Speed Post News Network
New Delhi : The Union Cabinet chaired by Prime Minister Narendra Modi on March 21, 2020, approved the scheme for Promotion of Medical Device Parks for financing Common Infrastructure Facilities at four Medical Device Parks with financial implications of Rs 400 crore and the Production Linked Incentive (PLI) Scheme for promoting domestic manufacturing of medical devices with financial implications of Rs 3,420 crore. The expenditure to be incurred for the above schemes will be for the next five years i.e. from 2020-21 to 2024-25.
Promotion of Medical Device Parks Scheme: Medical Device is a growing sector and its potential for growth is the highest among all sectors in the healthcare market. It is valued at Rs 50,026 crore for 2018-19 and is expected to reach to Rs 86,840 crore by 2021-22. 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 Scheme for Promotion of Medical Device Parks will be implemented by a State Implementing Agency (SIA). The target is to provide financial assistance for Common Infrastructure Facilities for 4 Medical Device parks.
Production Linked Incentive Scheme : The Medical Device sector suffers from 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. There is, thus, a need for a mechanism to compensate for the manufacturing disability.
The Scheme aim to boost domestic manufacturing by attracting large investments in medical device sector. Under the scheme, incentive @ 5% of incremental sales over base year 2019-20 will be provided on the segments of medical devices identified under the scheme, according to a PIB release.