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Parliamentary Panel urges DoP to address issues related to fund utilisation in PLI schemes
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Gireesh Babu, New Delhi
August 25 , 2025
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Expressing concerns over the reduction in budget allocation for the production linked incentive (PLI) schemes in the pharma and medical devices sector, the Parliamentary Panel on Chemicals and Fertilisers has urged the Department of Pharmaceuticals (DoP) to address various issues that impact the implementation of the schemes.
The Parliamentary Standing Committee on Chemicals and Fertilizers, in its 11th report reviewing the action taken by the government on its recommendations on a previous report on ‘Demands for Grants 2024-25’ of the DoP, observed that the reduction in Revised Estimates (RE) compared to the Budget Estimates indicate implementation challenges.
"The Committee urge the Department to address issues such as tendering processes, environmental clearances, and investment criteria compliance in a timely manner to ensure effective fund utilization and achievement of targeted outcomes," said the Panel headed by Member of Parliament Kirti Jha Azad.
The Panel emphasized the necessity for the Department to enhance its implementation strategies to guarantee that the benefits of these schemes reach the intended beneficiaries without delay. This would support the overarching goal of promoting domestic production in the pharmaceuticals and medical device sectors.
The Department, in its action taken report submitted earlier to the Panel, said that many projects under the PLI scheme for promotion of bulk drugs and PLI for domestic manufacturing of medical devices has faced challenges in acquisition of land, obtaining environmental clearance, drug-licensing approvals etc., while for the PLI scheme for pharmaceuticals, during the initial years several selected applicants were unable to achieve their threshold investment criteria under the scheme guidelines, due to which they were found to be ineligible for claim of incentive amount. Implementation has since gathered pace, it added.
The Committee acknowledged the significant increases in the Budget Estimates (BE) for the Department, primarily driven by the introduction of three production linked incentive schemes aimed at bolstering domestic manufacturing.
Budget Estimates (BE) of the Department for 2021-22 stood at Rs. 470.41 crore, which grew in BE 2022-23 to Rs. 2,244.15 crore, in BE 2023-24 to Rs. 3,160.06 crore, and in BE 2024-25 to Rs. 4,089.95 crore. The reason for the enhanced allocation was introduction of PLI schemes in the year 2021-22 for a period of five to six years with a combined outlay of Rs. 25,360 crore, along with some other schemes of development of pharmaceutical and medical device industries.
However, the allocation was reduced drastically in 2023-24 from Rs. 3,160.06 crore to Rs. 2,697.96 crore, observed the Panel.
It also noted that the Department utilized 94.14%, 90.37%, and 90.15% of the allocated funds for the years 2021-22, 2022-23, and 2023-24, respectively, and that as of October 2024, only 33.34% of the allocated funds for 2024-25 have been utilized.
The Department informed that expenditure will increase as PLI beneficiary companies raise claims for incentives and as releases under the pharmaceuticals and medical devices schemes are made based on demand and new proposals.
"The Committee hopes and trusts that the Department will efficiently utilize the allocated funds for 2024-25, ensuring timely and effective expenditure," added the Panel.
As reported earlier, the Panel has observed that there has been a significant reduction in the funds allocated for various schemes and programs run by the Department, including the Promotion of Bulk Drug Parks, Promotion of Medical Devices Parks, Human Resource Development in the Medical Devices Sector, Assistance to Medical Device Clusters for Common Facilities, and Consumer Awareness Publicity and Price Monitoring.
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