A background note can be accessed here: Rajya Sabha Q&A: Government Details Measures Taken to Improve Utilisation of Funds Under Pharmaceutical Schemes
The Government's response outlines measures to improve the utilisation of funds across pharmaceutical sector schemes through closer monitoring, revised implementation mechanisms, and administrative oversight. To what extent should fund utilisation be viewed as a proxy for programme success, and what complementary measures are needed to assess whether public spending is delivering the intended health and industrial outcomes?
Fund utilisation is an initial metric, as it signals institutional capacity to implement a scheme. But utilisation alone cannot establish success. Success depends on whether the scheme achieves its intended outcomes and does so at minimal cost to the exchequer.
The government has already mandated an output-outcome framework for every Central Sector and Centrally Sponsored Scheme, along with third-party evaluation for the extension of schemes from one Finance Commission cycle to the next. This suggests the gap may lie in implementation rather than the underlying architecture. At the design stage itself, ministries should be explicit about the market failure being addressed, with quantifiable outputs and outcomes defined upfront and not retrofitted later. Just as utilisation is tracked annually, outcome achievement should be tracked with the same annual discipline.
Scheme evaluation should extend beyond monitoring targets. It should test additionality, domestic value addition, import substitution, export competitiveness, employment, technology spillovers, and whether outcomes are genuinely attributable to the scheme or would have occurred anyway because of broader market trends, while also assessing whether the outputs and outcomes were achieved efficiently. Evaluation should also examine whether intended beneficiaries, including MSMEs, are actually accessing and benefiting from these schemes and whether the benefits are being concentrated among incumbents already capable of large capital outlays.
The response highlights efforts to strengthen monitoring and coordination in implementing pharmaceutical schemes. How can India move beyond improving expenditure tracking towards building stronger institutional capacity for programme execution?
The government's emphasis on expenditure tracking and monitoring through the Treasury Single Account (TSA), the Public Financial Management System (PFMS), and Project Management Agencies (PMAs) is an important step towards strengthening financial accountability. However, effective programme delivery requires moving beyond financial monitoring towards building institutional capacity for implementation. Strong implementation depends on adequate technical and managerial expertise, dedicated programme teams, clearly defined standard operating procedures, and decision-making authority at the implementing level.
Inter-agency coordination matters too. The Bulk Drug Parks Scheme, for instance, needs coordination across the Department of Pharmaceuticals (DoP), state governments, pollution control boards, the Ministry of Environment, Forest and Climate Change (MoEFCC), and utility providers to deliver effluent treatment, power, water, and logistics. A delay by any one agency can hold up commissioning, even when funds are available. This points to coordination, alongside financial discipline, as a determinant of implementation outcomes.
Timely regulatory approvals also remain critical. The government's response to the Rajya Sabha, acknowledging efforts to expedite key approvals, suggests regulatory processes remain a constraint. Going forward, greater emphasis on adherence to stipulated timelines, clearly defined institutional responsibilities, regular inter-agency review mechanisms, and timely resolution of implementation bottlenecks would strengthen programme execution without relying solely on expenditure monitoring as an indicator of progress.
Improving fund utilisation can enhance programme efficiency, but India's pharmaceutical ambitions extend to innovation, manufacturing resilience, and global competitiveness. How should policymakers ensure that better financial management is accompanied by reforms that strengthen the sector's long-term strategic capabilities?
While improved financial monitoring enhances accountability and efficient utilisation of public funds, the long-term competitiveness of India's pharmaceutical sector depends on strengthening innovation, manufacturing resilience, and operational efficiency. India has established itself as a global leader in generic medicines and vaccines and is increasingly shifting towards a value-driven pharmaceutical ecosystem focused on innovation and high-value manufacturing.
First, sustained investment in research and innovation is essential to move beyond generic manufacturing. The Promotion of Research and Innovation in Pharma MedTech (PRIP) Scheme seeks to strengthen the innovation ecosystem by establishing seven Centres of Excellence across the National Institutes of Pharmaceutical Education and Research (NIPERs) and supporting collaborative research between academia, industry, MSMEs, and start-ups. As of November 2025, 111 research projects had been approved, 46 research papers published, and six patents filed, reflecting initial progress in building indigenous research capabilities.
Second, manufacturing resilience should be strengthened by building on the gains of the Production Linked Incentive (PLI) Scheme. Although the scheme has helped avoid imports worth ₹3,591 crore in targeted Active Pharmaceutical Ingredient (API), Key Starting Material (KSM), and Drug Intermediate (DI) segments, dependence on imported APIs remains substantial, indicating the need to expand domestic manufacturing capabilities and diversify supply chains. This suggests that continued investment is required to deepen domestic manufacturing capabilities beyond the currently targeted product lines.
Finally, improving regulatory efficiency, digitalisation, and sustainable manufacturing practices will enhance productivity and global competitiveness. Together, these measures can ensure that public investment translates into a resilient, innovation-driven pharmaceutical sector capable of sustained long-term growth.