NEW DELHI: In a major development for the pharmaceutical industry, the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, has submitted a proposal to the Empowered Group of Secretaries (EGoS) for amending the production linked incentive (PLI) scheme.
The proposed amendment aims to introduce a revised incentive allocation clause, which will ensure sustainable production throughout the scheme’s tenure. According to the sources familiar with the matter, the proposed clause contains several key highlights. Firstly, it mandates that applicants must avail incentives for eligible sales during the 5th and 6th years under the scheme. This provision is designed to encourage long-term viability and stability in production within the scheme.
The revised clause also suggests a maximum annual incentive allocation ceiling. For the first four years, the proposal recommends a maximum allocation ceiling of 20% of the total incentives over the scheme period. However, the overall maximum allocation is capped at 74% of the total incentives. Additionally, an allocation of up to 33% in any one year between FY 2022-23 and FY 2025-26 may be made, subject to the overall cap of 74%.
To provide flexibility to applicants, the proposal grants them the option to forego incentive allocation in any one of the first four years, based on their specific production and investment strategies. This provision allows applicants to align the allocation of incentives according to their individual needs.
Furthermore, the remaining incentive allocation will be made in the last two years of the scheme’s tenure.