Just over 18% of the 301 pharmaceutical units approved for financial assistance under the government’s technology-upgradation scheme had received incentives by March this year, said a recent report presented in Parliament. The slow pace of disbursement comes as drug manufacturers face delays in meeting the “tougher” manufacturing norms prescribed under revised Schedule M.
Under the Revamped Pharmaceutical Technology Upgradation Assistance Scheme (RPTUAS), the government approved incentives worth Rs 300.5 crore for 301 pharmaceutical units. According to the report, claims from 64 units worth Rs 45.8 crore were approved, while 55 units have received incentives so far.
The 55 units received Rs 41.7 crore. Another 237 approved units remained at various stages of implementation: 56 units that reported project completion are yet to submit required certificates, and 152 units are still implementing their projects.
The scheme provides financial assistance to MSME pharma units for upgrading their technology and processes to meet revised Schedule M and WHO-GMP (WHO-Good Manufacturing Practices) requirements. The government assistance is released after the completion of the upgrades and verification by the relevant drug regulatory authorities.
Implementation Bottlenecks
Estimates suggest there are around 10,500 pharmaceutical manufacturing units, with about 8,500 in the MSME category. Sources in leading pharma associations estimate compliance with the revised Schedule M requirements among MSMEs is below 50%.
The norms were first notified in December 2023 mandating drug companies follow stringent requirements covering manufacturing premises, equipment, quality control and production processes.
The government initially gave larger firms (annual turnover above Rs 250 crore) six months to comply. Smaller manufacturers were given one year. Their deadline was subsequently extended to December 2025 subject to specified conditions.
Phased Upgrades
The Department of Pharmaceuticals (DoP) attributes the slow pace of RPTUAS implementation partly to operational difficulties faced by smaller companies. MSMEs are undertaking upgrades in phases to avoid disrupting production while meeting existing demand obligations.
A parliamentary panel has asked the DoP to put in place facilitation and handholding system for the remaining 237 approved units to speed up the upgrades of these units.