Pharmabiz
 

Budget allocation for Department of Pharmaceuticals up by 29% in FY26

Gireesh Babu, New DelhiTuesday, February 4, 2025, 08:00 Hrs  [IST]

The Union Budget 2025-26 proposes to allocate Rs. 5,268.72 crore for the Department of Pharmaceuticals (DoP), around 28.8 per cent higher than the Rs. 4,089.95 crore Budget Estimates (BE) for the fiscal 2024-25. The allocation is almost 55.5 per cent more compared to the Revised Estimates (RE) of Rs. 3,387.96 crore for the fiscal year 2024-25.

According to the Demands for Grants for the Department for the fiscal 2025-26, RE for the current fiscal is almost 17.2 per cent lower compared to the budget allocation in the beginning of the fiscal year, especially owing to the lower allocation for the Central Sector Schemes under the Development of Pharmaceutical Industry schemes.

Interestingly, the increase in proposed allocation for the fiscal year 2025-26 is primarily owing to an increased allocation for the same scheme, at Rs. 1,615 crore compared to Rs. 1,300 crore allocated in the BE of 2024-25.

The allocation for the Scheme was cut down drastically to around 72.3 per cent in RE stage, to Rs. 359 crore for the fiscal year 2024-25. The allocation for the Scheme for Promotion of Bulk Drug Parks, which was at Rs. 1,000 crore in the BE stage for FY25, was reduced to Rs. 300 crore in the RE stage and is now expected to be at Rs, 1,460 crore for FY26.

The proposed allocation for the central sector schemes and projects for FY26 at Rs. 5,224.5 crore is around 58 per cent higher than the Rs. 3,307 crore RE for FY25, and around 29 per cent higher than the BE of Rs. 4,048.5 crore.

The budget allocation for the production linked incentive (PLI) schemes under the DoP is expected to go up 13.7 per cent to Rs. 2,444.93 crore as compared to the RE of Rs. 2,150.50 crore and 14 compared to the BE of Rs. 2,143 crore for the current fiscal year.

The allocation for PLI scheme for bulk drugs has seen a decline to Rs. 22 crore in the RE stage for the current fiscal year, as compared to the BE of Rs. 58 crore. The Department is expected to spend around Rs. 40 crore under this scheme during the new fiscal year.

Revised Estimates for the PLI scheme for domestic manufacturing of medical devices was at Rs. 82 crore, close to the Rs. 85 crore allocated during the beginning of the current fiscal year. The proposed allocation for this scheme during FY26 is Rs. 104.93 crore, a growth of 28 per cent from the RE for FY25.

The PLI scheme for pharmaceuticals is expected to have the major share of the budget allocation for FY26, at Rs. 2,300 crore, around 12.4 per cent higher compared to the Rs. 2,046.5 crore allocation in the RE stage of the current fiscal year. The BE for the current fiscal year was Rs. 2,000 crore, for the scheme.

Proposed allocation for the Promotion of Research and Innovation in Pharma Med-Tech (PRIP) scheme, which is another scheme under the Central Sector Schemes of DoP, is Rs. 245 crore. The Scheme has seen a higher allocation of Rs. 95 crore during the current fiscal year, as compared to the BE of Rs. 75 crore.

The scheme for Strengthening of the Medical Device Industry will see over two-fold increase to Rs. 360 crore from the Rs. 166 crore in the RE stage of FY25.

Allocation for the affordable medicines distribution system of Jan Aushadhi Scheme will be 24.3 per cent higher at Rs. 353.5 crore compared to the RE and BE of Rs. 284.5 crore during FY25.

However, proposed allocation for the National Institutes of Pharmaceutical Education and Research (NIPERs) for FY26 is at Rs. 200.07 crore, a decline of 19 per cent compared to the RE of Rs. 248 crore for FY25.

It may be noted that the Parliamentary Standing Committee on Chemicals and Fertilisers has in its recent report, raised concerns over the consistent decline in fund allocated for various schemes run by Department of Pharmaceuticals (DoP) as against the considerable increase in the Budget Estimates (BE), and the lower utilisation by the Department. It has sought the DoP to analyse the reasons for reduced allocation and utilisation allocated funds in a time bound manner.

It observed that there is a consistent decline in funds allocated for various schemes and programmes run by the Department. For instance, for the promotion of bulk drug parks, the Department sought Rs. 1,350 crore, of which Rs. 1,000 crore has been allocated. For the promotion of medical devices parks, Rs. 156.89 crore was sought, of which Rs. 150 crore has been allocated.

Similarly, for human resource development in medical devices sector (HRD) Rs. 50 crore has been allocated out of Rs. 98 crore sought; for Assistance to Medical Device Cluster for Common Facilities (AMD-CF), Rs. 40 crore out of Rs. 191 crore sought; and for Consumer Awareness Publicity and Price Monitoring Rs. 4 crore out of Rs. 6 crore sought.

The Committee also noted that the BE of the DoP has been increasing from Rs. 470.41 crore in 2021-22 to Rs. 2,244.15 crore in 2022-23, to Rs. 3,160.06 crore in 2023-24, and to Rs. 4,089.95 crore in 2024-25, owing to the consistently enhanced allocation for the PLI schemes and other schemes. It observed that the consistently reducing RE figures apparently reveals gaps in the implementation process.

 
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