Kudos to DoP for bid to streamline PLI Scheme implementation

The Department of Pharmaceuticals (DoP), under the Union Ministry of Chemicals and Fertilisers, recently constituted a high-level panel headed by the Secretary of the Department for selection of applicants and regular monitoring of the Production Linked Incentive (PLI) Scheme for pharmaceuticals. For this purpose, the DoP has issued an amendment to the operational guidelines of the scheme, by adding provisions for the Scheme Selection and Steering Committee (SSSC) to the existing provisions for Empowered Group of Secretaries (EGoS).

As per the original guidelines issued on June 1, 2021, EGoS will monitor the scheme, undertake periodic review of the outgo, ensure uniformity with other PLI schemes and take appropriate action to ensure that the expenditure is within the prescribed outlay. The SSSC will select and regularly monitor the progress of PLI scheme implementation. That the government attaches upmost importance to the committee is clear from the fact none other than the secretary, DoP, has been made the chairman of the committee.

Though the Drugs Controller General of India (DCGI) is not officially a member of the high-level committee, the panel can co-opt DCGI or any other official as special invitees subject to the needs. Other members of the committee include the additional secretary and financial advisor, joint secretary (policy), joint secretary (NIPER), and deputy secretary or director (policy), with DoP. The deputy secretary or director (Scheme), DoP, will be the convenor of the committee.

The panel will review and monitor the implementation of the PLI Scheme for pharmaceuticals at least once in a quarter. The DoP had released the first tranche of incentives under the PLI scheme for pharmaceuticals in February. The financial outlay under this PLI scheme is Rs.15,000 crore over a period of six years. So far, 55 applicants have been selected under the scheme, including 20 MSMEs. The financial year 2022-2023 being the first year of production for the PLI Scheme, DoP has earmarked Rs 690 crore as the budget outlay.

The scheme is also expected to bring in investment of more than Rs. 17,000 crore in the pharmaceutical sector. The support to the pharma industry spans a range of product categories from cell and gene therapy to phyto-pharmaceuticals. The support under PLI schemes is expected to promote the production of high-value products in the country and increase value addition in exports as well as generate an estimated 20,000 direct and 80,000 indirect jobs. Incremental sales of Rs. 2,94,000 crore are estimated from FY 2022-23 to 2027-28.

Of course, the panel has come at the right time and it will go a long way in the proper implementation of PLI scheme. The scheme, whose management agency will be SIDBI, will provide financial incentives on the incremental sales (over Base Year) of pharmaceutical goods and in-vitro diagnostic medical devices to select applicants. The incentives will be paid for a maximum period of six years for each participant depending on the threshold investments and sales criteria to be achieved by the individual. The total quantum of the incentive for the scheme is Rs 15,000 crore.

The scheme covers three different product categories. These products are expected to give impetus to innovation, R&D and widening of product profile of Indian pharmaceutical industry. The DoP has taken a right step as proper implementation of the PLI Scheme is crucial for the country as they will minimise dependence on imports while giving a timely fillip to indigenous manufacturing of pharmaceutical products.

The PLI Scheme will enhance India’s manufacturing capabilities by increasing investment and production in the sector and contributing to product diversification to high value goods. One of the further objectives of the scheme is to create global champions out of India who have the potential to grow in size and scale using cutting edge technology and thereby penetrate the global value chains.