Express Pharma

The revival of pharma MSMEs


Effective implementation of the recently launched MSME Support and Outreach Programme could prove to be the catalyst for the sector’s progress By Swati Rana

Tthe Modi government recently launched the MSME Support and Outreach Programme to boost the growth of the sector in India. Under the programme, the government has made various announcements and deliverables that focus on access to credit, access to market, hand holding and facilitation support measures etc. for the MSME sector.

Bhavin Mehta
Bhavin Mehta

The 12 point agenda

With the launch of the programme, the government has also announced 12 point agenda for MSMEs. In its announcement, Prime Minister Narendra Modi said, “To resolve the issue of cash cycle in MSMEs, all companies with a turnover more than `500 crores, must now compulsorily be brought on the Trade Receivables e-Discounting System (TReDS). Joining this portal will enable entrepreneurs to access credit from banks, based on their upcoming receivables.”

1) Launch of 59-minute loan portal to enable easy access to credit for MSMEs. In principle approval of loans upto `1 crore through the portal. Portal link through GST portal.

2) Two per cent interest subvention for all GST registered MSMEs, on fresh or incremental loans. Increase in interest rebate from three to five per cent for exporters who receive loans in the pre-shipment and post-shipment period.

3) Companies with turnover more than `500 crores to be compulsorily brought on the Trade Receivables e-Discounting System (TReDS) to enable entrepreneurs to access credit, based on upcoming receivables.

4) Central Public Sector Undertaking (CPSUs) units to make mandatory procurement of 25 per cent instead of 205 from MSMEs.

5) CPSUs to make mandatory procurement of three per cent from women entrepreneurs out of 25 per cent mandatory procurement.

6) CPSUs to compulsorily be part of Public Procurement Portal GeM- Government e-Marketplace. CPSUs to get their vendors registered on GeM portal.

7) 20 hubs and 100 spokes in the form of Toolrooms for Technological Upgradation to be established across the country with a fund allotment of ` 6000 crores.

8) Clusters for pharma MSMEs to be supported with 70 per cent Government of India assistance.

Chandrajit Banerjee
Chandrajit Banerjee

9) Only one annual return to be filed for eight labour laws and 10 Union regulations to simplify government procedures.

10) Computerised random allotment for visits to firms by Inspectors to simplify government procedures.

11) Environment clearance and consent to establish unit to be merged into a single consent. Return to be accepted on the basis of self-certification.

12) Ordinance has been promulgated to enable entrepreneurs to correct the minor violations under the Companies Act through simple procedures rather than to approach Courts.

A welcome move

The industry is very positive about this move and believes that it would be instrumental in reviving the sector’s progress and dealing with its bottlenecks. The industry stakeholders have already begun to take steps to implment this programme effectively.

Eshwara Reddy, DCGI has urged the pharma companies in Aurangabad, Pune and Baddi to share their units details for an intervention by Department of Pharmaceutical. In his letter, he stated, “As you are aware PM has launched a historic MSME support and outreach programme on November 2, 2018 to strengthen the ecosystem for MSMEs by providing easy access to credit marketing and coverage of employees under social security schemes. Three districts namely Aurangabad, Pune in Maharashtra and Baddi in Himachal Pradesh which has concentration of pharma industries have been identified for trageted sectoral interventions by the DoP.”

Dinesh Dua
Dinesh Dua

SR Vaidya, Chairman, MSME Committee, IDMA further informs, “On the basis of the performance in the above mentioned regions, the same will be extended to other districts in the country where there is a pharma nucleus.”

Benefits of MSME support and Outreach programme

Chandrajit Banerjee, Director General, CII says, “The progressive 12-point agenda for MSME announced by Prime Minister addresses the right pain points for the small enterprises sector which provides livelihood to millions of households in the country. The online portal launched for providing credit in less than an hour is a visionary initiative to make funds available to the sector at a time when it is facing a major liquidity crunch. Coupled with increase in interest rate subvention, it will provide much-needed impetus to the sector. The 12 steps would strengthen productivity, improve administrative processes, and infuse technology for the MSMEs. Taken together, the innovative measures will have far-reaching impact on the health of the MSME sector and enable it to emerge as a potent instrument for growth of the overall economy. We compliment Prime Minister on a comprehensive and strategic program to revitalise MSMEs as a dynamic engine of inclusive growth.”

“The Modi government’s announcement to provide loan of Rs 1 crore in an hour to the MSMEs will definitely boost the industry. Lack of adequate funds has always been a bottleneck for this section. Easy access to the loans will help not only in the operations of the sector but also provide capital to its R&D centres, where SMEs can play a strong role. The current government is emphasising in faster introduction of generic drugs into the market which will also benefit the Indian pharmaceutical companies going forward, opined Mehta.”

Dua highlights, “Speedy loan approval & disbursal will help the industry immensely for which the rate of interest needs to be brought down to about five to six p