The Department of Pharmaceuticals (DoP) will soon appoint a Project Management Agency (PMA) to implement Production Linked Incentive (PLI) scheme for pharmaceuticals. For this purpose, the DoP has invited proposals from public financial institutions for providing the services of PMA.
As per a DoP notice, proposals are solicited from public financial institutions (Government companies only) for providing services of a Project Management Agency for the implementation of Production Linked Incentive scheme for pharmaceuticals.
As per Terms of Reference (ToR), the PMA shall provide implementation support for effective implementation of the PLI Scheme. It shall also be responsible for the development and maintenance of an online portal for receipt of applications. It will prepare operating procedures for processing, scrutiny, appraisal, verification, etc., as per procedure or established practice and getting them approved from DoP.
The PMA shall also process applications against the qualification and evaluation criteria for the purpose of selection of participants. It would receive the application fee or bank guarantee from the participants on behalf of the DoP and deposition of the same to DoP at appropriate time.
The proposals will be evaluated through Quality and Cost Based Selection (QCBS) process which gives weighted scores to both the technical proposal (Quality) as well as the financial proposal (Cost).
The notice further stated that DoP is proposing to introduce a PLI scheme for pharmaceuticals in the month of January, 2021 with the objective of enhancing India’s manufacturing capabilities by boosting investment and production as well as contributing to product diversification of high value goods in the pharmaceutical sector.
One of the further objectives of the scheme is to create global champions from amongst domestic players who have the potential to grow in size and scale using cutting edge technology and thereby penetrate the global value chains. Under the scheme, applicants shall apply in three different categories.
The criteria for categorization shall be on the basis of the Global Manufacturing Revenue (GMR) of Financial Year (FY) 2019-20 in each group, details of which will be issued in the scheme guidelines which are under preparation.
The applications would be received through an online portal. Post the closure of application period, the selection process shall be completed by end of April, 2021. Remaining period of FY 2021-22 will be the gestation period given to the selected participants to set up manufacturing plants, etc. Thereafter, the selected participants shall be given financial incentives based on the incremental sales of pharmaceutical goods covered under the scheme over a period of 6 years. FY 2019-20 is proposed to be the base year for calculation of incremental sales.
PLI scheme which is applicable only for greenfield projects intends to boost domestic manufacturing of identified KSMs, DIs and APIs by attracting large investments in the sector and thereby reducing India’s import dependence in critical APIs. Under the scheme, financial incentives shall be given for six years based on sales made by selected manufacturers for 41 products which cover all the identified 53 APIs. The tenure of the scheme is from FY 2020-21 to FY 2029-30.
The total scheme outlay will be Rs.15,000 crore which will also include the expenditure for hiring the services of the PMA.
The DoP has also recently introduced revised PLI scheme guidelines for promoting domestic manufacturing of KSMs, DIs, APIs and medical devices, removing minimum investment criteria and incorporating export and sale-based production criteria following an appeal by the pharmaceutical industry.
