Janaushadhi Kendra retailers urge govt to raise margins, compensate for GST losses

A delegation from the Prime Minister Bhartiya Janaushadhi Kendra (PMBJK) Retailers’ Association on Monday met senior officials from the Department of Pharmaceuticals and the Pharmaceuticals and Medical Devices Bureau of India (PMBI), raising concerns about recent policy changes affecting Janaushadhi Kendra operators across the country.

The meeting was attended by Amit Agarwal, secretary, Department of Pharmaceuticals; TL Satyaprakash, additional secretary, and Suvasis Das, CEO, PMBI. Representatives from ten states took part in the discussions on operational and financial challenges faced by retailers under the Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP).

The association highlighted three key issues: the recently implemented “Zero Distance Policy”, financial losses due to the reduction in GST rates and the demand for higher sales margins to make operations viable.

According to Vishnu Gupta, national president of Janaushadhi Kendra Owner’s Welfare Society (JKOWS), the shift from the earlier one-km distance rule between two kendras to a zero-distance policy has created uncertainty among existing operators. The delegation said the move could lead to overlapping outlets in close proximity, causing financial losses, affecting employment.

In a memorandum submitted to the Department, the Association stated that over 6,000 kendras and their employees could be impacted by the change. They requested the restoration of the one-kilometre distance policy to protect existing centres.

Retailers also raised the issue of losses caused by the recent reduction in Goods and Services Tax (GST) rates on certain medicines.

Ayon Bhattacharya, national secretary of JKOWS, said, “Kendras registered under the composition scheme had purchased stocks at higher tax rates but were now required to sell them at revised, lower maximum retail prices through the Point-of-Sale (POS) system, resulting in a direct loss of around 7%.” This, he said, had created working capital constraints for many operators.

The delegation further sought an increase in trade margins, stating that other generic drug companies offered margins of 35-40%, while PMBJK operators received lower margins. They argued that improving margins would help make Janaushadhi Kendras more competitive and encourage participation from small entrepreneurs.

“During the meeting, the officials from the Department of Pharmaceuticals and PMBI assured us that the issues raised would be examined and that appropriate action would be considered,” said Suresh Mittal, General Secretary off PMBJK.