Cabinet secy-led panel to take call on more allocation to PLI pharma

The department has urged the top government panel to provide additional funds of around Rs 3,000 crore under the scheme for pharmaceutical medicines

A panel headed by Cabinet Secretary Rajiv Gauba will examine allocating more funds towards vaccine production to boost manufacturing production-linked incentive (PLI) scheme.

The department of pharmaceuticals has urged the top government panel to provide additional funds of around Rs 3,000 crore under the scheme for pharmaceutical drugs. The scheme is aimed at further boosting domestic manufacturing of medicines, in-vitro diagnostics (IVD), and their raw materials in India.

The additional amount is being asked to support the domestic production of raw materials required for vaccine production, people aware of the matter told Business Standard. The financial outlay for the scheme is currently Rs 15,000 crore.

“The department of pharmaceuticals will soon send a proposal to an empowered group of secretaries (headed by Gauba) for redistribution of around Rs 3,000 crore from PLI savings from other sectors,” one of the people cited above said. As of now, total savings for the government under the PLI scheme has been Rs 30,984 crore. The savings or any unutilised amount can be reallocated to any other department in need of funds. This provision was made while designing the PLI scheme. Savings of Rs 30,984 crore is a result of sharply cut outlay for automobile, auto components, and mobile manufacturing.

The financial outlay for automobile and auto components has been slashed by 54 per cent to Rs 25,938 crore, while that of the mobile manufacturing scheme has been reduced by 6 per cent to Rs 38,601 crore. The Cabinet had in February approved the scheme that aims to give production-linked incentives for six years, starting FY23. The incentives will be given to drug ma­kers as a proportion of incremental sales, over and abo­ve the revenue generated by the products concerned in FY20.

The department for pharmaceuticals has divided the products into three categories — pharmaceutical formulations, bulk drugs and IVD medical devices. As much as Rs 11,000 crore has been allocated for complex generic drugs, patented drugs, biopharmaceuticals, among others, while Rs 2,250 crore for bulk drugs that are not part of another PLI scheme that was announced by the government last year for bulk drugs.

The remaining amount of Rs 1,750 crore has been allocated for medicines not made in India, IVD medical devices, anti -cancer drugs among others.

The government has received as many as 278 applications, with an expected investment of Rs 15,000 crore for PLI pharma.