In a bid to boost domestic manufacturing and reduce import dependence, the department of pharmaceuticals late on Tuesday notified two key policies -- Production Linked Incentive (PLI) scheme for promotion of domestic manufacturing of critical Key Starting Materials (KSMs)/ drug intermediates (DIs) and Active Pharmaceutical Ingredients (APIs) and scheme for promotion of bulk drug parks.
According to the notification, the PLI scheme for promotion of domestic manufacturing of critical KSMs/drug intermediates and APIs, the government will provide a financial assistance of Rs 6,940 crore. The base year for the scheme will be financial year 2019-20, the notification said.
"The financial incentives shall be given based on sales made by selected manufacturers for 41 products. These 41 products, which cover all the identified 53 APIs,” the notification added.
The major contours of the scheme are for fermentation based products, incentive for FY 2023-24 to FY 2026-27 would be 20 percent, incentive for 2027-28 would be 15 percent and incentive for 2028-29 would be 5 percent.
For chemical synthesis based products, incentive for FY 2022-23 to FY 2027-28 would be 10 percent. This scheme is applicable only for select greenfield projects and the window for receiving the applications under this scheme shall be open for 120 days.
"The assessment of threshold investment and sales of manufactured products shall be based on details furnished to the departments/ministries/agencies and statutory auditor certificates," the notification added.
The government has also laid out the eligibility criteria, according to which the support under the scheme shall be provided only to manufacturers of critical KSMs/DIs and APIs registered in India. The eligibility shall be subject to threshold investment in select green field projects and shall not affect eligibility under any other scheme and vice-versa, the notification added.
As per the approval and disbursement process, the government said, "Application under the scheme can be made by any manufacturer registered in India and the initial application, complete in all aspects, shall have to be submitted within the application window. The eligible applications will be appraised and considered for selection. Incentive shall be released to selected applicants, meeting the required thresholds and whose disbursement claims are found to be in order."
To monitor the scheme, the government will set up a Project Management Agency (PMA) as the scheme will be implemented through a Nodal Agency. The nodal agency shall act as a PMA and will be responsible for providing secretarial, managerial and implementation support, the government said. "Detailed constitution, functioning and responsibilities of the PMA will be elaborated in the scheme guidelines," the notification said.
For carrying out activities related to the implementation of the scheme, PMA would be responsible for appraisal of applications and verification of eligibility for support under the scheme, examination of claims eligible for disbursement of incentive under the scheme, compilation of data regarding progress and performance of the scheme including, threshold investment and sales of manufactured goods of applicants selected under the scheme.
An Empowered Committee (EC) will consider the applications, as found eligible by the PMA, for approval under the scheme. "The Empowered Committee (EC) will comprise of CEO, NITI Aayog (Chairman), Secretary, Department of Pharmaceuticals, Secretary, Department of Chemicals and Petrochemicals, Secretary, Department for Promotion of Industry & Internal Trade, Secretary, Department of Commerce, Secretary, Ministry of Environment, Forest and Climate Change, Secretary, Department of Health & Family Welfare and experts may be invited as special invitees, as may be felt necessary, from time to time.
The empowered committee will be assisted by a technical committee of experts constituted by department of pharmaceuticals. This empowered committee will consider claims, as examined and recommended by the PMA, for disbursement as per the laid down procedure and guidelines.
"The EC will conduct a periodic review of the projects of the selected applicants with respect to their investments, employment generation and production under the Scheme. EC will also be authorised to carry out any amendments in the Scheme and the guidelines except revising the incentive rates, ceilings or eligible products," the notification said.
Detailed constitution, functioning and responsibilities of the EC will be elaborated in the Scheme guidelines, soon by dept of pharmaceuticals.
Meanwhile, the second scheme notified by the government is scheme for promotion of bulk drug parks. Under this scheme, the financial assistance will be provided for creation of common infrastructure facilities in three bulk drug parks proposed by state governments.
Financial assistance to a selected bulk drug park would be 70 percent of the project cost of common infrastructure facilities. In case of North Eastern states and hilly states (Himachal Pradesh, Uttarakhand, union territory of Jammu and Kashmir and union territory of Ladakh), financial assistance would be 90 percent of the project cost.
Maximum assistance under the scheme for one bulk drug park would be limited to Rs 1,000 crore. The total financial outlay of the scheme is Rs 3,000 crore. The tenure of the Scheme is from FY 2020-2021 to FY 2024-2025. The union cabinet in March had approved both these schemes.
First Published: IST