By ICN GroupChemical, March 22, 2020
Govt. approves Rs. 3,820 Cr for medical devices
The union cabinet has approved Rs. 3,820 crores for medical devices manufacturing and production linked incentive scheme
The union cabinet has approved Rs. 3,820 crores for medical devices manufacturing and production linked incentive scheme.
The scheme on promotion of medical device parks for financing common infrastructure facilities in four medical device parks with financial implications of Rs. 400 crores and Production Linked Incentive (PLI) Scheme for promoting domestic manufacturing of medical devices with financial implications of Rs. 3,420 crores. The expenditure to be incurred for the above schemes will be for the next five years i.e. from FY2020-21 to FY2024-25.
India depends on imports up to an extent of 85% of total domestic demand of medical devices.The scheme aims to promote medical device parks in the country in partnership with the states. A maximum grant-in-aid of Rs.100 crore per park will be provided to the states.
The medical device sector suffers from a cost of manufacturing disability of around 12% to 15%, vis-a-vis competing economies, among other things, on account of lack of adequate infrastructure, domestic supply chain and logistics, high cost of finance, inadequate availability of quality power, limited design capabilities and low focus on R&D and skill development, etc.
Under the scheme, incentive at the rate5% of incremental sales over base year 2019-20 will be provided on the segments of medical devices identified under the scheme.
The Scheme for Promotion of Medical Device Parks will be implemented by a State Implementing Agency (SIA). The PLI Scheme for promoting domestic manufacturing will be implemented by a Project Management Agency to be nominated by Department of Pharmaceuticals.
The PLI Scheme for promoting domestic manufacturing of medical devices would boost domestic manufacturing and attract large investments in the medical device sector, particularly in the identified target segments. It will lead to expected incremental production of Rs. 68,437 crore over a period of five years. The schemes will lead to generation of additional employment of 33,750 jobs over a period of five years.