Parliamentary panel asks DoP to address grassroot challenges faced by medical devices industry

New Delhi, April 11, 2022:

The Department Related Parliamentary Standing Committee on Chemicals and Fertilisers has asked the Department of Pharmaceuticals (DoP) to ponder over the ways and means to address the grassroot challenges faced by the medical devices industry and initiate appropriate steps to overcome them.

The Committee noted that the incentives provided under the production linked incentive (PLI) scheme for promoting domestic manufacturing of medical devices are for incremental sales only and in no way address the major challenges faced by Greenfield projects, that is the poor infrastructure, weak domestic supply chain and logistics, high cost of project finance, inadequate power backup, limited design capabilities, low investment in R&D and skill development, etc.

“Unless these challenges are overcome it is difficult to visualize that the domestic medical device industry can reap the real benefits out of the PLI scheme. Hence, the Committee recommends that the Department may ponder over the ways and means to address these grass root challenges faced by the medical device industry and initiate appropriate steps thereon,” said the 34th report of the Standing Committee on the Demands for Grants of DoP for the year 2022-23.

The production linked incentive scheme for promoting domestic manufacturing of medical devices was approved by the Government of India on March 20, 2020 to address the challenges in manufacturing of medical devices in India vis-à-vis other major manufacturing economies. The guidelines for implementation of the scheme were issued on 29.10.2020.

The Scheme is applicable only to the Greenfield projects and intends to boost domestic manufacturing and attract large investments in the medical devices sector. The tenure of the scheme is from FY 2020-21 to FY 2027-28 with total financial outlay of Rs. 3,420 crore. Under this Scheme, financial incentive will be given to selected companies at the rate of 5% of incremental sales of medical devices manufactured in India and covered under the target segments of the scheme, for a period of five years.

The Committee noted that for the year 2022-23, the Department has been allocated Rs. 216 crore at Budget Estimate stage which is a marked enhancement in comparison to Rs. 3.31 crore allocated at revised estimate stage during 2021-22.

Further, the Department has approved 21 applicants under the scheme. Since it is very much important that all the 21 applicants commission their plants in a time bound manner and start production and sale of medical devices so that they become eligible to get incentive under the Scheme, the Committee recommended that concrete steps should be taken by the Department for timely commissioning of plants by these applicants and ensure full utilization of budgetary allocation of Rs. 216 crore for the disbursal of incentives to them based on their production and sale of medical devices.

“A definite responsibility may be fixed on Project Management Agency in this regard. The details of progress made in implementation of the Scheme during 2022-23 should be intimated to the Committee,” added the report by the Committee headed by Kanimozhi Karunanidhi.

It has also recommended the DoP to take necessary steps for the early release of budgetary funds to four medical devices parks being set up in Himachal Pradesh, Madhya Pradesh, Tamil Nadu and Uttar Pradesh and examine the necessity of setting up of more medical devices parks in the country. Pharmabiz