9 PM Daily Current Affairs Brief – February 24th, 2023
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GS PAPER - 2
How vikasvaad has lost out to centralisation of government
Contents
Source: The post is based on the article “How vikasvaad has lost out to centralisation of government” published in The Indian Express on 24th February 2023.
Syllabus: GS 2 – Governance
Relevance: issues with bureaucracy and elite institutions
News: India has taken up the G20 presidency and there have been talks about changing India. However, even among G20 nations, the condition of India is dismal.
This article discusses the reasons behind the dismal condition of India and provides an analysis of the vikasvaad of 2015.
Where does India stand amongst the G20 countries?
India’s per capita is lowest within the G20. The life expectancy in India is second lowest. More than 30 percent of jobs in India need just primary education and 70 percent of those in the workforce have no contract.
Hardly 35 percent of male population and 18 percent of the female population attain secondary education. India also has some of the most polluted rivers and cities.
Girls do not go to school in some areas while most cities remain unsafe for working women.
In all these matters, India stands at the bottom amongst the G20 nations and these all have brought into attention the vikasvaad of 2015.
What was Vikasvaad of 2015?
It was aimed to reform of the top bureaucracy of the country and revamp the central scientific agencies. Because, it is the top bureaucracy which determines the quality of people’s lives.
In India, through the IAS, IITs, IIMs and a network of central agencies are available. Power is concentrated in a few hundred top functionaries.
They are responsible for the conduct of most state functions such as managing irrigation systems, making railway engines, running universities or regulating hospitals.
The scientists and professors are responsible for the measurement, analysis and upgradation of most practices like estimating groundwater and tackling pollution.
The elite institutions, through their graduates, create new professionals, companies and agencies that bring modern services to the citizens of this country.
However, these institutions and top functionaries have not performed up to the expectations.
What are the issues with these top institutions and functionaries?
The IITs today are the same as in the 1990s, because they remain disconnected from the states they belong to. Most professors have little understanding of regional problems like floods and droughts, pollution, etc.
The IIT graduate is a global brand with little training or interest in nation-building or the temperament for working on hard scientific problems.
Further, the current IAS officers are incapable of performing well and as per changing demands of society because of their old-fashioned training and work culture.
This has been one of the reasons behind the failure of most of the departments in several states.
This has ultimately led to the coming up of a contractual system for government works. These are mostly taken up by the politicians and big contractors who provide low grade services.
Hence, the aim of the vikasvaad of 2015 was to dismantle this system. That could not be achieved.
Why were the aims of the vikasvaad of 2015 not accomplished?
There were various political reasons such as – a) it would diminish the power of the government by creating a more elite society, b) it would strengthen a diverse civil society, enhance awareness and free thinking on issues of education, health and culture, c) it would further develop the southern states which might affect the supremacy of central government controlling those states from the North.
Justice.gov.in – On Court’s digitisation programmes
Source: This post is based on the article “Justice.gov.in”, published in Times of India on 24th feb. 2023.
Syllabus Topic: GS Paper 2, Functioning of judiciary.
News: Supreme Court recently introduced live transcription of court proceedings on a screen and published the transcripts on its website.
What are the other digital initiatives of judiciary in India?
Other than that Supreme Court is already making use of virtual hearings and e-filing.
Digitisation of the Bombay high court library, with its 1. 25 lakh books and records, which date back to the 1800s. Other HCs have done their bit.
In 2021 Orissa HC started a Record Room Digitisation Centre, the country’s first, and by mid-2022 it had reportedly digitised almost 5. 2 lakh files.
Only last month Delhi HC introduced software for online inspection of digitised judicial files, another first.
And in a different kind of but equally important reform, Kerala HC recently published two judgments in a regional language, Malayalam.
What are the benefits of digitisation of judicial system?
Technology can make courts and records accessible to the general public, students, researchers and archivists.
It reduces their carbon footprint.
What are the challenges of digitisation of judicial system?
Digital system is also vulnerable to breaches. For example, AIIMS ransomware episode. Therefore, before digitisation security infrastructure must be made robust.
On children’s right to protect their genetic information
Source: This post is based on the article “Rights at the centre”, published in The Hindu on 24th feb. 2023.
Syllabus Topic: GS Paper 2, Protection of Vulnerable Sections.
News: Request for DNA test of children violates child fundamental right to privacy.
United Nations General Assembly in 1958,
“Mankind owes to the child the best it can give.”
How Children’s rights have evolved and what are the challenges they are facing now?
United Nation’s Declaration of the Rights of the Child was adopted in 1959. It was aimed at ensuring basic rights to all children below 18 years.
India ratified the Convention in 1992 and over the years several laws have been enacted to protect the rights of children.
The advancements in digital technologies have helped in his objective on many fronts, from registration of births, creating a legal identity to health care.
However, technological development has also led to violation of rights integral to a harmonious upbringing of a child. For example, in many cases request for DNA test of children violates child fundamental right to privacy.
What is the judicial observation in this regard?
In a petition, a man questioned his second child’s paternity. In this case, judiciary held that Genetic information sheds light on a person’s essence. This “intimate, personal information” is part of a child’s fundamental right. So, Children have the right, not to have their legitimacy questioned frivolously before a court of law.
Forensic/DNA testing should only be used as a last resort.
Further, judiciary directed courts to acknowledge that children must not be regarded as material objects.
GS PAPER - 3
Disclosure gains – SEBI’s Proposal on listing
Source: This post is based on the article “Disclosure gains”, published in Business Standard on 24th Feb, 2023.
Syllabus Topic: GS Paper 3, India Economy – Financial Market
News: The Securities and Exchange Board of India (SEBI) has proposed to tweak disclosure norms to improve transparency and streamline processes.
Amendments are connected to various aspects of SEBI Issue of Capital and Disclosure Requirements, or ICDR Regulations 2018.
Aspects included:
- Underwriting public issues,
- The preconditions for announcing a bonus,
- The eligibility of pension funds to participate as anchor investors,
- Providing material documents and contracts for inspection in the case of a public issue.
What are the changes proposed?
Underwriters: First, presently, investors don’t know, if appointment of underwriters is on a “soft” or “hard” basis. Soft basis means underwriter is only handling the technical rejections. Hard basis means underwriter will have to pick up a stake in the company, in case of under-subscription.
A hard commitment means underwriter has a stake and believes that the share price valuations are fair.
Proposed change: Any agreement with the underwriters regarding under-subscription and few related information should be mentioned in Red Herring Prospectus (RHP). It would give investors an idea of the underwriters’ commitment and fair valuation.
Bonus Shares: Bonus issues involve capitalisation of reserves or profits. However, it is seen sometimes that companies have not fulfilled the conditions of issuing bonus shares. For example, the company may have outstanding employee stock options or convertible debentures.
Proposed change: company should be allowed to issue a bonus only if it has received in-principal approval for all prior issues, including employee stock options and convertible debentures/warrants.
Pension funds: pension funds that are associates of the lead manager (LM) or sponsored by an associate of the LM may not participate as anchor investors.
Proposed change: If a pension fund hold a minimum corpus of Rs 25 crore, it should be allowed to participate as anchor investor.
Reports: Presently, material documents and industry reports are available at the issuer’s registered office only for a physical inspection.
Changes proposed: The papers should be available online, at the issuer’s website.
Safe across borders: On Unified Payments Interface-PayNow link
Source: This post is based on the article “Safe across borders”, published in The Hindu on 24th feb. 2023.
Syllabus Topic: GS Paper 3, Money and Banking.
News: Recently, India and Singapore enabled faster transfer of remittances between both countries by enabling integration of Unified Payments Interface(UPI) with Singapore’s PayNow.
The daily transaction limit is set at ₹60,000 or about SGD 1,000.
Significance of Cross-border integration of Payment Interfaces
- It is the beginning of real-time cross-border person-to-person money transfers.
- Singapore is home to a sizeable Indian diaspora as well as tens of thousands of migrant workers employed in Singapore.
- It enables individuals to quickly and safely remit money. It will save them the hassle of running to bank branch or a wire transfer facility’s outlet or costly hawala transactions.
- It will eliminate the use of external settlement currency like US Dollar.
- Singapore has already established payment settlement facility with Thailand in 2021. It is also the member of larger five-member initiative among the central banks of Southeast Asian economies, to connect their domestic digital payment systems. India could become a part of this initiative.
- Besides boost to regional trade and tourism, such a network would help India to further formalise the flow of inbound remittances.
New delivery mechanisms for genetic therapy will do us good
Source– The post is based on the article “New delivery mechanisms for genetic therapy will do us good” published in the mint on 24th February 2023.
Syllabus: GS3- Awareness in the field of biotechnology
Relevance: Regulatory system of drugs in India
News- A biotech company called Aera Therapeutics has unveiled a type of protein nanoparticle that can be used to deliver all sorts of genetic medicines around the body.
What are the challenges associated with present genetic therapies?
The presently available genetic therapy technologies can only fix the genome in reachable parts of the body. Its reach is very limited. The liver, eyes and blood are the main places where cures might be possible.
These technologies largely rely on viral vectors and lipid nanoparticles. But they can only efficiently deliver to certain Zip codes. Lipid nanoparticles’ routes are largely limited to the liver and eyes.
These have other limitations, for example how much cargo they can hold. Some genes for fixing the diseases are too big to fit inside a virus. It can be tough to squeeze the instructions for making Crispr tools into a usable lipid nanoparticle.
What are some facts associated with the new protein nanoparticle unveiled by Aera?
It is capitalizing on a recent discovery about a class of human proteins that are relics of viruses that infected humans ages ago.
One of these proteins assembled into a protein shell of a virus particle that stored the RNA needed for making more copies of itself.
Massachusetts Institute of Technology scientist Feng Zhang saw in the discovery an opportunity to exploit the system to deliver genetic material of his choice.
His lab experimented on the human genome for other proteins that assemble into protective shells and probed whether they were capable of transferring RNA.
In 2021, they showed that one of the proteins, called PEG10 could be repurposed to deliver gene-editing tools. That work became the foundation for Aera.
So far, around 50 of these self-assembling proteins have been found. The protective shells these proteins form come in a range of sizes. It means that some might be better suited for
slipping across the blood-brain barrier.
They are also, in theory, adaptable. Scientists have gotten very good at engineering proteins to do specific jobs. So, it is reasonable to think Aera researchers could engineer the capsids to travel to specific organs or tissues.
Can a centralized regulation help drug quality?
Contents
Source– The post is based on the article “Can a centralised regulation help drug quality?” published in the mint on 24th February 2023.
Syllabus: GS3- Science and Technology
Relevance: Regulatory system of drugs in India
News- The Central government is planning to centralise drug regulation.
What is the current regulatory landscape?
The Central Drugs Standard Control Organization (CDSCO) is the apex regulatory body. It is responsible for approving new drugs, import of drugs and devices, clinical trials and laying down standards for drugs.
Each state has its own regulator as well, which is often conjoined with the food and drug administration in the state. It looks after licensing and auditing manufacturing facilities, and distribution and sale of drugs.
They also grant licence for manufacturing drugs that have been around for 4 years or more.
What is the new proposal?
It is likely a step toward centralization of drug regulation in India. Currently, drugs older than four years can be registered in one state and sold in another.
The health ministry may be planning a single centralized system for the registration of all kinds of drugs, under the CDSCO.
Will it have a bearing on export quality?
It will not have much impact. Drugs sold in the global market are subject to regulations of the buyer country. The US and Europe deploy vast resources to make pharma adhere to their own standards.
Poorer countries such as Gambia often rely on a list of manufacturers and inputs of the World Health Organization (WHO).
A centralized repository can aid in better monitoring.
Will it help improve drug quality?
Even if drug registration is centralized, the regulation for manufacturing will continue to be decentralized.
A plant is jointly inspected by the CDSCO and state regulators at the time of licensing of drugs, but regular auditing is usually done by state regulators.
Lower-level bureaucrats and inspecting officials need capacity- raising and training. India needs greater accountability at the manufacturer level to adhere to norms.
What else can be done to improve standards?
Along with tighter regulation of manufacturing, there is a need for a national policy on recall of drugs. If a drug is found to be substandard in one state and recalled by the regulator there, it is not necessarily recalled in other states.
It should be the job of the national regulator to ensure that a defective batch isn’t sold in other markets.
Last, the track record of prosecuting and penalizing drug manufacturers for violating norms is poor in India. It needs improvement.
A case that scans the working of the anti-defection law
Contents
Source– The post is based on the article “A case that scans the working of the anti-defection law” published in The Hindu on 24th February 2023.
Syllabus: GS3- Parliament
Relevance: Issues related to political defections
News- SC of India is presently hearing a set of cases related to political events in Maharashtra last year, when a breakaway faction of Shiv Sena formed government.
The anti-defection law was introduced into the Constitution via the Tenth Schedule in 1985.
Its purpose was to check increasingly frequent floor crossing; lured by money, ministerial berths, threats.
The Tenth Schedule stipulates that if any legislator voted against the party whip, he or she would be disqualified from the house.
While on the one hand this empowered party leadership against the legislative backbench, and weakened the prospect of intraparty dissent.
How has the 10th schedule worked in recent times?
The working of the Tenth Schedule has been patchy. In the last few years, there have been innumerable instances of mid-term toppling of government after a set of the ruling party or coalition’s own members turn against it.
This is power politics and not the expression of intraparty dissent. It is evident from the well-documented rise of “resort politics”.
Indeed, politicians have adopted various strategies to avoid the provisions of anti-defection law. Recent examples involve mass resignations instead of defections to force a fresh election. There have been partisan actions by State Governors with respect to swearing in ceremonies and the timing of floor tests, and equally partisan actions by Speakers in refusing to decide disqualification petitions.
Why does the role of the Supreme Court become crucial in such cases?
Such cases place the Court in a difficult position.
The court has to adjudicate the actions of a number of constitutional functionaries: Governors, Speakers, legislative party leaders, elected representatives.
But the Court does not have the liberty of presuming dishonesty. It must maintain an institutional arm’s length from the political actors, and adjudicate according to legalities.
Why the role of SC in case of 10th schedule being questioned?
In recent years the Supreme Court has given multiple substantive judgments on anti-defection. But, the toppling of governments remains as frequent as ever.
Politicians find loopholes in Supreme Court judgments and Tenth Schedule. But, Some of these loopholes were easily foreseeable at the time. They were not addressed by the Court.
India’s R&D estimates are an incomplete picture
Contents
Source– The post is based on the article “India’s R&D estimates are an incomplete picture” published in The Hindu on 24th February 2023.
Syllabus: GS3- Science and Technology
Relevance: Issues related to R&D in India
News- India’s research and development expenditure GDP ratio of 0.7% is very low when compared to major economies. It is much below the world average of 1.8%.
What is the reason for low spending on R&D in India?
The main reason is the low investment in R&D by the corporate sector. While the corporate sector accounts for about two thirds of gross domestic expenditure on R&D in leading economies, its share in India is just 37%.
What are issues with GERD statistics in India?
Evidence suggests that India’s GERD data are an underestimate.
A 2022 report of the National Science Foundation of the United States on Foreign R&D by U.S.based MNCs shows a spending of ₹649.7 on R&D in India in 2018.
But the DST has provided an estimate of ₹60.9 billion R&D spending in 2017-18 by foreign MNCs. It is only about 10% of what U.S. firms have reported to have spent in India on R&D.
Why are GERD statistics underestimated in India?
The National Science and Technology Management Information System (NSTMIS) of the
DST is the agency that compiles GERD statistics in India.
It is easier to gather the information on R&D by the government sector, the higher education sector and public sector enterprises.
The challenge lies in collecting data from the private corporate sector. The method used for identification of R&D performing firms does not capture all the R&D performing firms.
The NSTIMS relies on the Department of Scientific and Industrial Research list of recognised R&D units and the database of the CMIE for this purpose.
The DSIR list may not have many of the actual R&D performers for two reasons:
- Firms which consider government incentives as not attractive enough may register themselves with the DSIR.
- It may be difficult for R&D firms in services such as software and R&D services to meet the requirement of having separate infrastructure for R&D to distinguish it from their usual business.
A study at the Institute for Studies in Industrial Development found that only 11% of firms receiving foreign investment for R&D purposes had been registered with DSIR. The CMIE database covers only 3.5% of the currently active registered enterprises in India.
The survey conducted by the NSTMIS is the key source of R&D statistics of India. For those firms which do not respond to the survey, the data is collected from secondary sources such
as annual reports and CMIE. This method will work only if firms disclose their R&D spending.
A review of the documents submitted to the Ministry of Corporate Affairs shows that there are firms which do not report any spending on R&D. But, their declarations suggest that they are engaged in activities of technology development.
What is the way forward to improve GERD statistics?
In the short term, NSTMIS should use the patents granted data, both in India and the U.S. in addition to its current method to identify R&D performing enterprises.
R&D statistics should not be confined to the responses to the surveys. Instead, annual R&D estimates can be prepared from mandatory disclosures by enterprises to MCA.
In order to ensure compliance and proper reporting, technologies can be used like in the case of revamped income tax return forms where various sections are interlinked.
Proper disclosure of information to regulatory agencies, including R&D spending data, should be made an essential component of the environmental, social and governance ranking of enterprises.
Domestic Manufacturing of APIs (Active Pharmaceutical Ingredients): Status, Challenges and Solutions – Explained, pointwise
Contents
- 1 Introduction
- 2 What are the APIs?
- 3 What is the current status of APIs manufacturing in India?
- 4 What are the challenges faced in manufacturing APIs in India?
- 5 Why are the reasons for China’s Competitiveness in Manufacturing of APIs?
- 6 What steps have been taken by Government to promote manufacturing of APIs in India?
- 7 What should be done going ahead?
- 8 Conclusion
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Introduction
Officials from the Union Ministry of Health recently noted that India has started making 29 out of 43 ‘critical’ Active Pharmaceutical Ingredients (APIs) that were imported earlier. This will go a long way in reducing dependence on China. This is the outcome of the Product-Linked Incentive (PLI) scheme for pharmaceutical goods launched by the Department of Pharmaceuticals in 2021. Achieving self-sufficiency in domestic manufacturing of APIs will help India become the global hub of pharmaceutical industry.
What are the APIs?
The Active Pharmaceutical Ingredient (API) is the biologically active component of a drug product (tablet, capsule, cream, or injectable) that produces the intended health effects. An example of an API is the acetaminophen contained in a pain relief tablet. The active ingredient in a biological drug is called a Bulk Process Intermediate (BPI). An example of a BPI is the insulin in medicine to treat diabetes. Combination therapies have more than one active ingredient, each of which may act differently or treat different symptoms. APIs find application in high-quality drugs that are used to treat different diseases.
What is the current status of APIs manufacturing in India?
The global pharmaceutical market is ~ US$ 1.2 trillion with API market of ~US$ 182.2 billion and is estimated to reach US$ 245.2 billion by 2024. The pharmaceutical industry in India is 3rd largest in the world (in terms of volume) and 14th largest in terms of value. The Indian industry has a strong network of 3,000 drug companies and about 10,500 manufacturing units.
The India active pharmaceutical ingredients market is estimated to be valued at US$ 19.9 billion in 2021 and is expected to exhibit a growth rate of 8.3% between 2021-2028. At present, API contributes ~25% to the Indian pharmaceutical market and the rest is contributed by formulations. The API industry in India is highly fragmented with about 1,500 units.
The Indian pharmaceutical industry is having distinct advantage due to the following factors: (a) Low Manpower cost (Even lesser than that of China); (b) Huge domestic market, high economic growth rate, penetration of health insurance schemes; (c) Availability of large pool of skilled manpower including Scientists, Researchers (PhDs), Biotechnologists, Pharmacists (B Pharm, M Pharm), Lab Technicians, Microbiologists etc.; (d) Favorable policy support of 100% FDI under automatic route for Greenfield pharma. 100% FDI is also allowed in Brownfield pharma; wherein 74% is allowed under the automatic route and thereafter through government approval route.
What are the challenges faced in manufacturing APIs in India?
External Dependence: (a) Key Starting Materials (KSMs) are the building blocks for intermediate chemicals and the final synthesis of API. Raw materials for most of the API intermediates are currently not produced in India; (b) Solvents: Most of the API synthesis involves use of solvents. At present, India has huge dependence on China for the solvents. India is importing most common solvents such as methanol, IPA etc. from China; (c) API synthesis requires chemicals other than KSM and solvents. These can be acid, base, reaction promoter, catalyst, surfactant etc. India currently depends on China for these chemicals as well. India lacks domestic capabilities in fermentation processes to manufacture key intermediates/ KSMs for steroidal APls and China dominates; (d) APIs are other components are primarily imported from China, US, Italy among others. The overdependence makes domestic industry vulnerable to disruptions in supply chain and fluctuations in prices. China’s earlier crackdown on polluting industries, primarily pharmaceutical and chemical industries, had led to a sudden hike in the prices of APIs by 25%-30%, thereby reducing margins for Indian drug makers.
Technology Readiness & Associated Issues: Many of the fermentation-based APls have ceased manufacturing in India due to large installed capacities and economy of scale available in China and high domestic infrastructure and utilities cost. Strain improvement and other process improvements are required for manufacturing APls, which have not taken place in India. As each APIs have specific strain and process requirements, readymade technologies are not available in India for many of the APls. However, the technological and scientific base to develop the strains and processes is available in India. In case of chemical APls, technologies are available for some and the rest could be developed in India with some R&D.
High Comparative Cost: (a) Scale of Manufacturing: Indian APIs are on an average 20% more expensive than those manufactured in China. Augmenting production of APls to match the scale generated by Chinese companies is possible, but it would result in increased production cost and thus could hamper the profitability of pharmaceutical exports; (b) Availability and Cost of Land: MSMEs face challenges in terms of affordability and availability of land; (c) High Infrastructure Cost: Average size of a SEZ in China is 10-15 times bigger than in India, with subsidized land, common waste treatment and utilities, reducing the physical infrastructure costs.
Inadequate Financial Support: The cost and availability of finance in India is extremely high. This is compounded by restrictive banking practices, such as insistence on collateral to extent of 100% of the borrowed funds. Government support is not enough. The Government grant of funds is also extremely slow and long, making the project non-viable. Government funding is focused on ‘innovative products and ideas’, whereas much of the API and intermediates business is generic in nature, which is not supported by the government funding schemes. According to a study conducted by the Indian Pharmaceutical Alliance, the cost of finance in China is about 5% – 7% compared to 11% -14% in India.
Low Profit Margins: Profits margins are higher for Finished Formulations (FPPs) compared to APIs. Hence, pharma companies focus more on FPPs.
Why are the reasons for China’s Competitiveness in Manufacturing of APIs?
The relative advantages of Chinese pharmaceutical companies, in comparison to other countries including India are: (a) Economies of scale of manufacturing plants, Lower capex requirements due to large Special Economic Zones (10-15x the size of Indian SEZs); (b) Easier availability and low capital cost; (c) Ease in obtaining regulatory and statutory permissions; (d) Availability of physical infrastructure such as roads, water supply etc.; (e) Availability of land at comparatively economical rate; (f) Fiscal incentives; (g) Government support for manufacturing; (h) Industry-academia collaboration; (i) Overall business environment and speed of execution; (j) Flexible labor policy; (k) Availability of patented process leading to KSM/APIs; (l) Lower logistics costs owing to predictable inland transportation and well-developed transport infrastructure; (m) Robust R&D sector, China is world leader in Chemical R&D.
The imports from China works out to be cheaper and cost effective for the pharmaceutical companies.
Source: PwC. High Dependence can have a cascading impact including drug shortages, increased healthcare burden, shutdown of firms and loss of employment.
What steps have been taken by Government to promote manufacturing of APIs in India?
Draft Pharmaceutical Policy 2017: The Draft Pharmaceutical Policy 2017 prepared by the Department of Pharmaceuticals aims to provide a comprehensive policy to ‘guide and nurture pharmaceutical industry of India to enable it to maintain and enhance its global competitive edge in quality and prices‘. The Policy envisages making essential medicines affordable to common people, making the industry self-reliant by promoting indigenous production of drugs, encourage research and development and ensure quality of medicines which are exported as well as consumed domestically. Strategies for realising these goals consist of a variety of mechanisms such as pricing mechanism, compulsory license and FDI.
Umbrella Scheme – Development of Pharmaceutical Industry: The Department had launched an umbrella scheme namely ‘Scheme for Development of Pharmaceutical Industry’ during 2017-18, with an objective to increase the efficiency and competitiveness of domestic pharmaceutical industry; so as to enable them to play a lead role in the global market and to ensure accessibility, availability and affordability of quality pharmaceuticals for mass consumption.
This scheme is a Central Sector Scheme (CS) with a total financial outlay of INR 480 crore for a 3-year period till 2019-20 and comprises of five sub-schemes namely: (a) Assistance to Bulk Drug Industry for Common Facility Centre; (b) Assistance to Medical Device Industry for Common Facility Centre; (c) Assistance for Cluster Development; (d) Pharmaceutical Promotion and Development Scheme (PPDS): (e) Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS).
Scheme on Promotion of Bulk Drug Parks: The Government, in March 2020, approved a scheme on Promotion of Bulk Drug Parks for financing Common Infrastructure Facilities in 3 mega Bulk Drug Parks, in partnership with States. The scheme has financial implication of INR 3,000 crore for next five years. The Government of India is providing Grants-in-Aid to the States with a maximum limit of INR 1000 crore per bulk drug park. Parks will have common facilities such as solvent recovery plant, distillation plant, power & steam units, common effluent treatment plant etc. The scheme is expected to reduce manufacturing cost of bulk drugs in the country and dependency on other countries for bulk drugs.
Production Linked Incentive (PLI) Scheme: It was approved in March 2020. It aims for promotion of domestic manufacturing of critical KSMs, Drug Intermediates and APls in the country with financial implications of INR 6940 crore for next 8 years. The scheme aims to boost domestic manufacturing of APls by attracting large investments in the sector to ensure their sustainable domestic supply. It will lead to incremental sales to the tune of INR 46,400 crore and also significant additional employment generation over next 8 years.
In 2021, the Department of Pharmaceuticals had launched a product-linked incentive (PLI) scheme for pharmaceutical goods and in-vitro diagnostic medical The financial outlay under this scheme is INR 15,000 crore over a period of 6 years.
Champion Sector: In May 2020, the Government, identified Pharmaceuticals as ‘Champion Sector’ along with leather, gems and jewellery, renewable energy, textiles etc. to provide hand-holding for investors with a focus on improving India’s manufacturing capabilities.
High-Level Committee of Experts: A high-level committee of experts has been formed by the Government in May 2020, to recommend reforms in India’s drug regulatory system so that approval processes can be fast-tracked. The committee would study the current drug regulatory system and submit recommendations for reforms to bring the system in line with global standards and make it more efficient.
What should be done going ahead?
Scale and Process: In order to manufacture economically viable APIs, the engineering and scale aspect of technology development should be focused. Creation of mega drug manufacturing clusters with common infrastructure such as effluent treatment plants, steam boilers, power back-up etc. should be the top priority. Additionally, investment in fermentation sector is needed.
Products: Along with production of various catalysts, solvents, reagents and KSMs, recovery and reuse of solvents is also an important aspect to be looked into specially from downstream processing. India should focus on manufacturing antibiotics, amino acids, vitamins, and sartans.
Coordination and Collaboration: Government should encourage Indian companies working in these segments to collaborate for technology development or quick technology transfer. Option of international collaboration can also be explored. Academia-Industry collaborations for innovation need to be strengthened.
Policy Interventions: (a) Towards API security in the country and ensuring uninterrupted supply, national stockpile needs to be built up for generic medicines of critical illness; (b) A National Authority can be constituted for advanced research in chemical drug development and biotechnology based products; (c) Contract Manufacturing Organizations (CMOs) for APIs can be developed in association with academic labs; (d) Early stage Government R&D support should be provided to academia for pilot development of APls, for establishing viability; (e) Creation of new Centers of Excellence for API development region wise; (f) Drugs manufactured through indigenously produced API and intermediates shall be given preference in Government procurement; (g) Customs duty structure for imported APis should be relooked to facilitate indigenous production; (h) Issues relating to land acquisition, ease of doing business, environmental clearances, taxation, etc need to be smoothened and brought at par with best global practices; (i) Single window clearance system and priority license renewal system should be established for companies manufacturing APIs; (j) Adequate investments to be provisioned for manufacturing next generation APIs; (k) Alternate locations (such as Vietnam, Indonesia, etc.) shall be explored for sourcing KSMs/DIs/APIs till developing indigenous capabilities.
Conclusion
India is already one of the largest manufacturer of pharmaceuticals in the world. However, the sector is vulnerable to external shocks due to high import dependence, especially on China, for APIs. The Government should focus on achieving self-reliance in this strategic sector, just like its focus on semiconductor industry. A focused approach with targeted interventions can enable a quick turnaround as domestic industry already possesses expertise on many aspects. Removing import dependence for APIs is necessary to achieve the vision of Atma Nirbhar Bharat.
Syllabus: GS III, Changes in industrial policy and their effects on industrial growth.
Source: The Times of India, TIFAC, PwC
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