More than two years back, the Department of Pharmaceuticals (DoP) had launched the Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS) for the MSME units in the pharmaceutical sector to upgrade their manufacturing facilities as per WHO-GMP standards or Schedule M standards. The purpose of the scheme was to make the MSMEs self-reliant and at par with global standards by supporting technological upgradation. PTUAS is a credit linked scheme which provides financial support of up to Rs. 1 crore to a pharma MSME aspiring to upgrade its manufacturing facility as per WHO-GMP standards. It was among the three sub-schemes of 'Strengthening Pharmaceuticals Industry' (SPI) to strengthen pharma MSMEs in the country. Initially, the scheme had provisions for a capital subsidy of 10 per cent on loans up to a maximum limit of Rs. 10 crore with a minimum repayment period of three years or interest subvention of up to 5 per cent (6 per cent in case of units owned by SC/ST) on reducing balance basis. Minimum repayment period of the loan sanctioned for availing of the benefit under the scheme is 3 years. But the scheme did not go down well with the MSME units as there were several lacunae in the scheme. Normally any capital subsidy scheme benefit is minimum 20% subsidy, but in the case of PTUAS it was only 10%. Besides, the repayment period is only 3 years. Any capital investment required minimum 7 years repayment. As the scheme did not elicit much response, the DoP revamped the scheme several times during the last more than two years, making it attractive to the MSMEs. After the initial guidelines issued on March 11, 2022, the DoP modified it in July, 2022 and January, 2023. Then on March 11, 2024, the DoP further modified the scheme to make it more attractive to MSMEs in the pharma industry in the country.
As the scheme was still not very attractive, the DoP once again revamped the scheme on September 17, 2024, with an upward revision of maximum incentive and included the expenditure incurred on product equipment for calculation of the subsidy amount. The Department also removed the requirement for a detailed gap analysis for online application for the sub-scheme, replacing it with a normal gap analysis. The maximum limit of incentive under the scheme has been revised from Rs. 1 crore to Rs. 2 crore, while the average turnover criterion stands the same. With the revised guidelines, the expenditure incurred on production equipment will also be considered for calculation of subsidy amount to the pharma units, along with the already existing items including utilities such as HVAC, water and steam, clean room facility, testing lab and stability chamber, effluent treatment or waste management facility, consultation and certification expenses, and any other item with the recommendation of the Technical Committee. According to the new guidelines, the units with an average turnover from Rs. 1 crore to less than Rs. 50 crore can avail incentive of 20 per cent of investment under eligible activities, units with turnover from Rs. 50 crore to less than Rs. 250 crore to get an incentive of 15 per cent of investment under eligible activities, and 10 per cent of investment under eligible activities for units with turnover from Rs. 250 crore to less than Rs. 500 crore. Of course, through the latest revision, the DoP has broadened the eligibility criteria, flexible financing options emphasizing subsidies on reimbursement basis over traditional credit-linked approach envisaging widespread adoption of the scheme and comprehensive support for compliance with new standards. The scheme now looks more attractive and the industry should utilize this opportunity to upgrade their units to the Revised Schedule M standards.
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