New Delhi [India], Mar 21 : The Union Cabinet has approved a scheme on the promotion of medical device parks for financing common infrastructure facilities and a Production Linked Incentive (PLI) scheme for promoting domestic manufacturing of medical devices.
An official release said that medical device was 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 Rs 86,840 crore by 2021-22. India depends on imports up to an extent of 85 per cent of total domestic demand for 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 release said that medical device sector suffers from a cost of manufacturing disability of around 12 per cent to 15 per cent, vis-a-vis competing economies due to 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 research and skill development.
The release said there is a need for a mechsm to compensate for the manufacturing disability.
Under the scheme, an incentive of five per cent of incremental sales over base year 2019-20 will be provided on the segments of identified medical devices.
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 (PMA) to be nominated by the Department of Pharmaceuticals.
The target is to provide financial assistance for common infrastructure facilities for four medical device parks.
The target for PLI scheme is to provide assistance to about 25-30 manufacturers under various categories of medical devices such as cancer care/radiotherapy medical devices, radiology and imaging medical devices (both ionising and non-ionizing radiation products and nuclear imaging devices.
The release said that 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 release said the schemes will lead to the generation of additional employment of 33,750 jobs over a period of five years and will lead to a substantial reduction in import of target segments of medical devices.
The scheme on Promotion of Medical Device has financial implications of Rs 400 crore and the PLI scheme of Rs 3,420 crore. The expenditure incurred will be for the next five years -- from 2020-21 to 2024-25.
( With inputs from ANI )