PLI for Pharmaceutical

What is in the News ?

• Department of Pharmaceuticals (DoP) has released the first tranche of incentives under the Product Linked Incentive (PLI) scheme of pharmaceuticals.
• Under the Atmanirbharta initiative of the Government, the Department of Pharmaceuticals launched the PLI scheme for pharmaceuticals in 2021.

PLI for Pharma

• Objective: To enhance India’s manufacturing capabilities and contribute to product diversification towards high-value goods in the pharmaceutical sector.
• Pharma Products Supported Under this Scheme :

1. Category 1: Biopharmaceuticals; Complex generic drugs; Patented drugs or drugs nearing patent expiry; Cell-based or gene therapy drugs; Orphan drugs; Special empty capsules, Complex excipients,
2. Category 2: Bulk drugs
3. Category 3:Drugs not covered under Category 1 and Category 2 such as Repurposed drugs; Autoimmune drugs, anti-cancer drugs, etc.

Production Linked Incentive Scheme

• The PLI scheme was conceived to scale up domestic manufacturing capability, accompanied by higher import substitution and employment generation.
• The government has set aside Rs 1.97 lakh crore under the PLI schemes for various sectors and an additional allocation of Rs 19,500 crore was made towards PLI for solar PV modules in Budget 2022-23.
• Incentives Under this Scheme :
  • The incentives, calculated on the basis of incremental sales, range from as low as 1% for the electronics and technology products to as high as 20% for the manufacturing of critical key starting drugs and certain drug intermediaries.
  • In some sectors such as advanced chemistry cell batteries, textile products and the drone industry, the incentive to be given will be calculated on the basis of sales, performance and local value addition done over the period of five years.
• Objectives :
  • The Government introduced this scheme to reduce India’s dependence on China and other foreign countries.
  • It supports the labour-intensive sectors and aims to increase the employment ratio in India.
  • This scheme works

Practice Questions for Prelims

Consider the following statements about Production Linked Incentives (PLI):
1.  The PLI scheme aims to provide financial incentives to manufacturers who meet specific production targets.
2. The PLI scheme is expected to reduce dependence on imports and promote domestic manufacturing.

Which of the above statements is/are correct?
a)1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2

Ans. c)

Mains Practice Question

What is Production Linked Incentive Scheme and how its application to Pharmaceutical Products would improve the Pharma sector ? (Answer in 150 words)

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