Central government is going to roll-out an Interest Subsidy Scheme for Small Pharma Companies. Under this scheme, govt. will provide an interest subvention of 6% on loans upto Rs. 8 to 10 crore for a period of 3 years. This interest subsidy is for the loan amount given to various small companies who wishes to upgrade their infrastructure and technology.
Department of Pharmaceuticals (DoP) has proposed this scheme with a budgetary provision of Rs. 144 crore for 2023. The primary objective is to help around 250 pharma Small and Medium Enterprises (SMEs). The main aim is to improve the manufacturing practices and also the quality of the medicines. Also govt. needs to upgrade standards and to promote “Make in India”.
Interest Subsidy Scheme for Small & Medium Pharma Companies
The important features and highlights of this Interest Subsidy Scheme for Small & Medium Pharma Companies are as follows:-
- Central govt. has launched this Interest Subvention Scheme for small and medium scale pharma companies (SMEs).
- Govt. will provide interest subsidy of 6% on loan amount of upto Rs. 8 to 10 crore.
- Only those pharmaceutical companies which posses Good Manufacturing Practices i.e GMP compliant manufacturing facilities both for bulk drugs and formulations are eligible.
- This scheme will ensure that small and medium pharma companies with proven track record will migrate from Schedule M to World Health Organization (WHO) – Good Manufacturing Practices (GMP) norms.
Interest subsidy will also enable them to participate and compete in global markets and earn foreign exchange.
Terms and Conditions – Interest Subsidy Scheme for Small Pharma Companies
All the pharma companies must achieve incremental export revenue in excess of the sanctioned loan amount within 3 years of last draw of loan. If not, then the companies will get penalty and also the loan will get converted to a regular loan by the financial institution. The interest subsidy amount received by the beneficiary companies in their bank account with the sanctioning bank / financial institution will stand withdrawn.
Interest Subvention Scheme Implementation
Public Sector Financial Institution (PSFI) selected through an open competitive bidding will implement this scheme. PSFI will ensure that the beneficiary SME gets WHO-GMP certification within 2 years from date of first disbursement of loan. SMEs can purchase new machinery with this loan amount. As per the proposal, only those machinery and electronic management information systems (MIS) essential to upgrade schedule M plant to WHO-GMP are allowed for procurement.
Govt. will form a steering committee headed by DoP secretary to lay down norms and to ensure effective implementation. This committee will also lay down the norms to impose penalties for erring companies. Govt. has launched 6% Interest Subsidy Scheme for Small Pharma Companies in order to raise the contribution of SMEs in Indian exports and to turn India into a Superpower.
Source / Reference Link: https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/soon-interest-subsidy-on-loans-for-pharmaceutical-infrastructure-technology-upgrades/articleshow/73039178.cms?from=mdr