Improvement in health infrastructure will lead to confidence in the revival of the economy – Smt. Nirmala Sitharaman

·         Govt. constantly engaging with healthcare & medical device industry to support economic revival

Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman addressing a webinar on “Building Healthcare Infrastructure for New India” said that overall improvement of health infrastructure will help build confidence of the people in the infrastructure and also help in the revival of the economy.

Mr. Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry representing the Indian Medical Device Industry expressing his happiness said “We are delighted with the Government announcement of a financial scheme to build healthcare infrastructure which is including diagnostic services  & Medical Devices manufacturing, with a 7.95% interest and for 1st time GoI is being the loan guarantor which will definitely help to partly address the 15% Disability Factors that have been making India over 70% imports dependent (last years imports at 45000 Cr Rs).

In a letter addressed to Smt. Nirmala Sitharaman, Mr. Rajiv Nath on behalf of the Indian Medical Device Industry stated that in our sincere quest that the loans do not become NPA’s and projects for Medical Devices to be financially profitable, we request that supporting policy enablers are required, viz:

1- By a Predictable Nominal Tariff Structure matching the mobile phone industry to protect investors.

2- Protecting Consumers by monitoring MRP (Maximum Retail Price) of Importers in Bills of Entry as data to enable Capping of 2 to 4 times over 1st point of sale (when GST is charged 1st time).

3- Give Price preference based on QCI’s Quality Certification in Public Healthcare Procurement as permissible under GFR 153.

4- Seek Customs to enforce restrictions on imports of pre- owned equipment over 3 years and Labeling (MRP, Country of Origin and Manufacturers & Importers name and address)

5- No export restrictions & Phasing out of various Duty exemption notifications on medical Devices as announced by you in this year’s Budget.

6- GST on certain Medical Devices at 18% may be reduced to nominal 12%, we don’t want NIL.

As Government’s commitment to improving the healthcare infrastructure and well-being of the country, the Loan Guarantee Scheme for COVID-19 Affected Sectors called LGSCAS to provide guarantee to Scheduled Commercial Banks for loans given for new projects i.e Greenfield projects and for expansion i.e. Brownfield projects related to healthcare infrastructure were approved by the Union Cabinet on 30th June 2021. Loans under the scheme are made available at a cheaper interest rate of 7.95%.

The Scheme is aimed at upscaling the medical infrastructure in the country specifically targeting underserved areas. It is expected to provide the help the country needs in getting the much-needed healthcare infrastructure and provide employment opportunities after the second wave of Covid-19 pandemic. This is necessary across the country, from metro cities to small towns as well as rural areas. LGSCAS provides a guarantee of 50 percent for brownfield projects and 75 per cent to greenfield projects for loans sanctioned up to Rs.100 crore, set up at urban or rural locations other than 8 Metropolitan Tier 1 cities (Class X cities). For aspirational districts, the guarantee cover for both brownfield expansion and greenfield projects is 75%. The Scheme is applicable to all eligible loans sanctioned up to 31.03.2022, or till an amount of Rs. 50,000 crore is sanctioned, whichever is earlier.

On the efforts to prevent the 3rd wave of COVID-19, Smt. Sitharaman said that all of us have to make an effort on the lines of the motto of this Government said by Hon’ble Prime Minister Shri Narendra Modi –Sabka Saath, Sabka Vikas, Sabka Vishwas and Sabka Prayaas – and only then we can expect to emerge stronger out of this crisis.

The Finance Minister emphasised that the most important support to healthcare infrastructure is to ramp up capacities, technology, better facilities and above all ramp up trained man-power for optimally utilizing the healthcare infrastructure.

“With such team work & enabling policies we can become globally competitive and in 5 years we can increase our exports from 20k Cr₹ to over 50K Cr ₹, increase investment in this sector to over 50K Cr ₹ and stall and reverse our ever increasing import bill which surpassed 45K Cr ₹ last year.” stated Mr. Rajiv Nath.