During these trying times, frontline workers have gone above and beyond their call of duty, trying to help people get out of the predicament that has enveloped the whole world. One of the main roles played in this fight against coronavirus is that the Pharma companies – who have, against all odds, shortage of resources, logistical restrictions – have managed to keep the production of medicines on. The Central government, in an attempt to acknowledge and applaud the efforts of the pharma sector, has launched an interest Subsidy scheme for small Pharma companies.
About the Interest Subsidy to Small Pharma companies
Under the implementation of this scheme, the Central government will provide an interest subvention of 6% on loans of up to ₹8 crore to ₹10 crores for a period of three years. This loan with subsidies is offered to several small companies who wish to upgrade their infrastructure and technology.
The Department of Pharmaceuticals (DoP) has proposed this scheme with a budgetary provision of ₹144 crores for the year 2021. The main objective of the scheme is to help around 250 pharma Small and Medium Enterprises (SMEs). Through the implementation of the scheme, the main aim is to improve the manufacturing practices and to also enhance the quality of the medicines produced. The government needs to essentially upgrade the pharmaceutical standards, especially after having encountered the pandemic.
Interest subsidy scheme for Small and Medium Pharma companies
Salient features of the scheme are provided as follows:
- The central government has launched the Interest Subvention Scheme for small and medium scale pharma companies (SMEs).
- The government will provide a subsidy of 6% on a loan amount of up to ₹8 crores to ₹10 crores.
- Only those pharmaceutical companies which possess Good Manufacturing Practices or GMP compliant manufacturing facilities – both, for bulk drugs and formulations – are considered to be eligible.
- This scheme will essentially ensure that small and medium pharma companies with a proven track record will migrate from Schedule M to World Health Organization (WHO).
Terms and conditions – Interest subsidy Scheme for Small Pharma Companies
All pharma companies interested in availing the benefits of the scheme must achieve incremental export revenue in excess of the sanctioned amount within three years of the last draw of the loan.
If they fail to achieve so, the companies will get a penalty and also the loan will be converted to a regular loan by the financial institution that has sanctioned the loan. The interest subsidy amount received by the beneficiary companies in their bank account with the sanctioning bank/financial institution will stand to be withdrawn.
Summing it up
Pharma companies, in light of recent events, have felt the need to upgrade. Healthcare facilities, in the face of a global crisis, seemed to crumble in no time and the people have had to suffer. With timely intervention, this could have been avoided. It is evident that lessons have been learned and governments all around the world are now directing finances towards essential sectors like healthcare.