Making the production-linked incentive schemes more eye-catching for bulk drugs and medical devices manufacturing, the government is considering removing the minimum investment norms laid down for eligibility for its production-linked incentive (PLI) scheme for drug ingredients and medical device makers after several companies complained they are too restrictive. Issuing detailed guidelines for the schemes, the govt has substituted the criterion of ‘minimum threshold’ investment with ‘committed’ investment by the selected applicant. The change has been made to support the efficient use of productive capital.
Moreover, the amount of investment needed to achieve a particular level of production depends upon the choice of technology and it also differs from product to product. However, the provision for verification of the actual investment made by the selected applicant for the purpose of giving incentives under the scheme continues. The govt also has removed the provision which restricts the sales of entitled products to domestic sales only for the purpose of eligibility of receiving incentives for bulk drugs. This brings the scheme in line with other PLI schemes and encourages market diversification. In case of medical devices, eligibility criteria of minimum sales threshold will be in line with projected demand, technology trends and market development for the purpose of availing incentive.
The tenure of the scheme has been extended by one year keeping in view the capital expenditure expected to be done by the selected applicants in the financial year 2021-22. Accordingly, the sales for the purpose of availing incentives will be accounted for five years starting from FY 2022-23 instead of FY 21-2022.
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