GOVT ENGAGING WITH INDUSTRY TO SUPPORT REVIVAL, SAYS FM
TO RAMP UP CAPACITIES IN HOSPITALS, WE WANT THE BANKING SECTOR TO COME AND STAND BY AND GIVE THEM ADEQUATE FACILITIES WITH GOVERNMENT STANDING GUARANTEE”
NIRMALA SITHARAMAN, FINANCE MINISTER
The government is constantly engaging with stakeholders across sectors to ensure economic revival is adequately supported, Finance Minister Nirmala Sitharaman said on Tuesday.
“Revival of the economy, for various other reasons, requires a certain kind of support,” Sitharaman said at a webinar organised to make the healthcare sector aware about the government’s loan guarantee scheme.
She added that the healthcare sector, which had to function at its best during peak Covid times, needs support now to ramp up capacities, bring in better technologies and have better facilities. It also needs trained manpower.
The government is aware that hospitals need additional capacity, better equipment, and it is supporting them through the Loan Guarantee Scheme for Covid-affected Sectors (LGCAS). Under the scheme, banks will provide credit up to ~50,000 crore to hospitals, clinics and dispensaries, among others. The government will give 75 per cent and 50 per cent guarantee on such loans for greenfield and brownfield projects, respectively.
In aspirational districts, guarantee cover for both brownfield and greenfield projects is 75 per cent. Maximum loan that can be availed under the scheme is ~100 crore per project.
“But to ramp up capacities in hospitals, we want the banking sector to come and stand by and give them adequate facilities with government standing guarantee,” Sitharaman said.
There is a need for ramping up capacities at tier II and tier III towns, municipalities, and rural areas, which may have the capacity in terms of hospitals. However, such hospitals may not have the right equipment, and as a result, people in that area tend to crowd hospitals in the metropolitan towns.
So, with the help of the department of financial services (DFS), banks are trying to provide support to all non-metropolitan areas. They are making sure that those places have adequate healthcare facilities to face any potential third wave situation, Sitharaman said. The DFS will monitor the scheme every week to make sure it is implemented on ground at the earliest, she said.
Representatives from the industry also sought certain changes in the loan guarantee scheme. They include increasing the guarantee cover from five years to 10 years as such investments involve high costs and take time to break even. Rajiv Nath from the Association of Indian Medical Device Industry sought consistency in import duties on medical devices. He called for an increase in import duties on medical devices from 0-7.5 per cent to 10-15 per cent to promote domestic manufacturing. To protect consumers, the government can cap the maximum retail price (MRP) over the ex-factory price, and not the price to the distributor, he said.