The government issued operational guidelines for the Production-Linked Incentive (PLI) scheme for the pharmaceutical sector on Tuesday.

The approved outlay of the scheme is ₹15,000 crore and it is open to applications from the industry starting from June 1 till July 31. The applications are invited in three groups based on the Global Manufacturing Revenue of FY 2019-20 of the applicants, it said in a press release.

“A special carve out for MSMEs has been kept under the scheme. All the applications will be submitted through an online portal maintained by SIDBI, the Project Management Agency for the scheme. Application can be made on the online portal, URL of which is https://pli-pharma.udyamimitra.in.,” said the government statement.

Three categories

As per the government statement, the products covered under the scheme are formulations, biopharmaceuticals, active pharmaceutical ingredients, key starting material, drug intermediates, in-vitro diagnostic medical devices, etc. The eligible products have been categorised into three categories. The category-1 and category-2 products attract 10 per cent incentive and category-3 products attract 5 per cent incentive on the incremental sales. Incremental sales of a product mean sales of that product in a year over and above the sales of that product in FY 2019-2020.

The government will select a maximum of 55 applicants under the scheme and each applicant, through a single application, can apply for more than one product and the products applied by an applicant can be in any of the three categories.

“The applicants will be required to achieve minimum cumulative investment per year over a period of 5 years as prescribed under the scheme. The investment could be under new plant and machinery, equipment and associated utilities, research and development, transfer of technology, product registration and expenditure incurred on building where plant and machinery are installed. Investment made on or after April 1, 2020 will be considered as eligible investment under the scheme,” it further stated.

The shortlisted manufacturers will receive PLIs based on incremental sales of pharmaceutical products for 6 years. A selected participant will get a maximum incentive of ₹1,000 crore, ₹250 crore and ₹50 crore, respectively, depending upon its group over the period of the scheme.

“Additional incentive will be available based on performance but subject to certain conditions. In no case, the total incentive including additional inventive, would be more than ₹1,200 crore, ₹300 crore and ₹60 crore per selected participant respectively for the three groups over the period of the scheme,” the statement further said.