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DoP further revises RPTUAS to attract more pharma units
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Gireesh Babu, New Delhi
September 19 , 2024
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The Department of Pharmaceuticals (DoP) has once again revised the guidelines for the scheme on Strengthening of Pharmaceutical Industry (SPI) to modify the clauses under the sub-scheme Revamped Pharmaceutical Technology Upgradation Assistance Scheme (RPTUAS) with an upward revision of maximum incentive and include the expenditure incurred on product equipment for calculation of the subsidy amount.
The Department notified modifications on September 17, also removing 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.
The latest modification is pursuant to the deliberations held with the industry representatives and after examination of the representations received in this regard, said DoP.
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.
"Pharma units will apply online in the prescribed proforma for shortlisting under the scheme with a gap analysis of the existing manufacturing unit," says the revised guideline, removing the requirement for "detailed gap analysis."
According to the 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.
The SSC will consider the recommendation of the PMC regarding the subsidy amount for each applicant and 50% of the eligible amount (subject to an upper limit of Rs. 1 crore) will be released as 1st installment within 30 days of obtaining requisite documents. The upper limit earlier was Rs. 50 lakhs.
The upper limit for consideration of second and final installment of the subsidy to be released for each applicant within 30 days of obtaining the requisite documents, has also been revised upwards from Rs. 1 crore to Rs. 2 crore, in tandem with the upward revision of the maximum limit.
It may be noted that the Department has revamped the scheme on March 11, 2024 to attract more micro, small and medium enterprises (MSME) in pharma industry, after the initial guidelines issued in on March 11, 2022 and modifying it in July, 2022 and January, 2023.
DoP said that all other provisions as contained in the SPI scheme notified on March 14, 2024, remain unchanged.
The Central government in the recent Parliament Session informed Lok Sabha that the DoP has received over 100 applications for the support under the RPTUAS and approved seven, all from the MSMEs.
The statement was at a time when a section of the industry alleges that the revamped scheme is also not helping the MSMEs to upgrade their facilities to the revised Schedule M standards and the World Health Organisation's (WHO) Good Manufacturing Practice (GMP) certifications.
J P Nadda, the minister of chemicals and fertilisers, recently laid a statement on the table of the Lok Sabha, said, "Under Revamped PTUAS Scheme, an application window has been opened w.e.f. 11.04.2024 and more than 100 applications have been received. Seven (07) applications have been approved and all the seven (07) approved applicants are MSMEs".
"The sanction/ approval letter have been issued to all approved applicants," added the statement. He added that the DoP is committed to support MSMEs and aims to give maximum benefits under the RPTUAS sub-scheme.
DoP, in its guidelines issued on March 11, 2024 revamping the sub-scheme, laid out the revised plans envisaging to support 300 units (150 units each in 2024-25 and 2025-26), with a total outlay of Rs. 300 crore, as against the previous plan of supporting 420 new projects with the same financial outlay.
The purpose of the SPI scheme is to make the MSMEs self-reliant and at par with global standards by supporting technological upgradation.
The objective of the RPTUAS sub-scheme is to facilitate the existing pharma units to upgrade to Revised Schedule M and WHO-GMP standards. The intended beneficiaries would include existing pharmaceutical manufacturing units having turnover of less than Rs. 500 crore over the last three years.
The revised Scheme was approved following a comprehensive review by the Scheme Steering Committee in light of the requirements of the revised Schedule-M of the Drugs and Cosmetics Rule, 1945 as issued by the department of health & family welfare on December 28, 2023. The revised guideline also deletes the penalty clause including requirement of a bank guarantee, which was present in the guidelines previously.
The Department in March, 2024 said that through the revision, it 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.
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