure on PLI Scheme on Pharmaceuticals has seen a higher expenditure than the actual allocation.

The expenditure on PLI Scheme for promotion of domestic manufacturing of bulk drugs was Rs. 16.13 crore and the Scheme for Medical Devices was Rs. 48.16 crore, as against BE of Rs. 100 crore each during the fiscal 2023-24. However, the PLI Scheme for Pharmaceuticals reported an expenditure of Rs. 1,632 crore for the fiscal under the Revised Estimates (RE) for 2023-24, as compared to an outlay of Rs. 1,000 crore in the BE.

For the fiscal 2024-25, according to the interim budget, the allocation to PLI Schemes are expected to be around Rs. 2,143 crore out of the total outlay of Rs. 4,089.95 crore for the DoP. The PLI Schemes are expected to see almost 78.6 per cent jump from the Rs. 1,200 crore allocated during the previous fiscal year.

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