Govt constantly engaging with industry to support economic revival: FM

Says health care sector, which had to function at its best during peak Covid needs support now to ramp up capacities, bring in better technologies and facilities

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 the webinar organised to make the healthcare sector aware about the government’s loan guarantee scheme.

She added that the health care 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 Rs 50,000 crore to hospitals, clinics, dispensaries, among others, and 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 availed under the scheme is Rs 100 crore per project.

“But to ramp up the capacities in hospitals, and for which we want the banking sector to come and stand by, give them the adequate facility with government standing guarantee,” Sitharaman said.

There is need for ramping up capacities at tier II, tier III towns, municipalities, and rural areas, which may have the capacity in terms of hospitals. But such hospitals may not have the right equipment, and as a result people in that area tend to crowd the hospitals in the metropolitan towns.

So, with the support of Department of Financial Services (DFS), the banks are trying to provide support to all non metropolitan areas, and are making sure 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.

The representatives from the industry made suggestions to the Finance Minister like increasing the guarantee cover from five years to ten years as such investments involve high costs and take time to break-even. Rajiv Nath from the Association of Indian Medical Device Industry (AIMED) sought consistency in import duties on medical devices. He sought 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.