KOCHI: Finance Minister T.M. Thomas Isaac has proposed to set up '250 cr pharmaceuticals manufacturing unit with the finances raised through an innovative Non-Banking Financial Company (NBFC) operating on the principle akin to interest-less Islamic banking. The manufacturing unit will be the under the government owned Kerala State Drugs and Pharmaceuticals Ltd (KSDPL), he said while presenting the first budget of the LDF government on Friday.
The finances for setting up the modern manufacturing unit will be raised through the Cheraman Financial Services (CFS) set up by the state government under interest-less NBFC model few years ago. According to the proposal the share capital of the CFS will be expanded to enable NBFC to undertake the big-ticket investment. The CFS will extend the financial assistance to the manufacturing unit and then it would be leased to the industries department. The company will repay the shareholders of CFS through the profits generated from the manufacturing unit.
According to Isaac the project will be undertaken as an ‘experimental basis’ and if the same proves to be successful it would be extended for setting up several such large scale investment projects. The minister has chosen pharmaceutical sector for the experiment in view of the fact that Kerala is one of the largest markets for modern medicines. According to market estimate the state spends nearly Rs 6,000 cr for pharmaceutical products per year and more than 95 per cent is from other states.
