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Business News/ Companies / Govt plans subsidy scheme for mid-size drug firms’ upgrade

Govt plans subsidy scheme for mid-size drug firms’ upgrade

Govt plans subsidy scheme for mid-size drug firms’ upgrade


New Delhi: The government is planning a subsidy scheme for medium-sized pharmaceutical companies to help make their facilities compliant with World Health Organization (WHO) manufacturing standards.

Small-scale drug makers are already covered by another scheme under which the department of pharmaceuticals reimburses the interest on loans taken to upgrade technology.

This move is aimed at improving medium-sized drug manufacturers’ infrastructure and help them get WHO’s good manufacturing practices (GMP) compliance certificate, a mandatory benchmark for product quality.

“We are currently in the process of making the proposal. It will provide an interest subsidy to the medium enterprises," said Ashok Kumar, secretary, department of pharmaceuticals, ministry of chemicals and fertilizers. “Once the proposal is final, we will send it to the Planning Commission for clearance."

Kumar said most of India’s medium-scale drug manufacturers are “Schedule M compliant", which means they follow the standards of production prescribed by the country’s Drugs and Cosmetics Act.

“So it will not be very hard to get WHO GMP certification," Kumar added.

The industry has welcomed the proposal.

“It’s a wonderful concept. If this scheme goes through, it is really going to open up a lot of people to go confidently to other regulated markets," said T.S. Jaishankar, chairman of the Confederation of Indian Pharmaceutical Industry, an industry lobby group.

Larger firms in the mid-sized sector, which don’t require the assistance, will also take advantage of the plan. “But on the whole, this scheme will be good for both—the large and small- or medium-scale enterprises," Jaishankar said.

Under another programme for the small-scale sector, known as the Credit Linked Capital Subsidy Scheme, the department of pharmaceuticals and the department of micro, small and medium enterprises are offering a 15% capital subsidy assistance for projects worth up to Rs1 crore.

“We have identified some 10 banks and you have to go through those banks to avail the benefits of the scheme," Jaishankar said. “But invariably, what happens is that the banks ask for collateral and the small sector can’t give that."

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Published: 18 May 2010, 10:44 PM IST
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